Perspective Amid Volatility

In this episode of Nurturing Financial Freedom, we dive headfirst into the recent stock market volatility and explore what’s driving it—and more importantly, how investors should respond. We tackle the question on everyone's mind: "What the heck is going on with the market?"

Ed kicks things off with a breakdown of recent market activity, noting that since the February 19 peak, the market has dropped roughly 9.5% as of April 1. He explains that this pullback is largely driven by elevated stock valuations and policy uncertainty. The S&P 500’s forward P/E ratio is sitting well above its 30-year average, which has made the market more sensitive to any negative headlines. Add to that the confusion surrounding tariffs and trade policy—especially whether these moves are part of negotiation tactics or a longer-term shift toward protectionism—and we’re looking at a market trying to digest a lot at once.

Ed emphasizes the importance of sticking to a well-diversified portfolio and keeping allocations aligned with long-term goals. If your portfolio has drifted because of recent gains or losses, now is the time to rebalance. We revisit the idea of “fire drills,” a proactive approach Birch Run uses with clients to prepare for downturns before they happen.

Alex then provides some critical historical perspective. He reminds us that every downturn—whether it's the Panic of 1907, the crash of 1929, or COVID in 2020—has been temporary. The key takeaway? Don’t let short-term fear drive long-term mistakes. He shares how missing just the 10 best market days over a 30-year span could slash an example portfolio growth by nearly $1 million. And since many of those “best days” tend to cluster around the worst ones, jumping in and out of the market is a dangerous game.

Alex and Ed both stress that timing the market is not only incredibly difficult (if not impossible), but often detrimental. Staying invested with a balanced strategy that fits your goals is almost always the right approach. While we can’t predict where the market will go in 2025, we can recommend avoiding behavioral traps and sticking to the fundamentals.

Listen through to the end of the show to hear how ice cream ties into all of this.

You can always email Alex and Ed at info@birchrunfinancial.com or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, and Jon Gay and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. Stock Market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors' results will vary. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.