For the sixth time in the last seven years, the stock market is on track to deliver double-digit returns. This remarkable streak, interrupted only by the 2022 inflation-driven downturn, has left many investors in a positive financial position.
In November, markets experienced a brief period of volatility that affected many asset classes. While major indices have delivered strong year-to-date returns across stocks, bonds, and international investments, investors continue to worry about artificial intelligence-related stocks and the path of Fed rate cuts. At the same time, the government shutdown delayed the publication of key economic reports, making it more difficult to judge how the economy is doing.
A quote often attributed to Winston Churchill is that "it is more agreeable to have the power to give than to receive." The holiday season is a natural time to reflect on charitable giving and the role it can play as part of a comprehensive financial plan. Thoughtful charitable planning can not only support philanthropic goals, but increase tax efficiency as well. The question isn't just whether to give, but how to give in ways that maximize both the impact on causes you care about and the benefits to your overall financial plan.
As the holiday season begins, it’s the perfect time to pause and appreciate what we have, both in our personal and financial lives. This is particularly important since investors tend to focus on what could go wrong rather than what has gone right. At the moment, with markets performing well, it’s helpful to reflect on the past year to gain perspective as new challenges and opportunities emerge.
The stock market continued its strong performance in October despite uncertainty from a government shutdown and renewed trade tensions with China early in the month. Many major indices reached new all-time highs after recovering from a brief period of volatility. Bonds also contributed positively to portfolios as interest rates declined, fueled partly by the Federal Reserve's second consecutive rate cut.
Concerns that a trade war will lead to a recession have spread around the globe. The possibility of retaliatory tariffs is on investors’ minds, with China responding with counter-tariffs, increasing the odds of a worst-case trade war scenario. Markets in Asia and Europe have declined alongside U.S. stocks, and there has been a “flight to safety” as bond prices rise and interest rates fall.
With the stock market back near correction territory due to tariff concerns, some investors may feel as if the market is stuck in a “Groundhog Day” loop. Fears of a trade war have kept markets choppy all year, with the technology sector leading the downturn. After months of uncertainty, some investors may feel as if financial markets will never stabilize. How can long-term investors maintain perspective in this challenging environment?
Federal Reserve policy has been a key driver of markets over the past few years. It’s not surprising to investors that changes in policy direction have resulted in market swings, most notably in 2022 when the Fed began to hike rates, and again last year when investors anticipated Fed rate cuts. So far in 2025, the Fed has kept policy rates unchanged despite investor concerns over tariffs, consumer sentiment, and a possible economic slowdown. Why is the Fed on hold and how does it affect long-term investors?
Concerns over the economy have intensified, leading to a challenging investment environment. The S&P 500 briefly fell into correction territory recently (a decline of 10% or more), while the Nasdaq and major technology stocks have led the downturn. In times like these, it's important for investors to remember that market uncertainty is a normal part of investing. While downturns are never pleasant, history shows that those who stick to their financial plans are in a better position to achieve their long-term goals.
When it comes to financial planning, it's important to recognize what we can and cannot control. We can control our own behavior, make thoughtful financial plans, and adjust our strategies as needed. However, we don't control the economic cycle, market movements, or policy decisions that impact the broader financial landscape. Recognizing this distinction allows us to focus on the aspects of our financial lives where our decisions truly matter.
Rainer Wealth Management
390 Diablo Road, Suite 202 | Danville, Ca 94526 | (925) 217-4280
