Podcast
How Do We Manage Turbulence?
Will Simpson
February 28, 2025.
The right portfolio, plan and advisor makes the difference
February has been an action-packed month, with trade wars and tariff talks dominating the headlines. In addition, we just finished up earnings season, which saw some big tech names move to the downside after mixed results, most notably Nvidia, which dropped over 8% yesterday.
In this video, I discuss how we manage turbulence.
This week the U.S. markets struggled, especially tech stocks, as the Nasdaq dropped -3.5% and growth names saw sharp declines. Investors rotated into defensive sectors like consumer staples. Europe managed to post gains with the MSCI EAFE up +1.4%, continuing its relative strength so far this year. That said, there is a long way to go to break the long-term trend of U.S. dominance over international markets.
Sentiment hit an extreme low this week, with the AAII survey showing its seventh 60%+ bearish reading in history; a level rarely seen since 1987. Historically, such deep pessimism has often signaled market bottoms, but this time it’s coming to us with markets only a few points off all-time highs. Meanwhile, tariffs are set to hit next week, adding another layer of uncertainty. Will they go through, or is this another bargaining chip?
With markets rattled by economic softening and a tech-led selloff, the big question is whether this dip is a buying opportunity or a warning of more pain ahead. Next week’s developments — especially on trade and economic activity — will be key.
All this to say there’s been no shortage of headline news and volatility in the markets.
Through February, we have kept a neutral posture on the portfolio.
At Aretec, we’ve maintained higher cash balances, alternatives, as well as non-market assets such as gold to not only act as a hedge, but also to navigate through the volatility and noise.
As we enter March, the noise will likely only get louder. As it stands now, it looks like the trade war will heat up early next week, which will inevitably lead to unsettled markets.
At Aretec, we are maintaining a disciplined approach to investing by taking an active stance to navigating through the markets to protect and preserve capital, but also take advantage of good opportunities.
The markets, economy and world events are impossible to predict, but through our process we are managing through the turbulence and working to drive better outcomes for investors.
We want you to Realize Your Wealth™.
Best,