Client Newsletter Q1 2025
Dear Friends,
Whoever invited Captain Chaos to the party, can you please ask them to leave? As they say, "chaos breeds opportunity." While the current climate certainly feels dynamic, let’s not mistake a bit of turbulence for a full-blown catastrophe. The tariff situation has certainly intensified, perhaps even exceeding the more hawkish expectations some of us had. However, we expect ongoing adjustments to be made with each trading partner as the global trade landscape recalibrates. The scale and speed of these changes have undeniably created significant uncertainty in the market. In fact, the tariff pause had a tremendous impact on the market from the start of writing this letter to the end of typing the last paragraph.
It is understandable to be fearful, and natural for some investors to want to hit the eject button. Panic can cloud judgment, and those who panic and sell risk missing the inevitable rebound. The market ebbs and flows, and history shows that those who seek safety in times of panic often miss out on the best returns.
Despite the noise around tariffs and market losses, the broader economy remains on steady footing. The March jobs numbers exceeded expectations, and many of the key economic indicators—Retail Sales, PMI Composite, Jobless Claims, and motor vehicle sales—remain positive.
Our approach, as always, is focused on the long term. Earlier this year, we proactively raised cash positions to provide a buffer against short-term volatility. We’ve also been increasing our international exposure to take advantage of the growing trend of countries strengthening their own defense capabilities, rather than relying on others.
Our investment philosophy focuses on high quality companies with strong fundamentals that can weather shifting economic conditions. We expect these industry leaders to not just survive the current turbulence, but to come out stronger on the other side.
So, while the headlines scream doom and gloom, we see opportunity. We’re positioned to take advantage of the opportunities that arise from this uncertainty, seeking out exceptional businesses with great entry points. We’re staying proactive, continuously evaluating the market, and preparing for the long-term value that will emerge.
As was our message during the turbulent markets of the pandemic, keep calm and carry on - or as my friend trademarked for me, “keep calm and Karen on”.
To brighter days ahead!
Best,
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
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