Markets Are Not Supposed To Like Uncertainty, Right?

Since I began my career in the investment management industry over 25 years ago, I have been repeatedly exposed to certain fundamental truths about investments, and there are only a few more logical and proven than “markets don’t like uncertainty!.”
 However, as I view the economic and political landscape in which we have been operating over the past few months, markets may not like uncertainty, but the year-to-date returns of most stock indexes do not reflect disapproval.  

The index chart displays specific asset classes available in the public markets and their performance for the six months ended June 30, 2025. A well-diversified portfolio can include portions of various asset classes, with allocations tailored to personal objectives, financial situation, and risk tolerance.

Indices are not availble for direct investment.

To summarize, at this time, we have global tariffs either in effect or soon to be implemented, unless further delays, waivers, or additions occur. We have also taken aggressive military action in our foreign policy, and we have just passed a bill that will conservatively increase our national debt to $40 trillion in the next few years. The Federal Reserve has become constrained in dealing with interest rates – it would like to lower them, but the tariff situation has made them reluctant to trigger a possible surge in inflation. The higher rates can stagnate the economy. Arbitrary threats to sanction U.S. companies and industries unless they modify their policies and actions do not reflect market “fair and free trade” principles.

Nevertheless, the markets appear to be in a “wait and see” mode while rising occasionally on positive rhetoric. So far, only two global tariff agreements have been reached, with Britain and Vietnam. In the next few weeks, we will be exposed to actual data, including earnings reports and monthly indicators such as GDP, inflation, productivity, and unemployment. It appears the long-term negative impact of the tariffs may take some time to manifest.

Evaluating Performance

Separating the major asset classes and their returns can help you evaluate the performance of your portfolio. The indexes are not real investments; they do not include any fees from outside brokerages, custodians, or advisors of any kind. The holdings of Individual stocks, mutual funds (balanced), or ETFs that are not identifiable with a specific asset class will be more challenging to evaluate. Don't hesitate to contact us at (925) 484-1671 or email us to review your current portfolio at no charge. We'll determine if your asset allocation is suited to your financial situation.