While the beginning of the year was promising, US equities ended the first quarter near correction territory (defined as a decline of 10%). Market corrections are an inevitable part of investing and not uncommon, typically occurring about every 18 months. Given how market gains became concentrated in a handful of very expensive stocks, a correction was expected, especially with the prospect of heightened volatility following the new administration’s tariff policies.
Mega cap stocks, along with the growth-oriented companies associated with AI that carried the market higher over the last two years saw an outsized decline. The long-awaited participation by lower priced stocks and international markets was finally taking hold, right up until the upsized tariff announcement on April 2nd, which sent global stock markets into tailspin. The risk of the correction turning into a bear market (a 20% decline) increased significantly, especially when alarm bells in the bond markets sounded.
We experienced a temporary relief rally after the 90-day tariff pause was announced (which we attribute to upset credit markets), then uncertainty again took hold as investors digest how a possible trade war with China and other countries may play out.
The direction markets go from here directly hinges upon how trade policy ultimately settles. We view this as a 50/50 scenario – and therefore mostly uninvestable.
That does not mean that we have not taken action. Helping our clients achieve long-term financial success is a primary mission. We take action to avoid normal temporary downturns and corrections that could evolve into full-fledged bear markets. Learn more about how Integras Partners is navigating today’s markets.
Call us today to learn how we can help. 404-941-2800
