Q1 2025 - The Pre-Tariff Months
It’s Sunday, April 6th and Three Fountains, the office campus we’ve called home for the last five years, is all but empty. Only a few cars vie for the parking spots closest to the doors. Iowa Wealth Management’s new suite, just one building over from our old home, is oddly quiet.
Due to printing deadlines, it’s a bit past time to write this message and a few days short of any time to access what might come next. In the quiet of my new office, I am once again struck by how no one ever knows enough. All the facts are not in and there certainly hasn’t been enough time to access what it all means. We simply do not know enough…. But then we never do. Just as I wrote at the beginning of the COVID market rout, what matters at this moment is not so much what we know as what we believe. Here is what I believe:
- What investors experienced during the first quarter may seem trivial following the last few trading sessions, but it was not. Returns, positive or negative in the first quarter, establish a starting point at the beginning of a (hopefully short) bear market. It appears that many retail and professional investors were down before the tariffs were announced. Even those who take comfort in being invested in S&P 500 index funds found themselves in negative territory. In the first quarter the S&P 500 Index delivered a total return of -4.3%, the worst total return since the third quarter of 2022. So, before things went bad, things were not good. For those of us holding more traditional blue-chip dividend stocks as dictated by Iowa Wealth Management’s Prudent Investor methodology, the returns for the first quarter were modestly positive. So, for many of our clients it can be said that, before things went bad, 2025 had been surprisingly good.
- What an investor does during a bear market is not as important as what they did before the bear market. Bad markets happen, they are to be expected... so we have collarborated with our clients to build a portfolio to assist them through troubled times.
This is an emotional moment. This is no time to flail about with dramatic changes. Anyone who has ever been caught in a storm upon a small boat will tell you that now is not the right time to start modifying the boat. Now is the time to trust the boat, maybe even enough to turn the boat away from the distant shore and into the wind. It’s what a good boat captain would do.
Past performance is no assurance of future results. Iowa Wealth Management is a registered investment adviser with it's principal place of business in the State of Iowa. Opinions expressed are those of Iowa Wealth Management and are subject to change, not guaranteed and should not be considered recommendations to buy or sell a security.