The Market Tide May Be Turning
Though the S&P 500 is up 1.4% through the end of February, it’s the broader “S&P 493” that is keeping the index afloat, while the Magnificent Seven have entered a selloff phase. This shift signals a potential market rotation, where leadership moves away from the largest tech names toward broader opportunities.
A similar pattern is playing out globally. While US stocks outperformed in 2024—
● S&P 500: +25.02%
● Dow Jones: +14.99%
● MSCI EAFE (International Developed): +4.35%
● MSCI Emerging Markets: +8.05%
So far in 2025, international stocks are taking the lead, handily outperforming US stocks.
The Power of Diversification
One of the biggest mistakes investors make is chasing past performance, putting too much money into what’s already run up. True diversification isn’t just owning multiple stocks—it means spreading exposure across sectors, company sizes, and geographies. It also includes bonds and alternatives like gold, both of which have been positive so far in 2025.
A diversified portfolio won’t always be the top performer in the short term, but it dramatically reduces the risk of major losses. Market pullbacks are normal and healthy—and they create long-term opportunities for those who stay disciplined. If you’re making automatic contributions through a 401(k) or have cash on the sidelines, these moments can be a great buying opportunity.
Volatility is part of the journey, but patience and discipline win in the long run! As always, let me know if you’d like to discuss your specific portfolio.
