Markets opened the year mixed.
U.S. stocks declined in the first quarter, while international stocks posted unexpectedly strong results — outperforming U.S. markets by 10.9%. That’s the widest margin in more than 35 years! European markets, in particular, responded favorably as the EU began reconsidering limits on debt spending for defense. It’s a reminder of how quickly sentiment can shift in the markets.
Much has changed in the two weeks since the quarter ended.
Trade uncertainty escalated with the April 2 “Liberation Day” tariff announcement, followed by a general postponement on April 9. These headlines are loud, but they’re just one part of a much more complex policy environment. While tariffs have drawn much of the attention — and concern — they represent only one component of the administration’s broader economic strategy.
It’s helpful, though not always easy, to step back and consider the full picture. The current approach includes disruptive tools like tariffs, but also proposals around tax reform and deregulation that could prove more supportive to long-term growth. That doesn’t excuse the costs of flawed or seemingly short-sighted policies, but it does remind us that economic policy rarely moves in a straight line. The walk-back on tariffs, although potentially damaging to our reputation, also reminds us that economic and market consequences aren't being completely ignored.
While the effects of these policy shifts are still unfolding, we have been through painful disruptions before: the collapse of many dot-com companies in the early 2000s, the near failure of our banking system in 2008, and a global pandemic in 2020. History reminds us, that through it all, people and companies find ways to adapt, innovate, and move forward.
Your plan reflects that same mindset.
The market feels fragile right now. That’s why we plan ahead — not in reaction. Just a few months ago, we celebrated an exceptional two-year run in U.S. stocks. And even when sentiment toward international companies was more negative, we stayed disciplined. You were likely invested in international markets at the start of the year, and your portfolio benefited from that diversification. Your plan also likely includes stabilizers like bonds and reserves to meet potential cash needs — both the expected and unexpected. These are the kinds of thoughtful decisions that help us navigate uncertainty together.
As always, we’re here and ready to answer any questions you may have regarding how these market changes may have impacted your financial plan.
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U.S. Stock performance as measured by the Russell 3000 index and international stocks as measured by the MSCI World ex USA Index (net dividends). In the 4th quarter 1988, International Stocks outperformed U.S. stocks by 13%.
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