March 2025

The S&P 500 fell for the second month in a row, but this time we were down -6%, recording our worst quarterly performance since 2022. The uncertainty around the current administration’s economic agenda and subsequent trade war has left investors befuddled. Tariffs generally hurt economic growth and spur inflation, which will cause the Fed to increase interest rates again. At the same time, the goal to bring back manufacturing jobs is contradicted by executives, including Elon Musk just a few months ago, stating that AI and robots will be doing most of those jobs (which we’ve already seen with Hyundai’s recently opened factory, where their newly acquired Boston Dynamics robotic dog, Spot, now performs much of their safety and quality inspection responsibilities… and with the speed of AI, including Tesla’s new humanoid, most of these factories will soon be completely automated). The short-term pain that will impact prices, and subsequently consumer spending (which accounts for two thirds of our economy), coupled with the uncertain long-term benefit, is causing investors to simply pull their money and sit on the sidelines. However, we’ve seen the whipsaw policy reversals before, so it’s a great reminder to stay diversified, make sure your investments are long-term, and potentially buy during the dips if you believe in American Ingenuity, which is currently undefeated, and continues to solve problems and innovate through creative and resourceful solutions!   

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