Dear Clients and Friends, 

​Welcome to our first full newsletter of 2025!
 
I would like to begin with what is, and will likely remain, the understatement of the year: There’s a lot going on.
 
Every day seems to bring a flurry of activity from our new Administration that challenges the status quo.  You may hate what’s happening, you may love it, or you may be somewhere in between – which despite what you hear, is an option!  As you have read in this space before, and have heard from us for many years, we are not in the business of making political statements or taking political stances.  Our job – to the best of our ability – is to make decisions based on what we believe is most likely to happen.  It is impossible to know precisely what the impact will be of these interconnected issues, what actions will be implemented, how courts will respond, how officials will respond to courts, and what the economic impacts will be.
 
There seems to be an increasing chorus of talking heads and media (social or otherwise), talking about how terrible the economy is and how poorly the market is doing.  Obviously, there are economic challenges, and many people are feeling the pinch, but from an overall perspective, we believe there is a disconnect between this sentiment and what is actually happening, at least so far.
 
It is difficult to write about market performance in times of volatility – words can become dated very quickly.  Market volatility has increased, in our opinion, largely due to the economic questions surrounding the proposed/implemented tariffs.  However, as of this writing in mid-March, the S&P 500, NASDAQ, and the Dow are still within a few percentage points of their all-time highs.  Market and account performance over the last few months cannot be ignored, even as the threat of these actions from Washington has been looming.  We believe there are several main reasons for this: 1) Market players are likely expecting that at least some of what is being signaled in Washington is unlikely to happen in the ways currently described – and some policies could ultimately be reversed.  2) Markets are likely a little overwhelmed and many of its players could be waiting to make changes until they have more information.  3) Many areas, especially outside of large, US-based companies, have been holding steady, or actually doing quite well year-to-date – meaning that diversification has been helping performance in many cases.  4) We cannot discount the possibility that even if some emerging policies are unpopular in other ways, from an economic standpoint, at least some of them are currently being viewed more positively than negatively. 
 
This recent volatility is certainly concerning, but we have seen plenty of instances recently that prove that policies – and sentiment – can reverse quickly.  Remember however, volatility – and even pullbacks – are a normal part of markets, and we must resist the temptation to overreact to short-term movements.
 
StraightLine is watching events closely and collaborating with our research partners to chart a course that we believe will navigate the times in the most effective way.  While we have made some adjustments in certain portfolios, we have not yet felt that any major account realignments have been warranted.
 
We encourage you, especially in times of volatility, to focus on the fundamentals.  Those fundamentals in this case being the details relevant to you – your situation, your cashflow needs, and your distribution timeframe.  If your circumstances have changed, then it may be time to speak with us about adjusting your accounts.  If not, sometimes the best, and most difficult thing to do, is nothing.
 
StraightLine knows this can be a stressful time, one that challenges established strategies.  Perhaps the best advice we can give right now is to be cautious about the information you are consuming.  There is an enormous volume of “media” out there doing what they do best: selling fear and outrage.  Rumors and conjecture are flying at light speed – and don’t think for one second that some of them aren’t designed to get you to believe the preferred truth of the author – or to perhaps buy something that the author is pushing.  I have said before that too much media is bad for your wealth – and we have seen instances lately where it is affecting people in other ways.  For some, it is actually affecting their health.  Sometimes a little disconnection is the best medicine – for multiple ailments.
 
On a separate note, we at StraightLine are excited to announce that we have added a new team member – we are pleased to welcome Zach Rivard!  As you will see below, Zach has worked in several areas within financial services since 2013 and has been a licensed advisor for more than 5 years.  He also earned the CERTIFIED FINANCIAL PLANNER™ designation in December, 2021.  We are thrilled to have him on board!
 
If you have questions, or if you’re just having a feeling that you need to speak with someone about all these issues, please know that we are available.  Thank you for taking the time to read this note and newsletter.  And as always, thank you for your continued trust in StraightLine.
​

​Friday’s rally did not do enough to keep markets from continuing their downtrend last week, with none of the major indices we track spared. It will be interesting to see if markets can show some signs of life and carry some momentum in the coming days and weeks. We continue to expect a choppy environment in the short-term, as investors grapple with elevated levels of uncertainty. However, with the S&P 500 officially in correction territory (down 10% from the recent highs) we are hopeful that most of the losses are behind us.

Last year was another good one for markets, with the biggest names in the S&P 500 once again leading the way higher. The AI story has been a driving force behind much of the market’s return in the last two years, and there is little reason to believe that things will change in 2025. Elsewhere, investors will be watching to see how the Trump administration will look to implement various campaign promises. Things are evolving quickly, and the scale may end up being the focus of 2025. The scale of change in the political landscape, trying to find the appropriate level of budget cuts to scale down government debt, and the scaling up of AI, are all things we will be watching.

Markets have pulled back to start the new year. Numerous factors have likely led to the uninspiring start, though it does little to change our longer-term outlook. Investors have had to trade around three consecutive shortened weeks, and there seems to be a lack of continuity across markets. Additionally, the usual quarterly and annual rebalancing around the new year is likely leading investors to sell some winners and move into other parts of the market.

Stock markets have been celebrating the fact that we made it past the election and earnings season without any major disruptions. The new administration is expected to pursue policies to reduce government spending, reduce regulations, maintain/lower taxes, and broaden protectionist trade policies.