Wise Words from Wes

I've been getting a lot of calls and messages lately, and it’s clear that many clients and investors are feeling more anxious about the markets. I completely understand why. With the market dropping 5-7% over the past few weeks, along with a wave of headlines from Washington and abroad, it’s natural for concern to rise. Honestly, this is exactly what tends to happen during periods of market volatility, so what you’re experiencing is completely normal. However, it’s also important to remember that this is exactly the kind of environment that makes investing difficult—especially if you’re trying to time the market. Emotion is often the biggest obstacle to a solid investment strategy. So, what’s really going on right now? It’s easy to blame the recent market decline on all the headlines we’ve been seeing lately—Tariffs, Ukraine, DOGE, Immigration, and so on. And while some of these issues may be having an impact, many of them were already known to be priorities for the Trump administration. So why is it only in the last couple of weeks that we’re seeing this market reaction?

Here’s an interesting insight that might explain some of the recent weakness: Historically, the second half of February tends to be a weaker period for the market, with that trend often extending into mid-March. The S&P 500 reached an all-time high on February 19th, and since then, it’s experienced a significant correction (see chart A).

Not only were we in a historically weak period, but since 1942, the market has averaged a 10% correction every 16 months. The last major correction we had was in October 2023—almost 16 months ago (see chart B).

Is this just a coincidence, or is it part of a larger trend? Maybe it’s a bit of both. Regardless, these patterns are hard to ignore. Corrections are a natural, normal part of the market cycle and can even be healthy in the long run. While seeing our investments decline in value isn’t pleasant, remembering that these fluctuations happen regularly can help us stay focused on our long-term goals. Past performance is no guarantee of future results. For illustrative purposes only and not indicative of any actual investment. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. These returns were the result of certain market factors and events which may not be repeated in the future. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person.

The above summary has been obtained from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness.

Past performance is no guarantee of future results. For illustrative purposes only and not indicative of any actual investment. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. These returns were the result of certain market factors and events which may not be repeated in the future. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person.

Securities offered by Alexander Capital LP Member FINRA/SIPC. The above summary has been obtained from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness. Past performance is no guarantee of future results. The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual.