Last month I cited low consumer sentiment readings and their (historically speaking) indication of future positive returns. As of Tuesday (May 6, 2025), the S&P 500 was on its longest win streak since 2004.
Why am I sharing this? To communicate a small, but very recent, example of the payoff for exercising patience and long-term orientation during times of economic uncertainty. It truly is a pleasure to work with this group of clients.
MARKET UPDATE
Though the market has rebounded from its intraday trough of 4,835 on April 7th, there is still much uncertainty amid tariffs. The Fed has decided to hold interest rates steady while they wait to see how policy unfolds. One thing seems obvious – an increase in tariffs will most likely not fare well for the economy.
That said, we are long-term investors. I’d be remiss not to share from two individuals much more adept at explaining this situation.
This first quote is from Jeremy Siegel’s (Senior Economist to WisdomTree and Emeritus Professor of Finance at The Wharton School of the University of Pennsylvania) weekly commentary from 04/15/2025:
“A reminder for the long-term orientation. Even if tariffs stay on for three more years, their net present impact on long-term earnings is relatively small. A 20x PE implies that only 10% of a stock’s value comes from earnings over the next two years. Short-term damage—even significant—does not erase long-run returns.”
Next, as those of you who read our newsletter know, we send out a monthly piece written by one of our favorite authors, Nick Murray. This piece is called “Client’s Corner.” It is one part of his monthly newsletter (which we pay for) that we are allowed to disseminate to clients. I am nothing less than honored to say that Nick chose the same data point to cover that I myself was planning to share with each of you. Given his outstanding ability to communicate, I’ll let him do that talking.
FRIENDLY REMINDERS
- Estate Planning – For many of our client’s we have had discussions about estate planning. We might have recommended the creation of an estate plan or simply a routine update due to changed circumstances. Regardless, as the dust settles after tax season, it might be a good time to review your own documents. Attached to the email is a list of questions to consider as you do so.
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We’re always here to answer your questions or address your concerns. It is a privilege to serve you.
On behalf of your PWA team,
Brock Hedgecoke, CFP®
Financial Advisor