May Market Update: That Was Fast

Quote of the Month:

"It is human nature to overestimate risk and underestimate opportunity." – Jeff Bezos

From Panic to Rally—In Just 27 Days

In my April update, I wrote about how tough stretches in the market often lead to strong gains. I didn’t expect to be following up so soon with this: after the S&P 500 dropped sharply to start the year, it then dropped 10% in just two days. Following that, we saw a 19% rally in only 27 trading days.

I also noted that in the rare historical cases when the market dropped that fast, double-digit gains 6 and 12 months later followed 100% of the time. We didn’t even have to wait that long. We’ve already hit it (So much for my long-term wisdom).

This is exactly why my favorite phrase is: “Volatility is the price we pay to invest.”

Timeless Truths from April (That Still Matter)

Here are a few key points from what I emphasized last month that still apply right now:

• You can’t time the market. No one can—not me, not you. April proved why we don’t try. The market dropped fast, then turned just as fast. And unfortunately, those who jumped out early must have forgotten that the market doesn’t send “save the dates” for rallies. They likely missed one of the best stretches in years.

• Staying put works. Market pullbacks always feel uncomfortable in the moment. But history shows they often lead to future gains. That’s why we continue to say: stay the course, or even buy more if you can.

• Your long-term plan shouldn’t change based on short-term noise. Whether it’s volatility or a rally, our plan is built to weather both. We don’t chase the market—we stay aligned with your goals.

  
  

What We’ve Been Doing (and What’s Next)

So, what happens from here? Your guess is as good as mine.

Honestly, no one knows. It’s hard to imagine another round of double-digit gains through yearend, but it’s certainly possible.

What I do know is we are entering what’s known as the “summer doldrums”—a seasonal period when markets tend to trade on lighter volume. With vacations, fewer earnings reports, and less activity from institutional investors, summer can feel a little quieter (Yes, even Wall Street wears flip flops). That said, volatility can still appear unexpectedly when volume is thin.

At the same time, recession fears remain a hot topic in the headlines. Remember what we learned in Econ 101: recessions are a natural part of the economic cycle. That doesn't mean we like them, but they’re normal.

As a reminder, the market is a forward-looking mechanism, and it will be the first one to tell us a recession is coming, but it sure isn’t pricing in a recession right now. Could that change? Absolutely. But as always, we don’t make emotional decisions based on “what ifs.”

What do we do?

We stay disciplined, and we act when opportunities arise. Speaking of, this past month, we used the rally as a chance to rebalance all our model portfolios. That means buying and selling to ensure we stay aligned with your long-term goals and risk tolerance. It’s the kind of proactive, not reactive, work we believe in. So, you should see that in your statements!

Enjoy Your Summer

Fun fact: Axio was founded on June 6th. That first summer was anything but relaxing—it was all hands on deck to build what we have today. At the time, I couldn’t imagine having the bandwidth to sit and write blog posts like this.

Now, here we are. This summer will be very different for us, and in many ways, better. Like more sunscreen and fewer spreadsheets. I’m incredibly excited about what’s ahead, and we’re grateful that you’ve been a part of this journey with us.

On behalf of the entire Axio team, thank you. We would not be here without you.

And as always, if you have questions about your portfolio, your plan, or just want to talk through the latest news—we’re here for that.

Have a great summer.

— Wes Heinrichs

Written 05/21/2025.

The opinions in the preceding commentary are as of the date of publication and are subject to change. Information has been obtained from a third-party sources we consider reliable, but we do not guarantee the facts cited are accurate or complete. This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We may execute transactions in securities that may not be consistent with the report’s conclusions. Investors should consult their financial advisor on the strategy best for them. Past performance is no guarantee of future results. Securities offered by Alexander Capital, LLC Member FINRA/SIPC.