The first quarter of 2025 certainly kept investors on their toes. Headlines swirling with trade tensions, tariffs, trade war, inflation worries, and potential budget cuts fueled noticeable swings in the markets. We saw volatility spike, and the S&P 500 has spent the past month 10% or more off of its high water mark.
Curio Wealth Quarterly Market Review for Q1 2025
When the numbers fluctuate like this, especially when it concerns our financial well-being, it’s natural to feel a sense of unease. It is important to acknowledge and understand that, to sit with those feelings and separate what can be controlled and what cannot. We believe that perspective, preparation, and planning are key to navigating these times.
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
— Benjamin Graham
It’s easy to associate market volatility purely with red ink, but that’s only half the story. Volatility simply measures how much prices move – both up and down – relative to their average. The hidden challenge of volatility is acknowledging that it’s actually a sign that markets are working as intended, constantly processing new information and adjusting values. During periods of high uncertainty, like we’ve seen, this process naturally becomes more pronounced.
Think back to March 2020. Market volatility hit an all-time high amid the pandemic’s onset. Yet, just days later, the S&P 500 began a recovery that led to significant gains over the following years. While past performance never guarantees future results, it highlights that volatility isn’t solely negative; it creates opportunities for disciplined, long-term investors.
Similarly, market downturns, while uncomfortable, are a normal part of the economic cycle. The S&P 500’s 4.6% loss in Q1 and its correction are events we’ve seen before – despite the fact that the headlines are new. Since 1974, there have been 27 corrections in the S&P 500, but only six evolved into longer-term bear markets (declines of 20% or more). History also shows that market upswings (bull markets) tend to last significantly longer than downturns (bear markets). Even in years with significant intra-year drops, markets often finish in positive territory.
“You gain strength, courage, and confidence by every experience
in which you really stop to look fear in the face.”
— Eleanor Roosevelt
We all have times in our lives when we feel stress from things we can’t control, especially when there is uncertainty. It can be particularly worrisome when our financial security feels affected. In moments like these, taking time for reflection can be grounding. We encourage you to think about these questions:
- How do you typically stay calm when things feel stressful?
- When there have been unpredictable times in your life before, what strategies helped you get through them?
- What actions or thoughts help you cope best during hard times?
- What kind of support do you find most helpful from others when you’re facing challenges?
- Specifically, how can Curio help make this potentially stressful time easier for you?
Your answers can provide valuable insight into your own resilience and needs.
“A wave of new scientific discoveries reveals that learning to lean into uncertainty in times of rapid change is a promising antidote to mental distress.”
–Maggie Jackson, New York Times
It might sound counterintuitive, but uncertainty is fundamental to investing. Fortunately (or unfortunately depending on your perspective) if returns were predictable, there would be no potential reward for taking on market risk. The potential for downturns makes the potential for long-term growth possible. Life itself involves constantly managing risk and uncertainty – from daily choices to major life decisions. You’ve been navigating risk and reward your entire life.
The key isn’t trying to predict the unpredictable – timing the market or chasing specific stocks. Instead, successful investing often comes down to managing the risk you take through thoughtful planning. This involves:
- Having a Plan: Knowing your goals and having an investment strategy designed to reach them before volatility hits.
- Diversification: Spreading investments across different assets to avoid over-reliance on any single area – acknowledging we don’t know exactly what will happen next.
- Automation: Setting up regular contributions or rebalancing can help maintain discipline.
- Perspective: Focusing on your long-term goals rather than short-term market noise.
- Sticking to It: Following your investment plan even when emotions tempt you to react impulsively.
Every investor needs their own plan, tailored to their circumstances and risk tolerance. The most important step is having one in the first place.
“Knowledge isn’t power until it is applied.”
– Dale Carnegie
Market commentary often focuses heavily on data and predictions. While information is important, our perspectives on markets go beyond sharing facts and figures. The goal is to bring together evidence and insight within the context of where you are. Your financial plan is designed for the long term, built to weather different market conditions through diversification and strategic adjustments when your life circumstances or goals change – not necessarily when headlines get noisy.
As we move into the rest of the year, the market landscape may continue to present challenges. Please know we are here to listen and ensure your financial strategy remains aligned with your unique path.
