Monthly Outlook: July 2025
These have been turbulent times, and I can hear the fatigue in the voices of our friends and clients. 2025 is only half over and we’ve experienced so much uncertainty, erratic behavior, and shocking news. Already in 2025, the S&P 500 plunged 20% before recovering 25% for a net 0% move over just four months. That’s a 45% move in four months, to say it another way. That’s nuts! We’ve endured tariffs on, tariffs off, Ukraine vs Russia, Israel vs Iran, and Trump vs Musk. This week, we watch and wait as Congress debates whether to create a US budget with $3T deficits, the largest planned deficit during peace time ever. What will next week bring us?
But here’s the funny thing. Even with all this turmoil, our portfolios are all nicely positive, YTD. Depending on the model, portfolios are up 4% to 7%, YTD, and still trending higher. US stocks, especially small company stocks, have been volatile and lagged other asset classes. INTL stocks, especially European stocks, have gained double digits and contributed a lot to our portfolio returns. Bonds are up 3% to 4%, pulling their weight. Safe “cash” or money funds are up just 2.1%, YTD. It’s been a decent performance year, so far, in spite of the headline news.
Wealth Management – More Than Money
As wealth managers, we focus a lot on making money for our clients, carefully. But there’s so much more to living a rich and fulfilling life. At mid-year, and as a break from the volatile news and markets, it might be a good time to focus on the bigger picture.
Health, without it, nothing else matters. It seems that so many of us are dealing with health issues or know someone who is. All the money in the world won’t help if your health is failing. Take time to take care of yourself. Get a checkup, lose those five pounds, exercise, stretch, flow, drink your water! And don’t forget mental health, too. It’s just as important as your physical health.
Community, it’s not an option. We’re social animals, and need connection and friendship. We lost a lot of that during COVID, and remote work has confined many workers. But it’s time to re-engage and get out there. Visit a friend, talk to a neighbor, join a group. There’re countless opportunities to be social and rebuild a network of friends. You might just find them in the strangest places.
Charity, do something for someone else. There are plenty of people and places in need and it’s good to shift our focus away from ourselves and onto others. It doesn’t have to be a grand gesture, either. Sometimes, a small check, or a volunteer hour, or just holding a door for someone, sends the message that “I see you,” and that helps.
Get tucked in, finish a project, check off the boxes. We all have projects that we’ve put off for no good reason. Focus on it, and get it done. Sort your photos, update your will, and review your insurance beneficiaries. Admiral McRaven advised to “make your bed every morning” because completing small tasks starts you on a path to completing bigger ones.
Unplug, and chill. We all know that we’d survive just fine with less news and less distraction. Pick up an old-fashioned book, go for a walk. As we said in the first paragraph, we survived the first half of 2025 just fine in spite of the chaos and volatility. The world will be just fine without our obsessive addiction to the play-by-play version of it.
Investing, our last point. There are times to run, and times to walk. With stock market valuations at 100-year peak levels, a slowing economy including stalling house prices, rising unemployment, slowing consumer spending, falling consumer confidence, etc., now is a good time to review your investment strategy.
Wealth management balances life goals, growth, and risk management. Now might be the time to rebalance your allocation. Trim stocks if they’ve run up and are overweight in your portfolio. Consider protection strategies like covered calls, buying puts, and hedges. Our own portfolio management strategy, iFolios, uses moving average crossovers as our signal to sell and limit exposure to stocks during downtrends. It’s not the only strategy to balance growth and protection, but it’s a good one and it works. We hope everyone lives their best life, in all ways, and that their money works to support them. We can help with that last part.