September 1st marked the 5 year anniversary of Birds Eye Wealth Planning. Like any small business owner, milestones like that are somewhat hard to believe as I look back on the path I’ve taken in my professional life. I have all of you to thank for that accomplishment and I look forward to many more anniversary celebrations. I wanted to take this time to give you some observations on the market and look ahead to the what the next year may offer.
The financial planning landscape is ever evolving, so I’m always looking for anything that may improve the service we can provide to clients. However, as I write this today, I don’t see anything in the financial landscape that we don’t have an answer for. Whether it’s cash management, estate planning, insurance needs, investment opportunities including crypto, tax planning, retirement planning or college planning, there is nothing that Birds Eye is not equipped to handle. If you see a deficiency, I’m all ears.
As I discussed in a blog earlier this year, 2025 has certainly been a roller coaster. While we saw the quickest sell off in stock market history, an almost 20% decline in the S&P over a span of just 7 weeks, all indices have rebounded strongly. Looking at markets today, every major index is up, with the NASDAQ leading the way once again in the domestic landscape with a return of over 15%. As we look across the rest of the markets, for the first time in over a decade we are finally getting good contributions from the international space. The bond market has also provided positive results and stability when the tariff volatility first occurred. The US Aggregate Bond Index, a broad measure of the US bond market, is up almost 4%. More importantly, unlike 2022, bonds did not participate in the stock market selloff earlier in the year.
So, what’s next? As I discussed last year, inflation was and is the main driver of market returns. Yesterday, Jerome Powell spoke and as expected, the FOMC decided to cut rates 25 basis point (0.25%). While the algorithm triggered a quick selloff, markets closed relatively flat as the cut was expected. What would have moved the market was an unexpected larger cut. Powell did indicate more rate cuts may be coming in 2025. This may be showing some signs that the labor market is more worrisome to the Fed than the fact inflation seems to be stuck in the 2.8-2.9% range, higher than their 2% target.
The Fed uncertainty has been largely attributed to the potential impact of Trump’s tariff policies which was the reason for the massive 1st quarter selloff we saw earlier this year. So far, we have not seen inflation tick up, even though this higher inflation read has remained sticky. Another reason for the uncertainty is if you talk to 5 economists, you will get 5 different answers on what their impact is going to be as it relates to both the economy and inflation. As with anything else, it’s one more thing to pay attention to and, if need be, adjust portfolios accordingly should we see a jump in one direction or another.
I’m going to end this blog with a message that I strongly believe in. Your plan is YOUR plan. There is so much conflicting information out there right now that it’s easy to get paralyzed trying to make decisions. In addition to that, the amount of convenient wording, sketchy framing, and at times, flat out lies on social media on all things finance have made things worse. I’m fielding a lot of questions based on what someone saw on Tik Tok or Instagram. While I don’t think social media is the greatest place to get you financial advice from, I’m happy when something generates a conversation. I would encourage everyone to try to tune out some of that noise and if you have a question as it relates to your plan don’t hesitate to pick up the phone and talk to me. Every position in your investment has been put there for a reason. Do I bat 1,000? Nope. But if you’re wondering about the thought process, I love discussing that. If you are wondering if a change is warranted with your plan, I love discussing that. If you’re just scared, confused and frustrated from consistently hearing conflicting messages in the media I love discussing that as well. The only thing to focus on is YOUR plan and ensuring that you are on the right track to accomplish the goals we planned for.
Looking forward, I would put up Birds Eye current offerings against any planning company out there. My focus now is continuing to explore ways that new tech and AI can enhance the investment and planning process for you. In my opinion, the future of this business is to balance the use of technology while still maintaining a human touch. In the meantime, don’t forget to keep the focus on YOUR plan and not all the outside noise.
Please feel free to share this with anyone you think may benefit.
Rob