2025 Halftime Update - Travis

AAA Team
6 days ago
4 min read

Updated: 6 days ago

As the stock market closed for trading on June 30, 2025, it marked the completion of a chaotic three-month window for investors.

In April, fears of tariffs and worsening trade relations caused investors to panic. An encompassing feeling of dread that “this time is different” took hold and 401k and IRA balances felt the downward pressure.

In May, a feeling of “it won’t be as bad as expected” caused a swift bounce off the April lows. We saw glimmers of hope emerge from sources online that trade negotiations were going well.

In June, we hit a new record on the S&P 500 and Nasdaq index.

Whew.

Let’s say you were only shown two numbers: 5,881 and 6,204.

The first number is the level the S&P 500 traded at on December 31, 2024.

The second number is the new record high the S&P 500 reached on June 30, 2025.

Between those dates, a lot happened:

But if you held onto your investments and didn't sell everything out of panic, your properly diversified portfolio should have increased in value over the last six months.

This stretch of months, and many, many examples before it, highlight the importance of having a plan – and sticking to it.

Simple, but not easy. When the stock market begins to show deep red days one after another, the bad news is difficult to ignore, and good news can be obscured.

There is no way to know if we’ve seen the worst of this current period of market volatility. As I write this, there is remaining uncertainty about trade negotiations and the effect of tariffs on corporate earnings.

One thing we know with certainty is that volatility is an inseparable part of investing in assets with any level of risk. Seeing the stock market decline by an uncomfortable amount every few years has been the price of admission to getting returns that have compounded over time.

Historically, that trade-off has proven to be worth it as the stock market has marched on to higher levels. While there is no guarantee that this continues, the reality for most people is that taking some level of risk has been necessary to outpace the rate of inflation and ensure that financial goals are being met.

The point in having a plan is to protect yourself against near-term events derailing everything you’ve built. In my view, a healthy financial plan considers one’s lifespan (and possibly beyond) when making all investment decisions. When you have rules in place, it prevents selling out of investments at fire sale prices and buying due to FOMO.

When the markets get volatile, we get busy. Most people have been through multiple stretches of sour markets in their lifetime, so they know how to react. For those who have not or need a refresher, I’ve written down three ways to get through a period of time when it feels like the sky is falling:

1) Review your plan and acknowledge and execute any changes that need to be made.

Ask yourself: “Do my current situation and plans for my future require that I make any adjustments to my portfolio holdings?” The news of the day or current market volatility should not factor into this decision making. Your goals and time horizon should shape the composition of your investment portfolio. In moments of market crisis, rather than selling everything to cash, consider if reducing your allocation in equities to a smaller amount is more appropriate given your situation.

2) Look for opportunities.

I was recently reminded of a popular quote by Benjamin Franklin:

“An investment in knowledge pays the best interest.”

Volatile stock markets present great opportunities to build wealth. The difficult part is knowing what the opportunities are and having the courage to execute.

Here is a noncomprehensive list of opportunities we looked at for clients during the recent market volatility:

Rebalancing portfolios to previously agreed asset allocation
In-kind Roth conversions to take advantage of converting more shares at lower prices
Tax loss harvesting in taxable accounts to offset future capital gains
Investing cash from money market funds into quality equities
Making contributions to retirement accounts and investing at lower prices
Accelerating purchases in a dollar cost averaging system

Not everything on the list will apply to you, but knowing the various strategies is a critical piece to building wealth during a time when others are focused on the negative.

3) Limit your exposure - stay off social media and reduce intake of alarming news headlines

I made the mistake of reactivating my Twitter/X account during the height of April’s volatility. There are a lot of nonsense takes on social media that can show up on your feed unfiltered by accuracy.

Social media is not the root issue. It is exposure to a constant barrage of news that can easily cause an investment plan to derail.

Watching financial news on TV, reading it in the paper, or checking your account balance online every hour will have a similar effect. The desire to make sweeping changes to your investment plan becomes stronger after that exposure and it is always based on short-term thinking.