The Confident Chronicles: May 1, 2025
I sit down and write this from a hotel room in Jupiter, FL as we have a booth at the PEAK Brokerage / Thurston Springer “Event of the Year – Thriving Together”.
I have a view of the Atlantic Ocean from my hotel and the weather is beautiful.
Today there is a strong wind of about 15 mph coming off the ocean. The waves look bigger than they have been in the past couple of days.
This reminds me of the markets in April.
I have been writing about market volatility for the past six months or so.
And WOW April did not disappoint.
Even today the markets started out, falling 2.30% and then reversing and rising almost 2.5% to close out with a small 0.15% gain.
And this was considered tame compared to what we saw at the beginning of the month.
So, buckle up and enjoy the ride. I don’t think the volatility is gone as there is still too much uncertainty in the day-to-day markets.
Stay confident my friends and enjoy this month’s Confident Chronicles!
-Kevin T Clark, RF™ - CEO & ERISA Nerd
Market Returns:
We use the three categories above to understand the overall market (S&P 500) and “technology” component of the market (NASDAQ) and the overall bond market (Intermediate Term Bond).
These three components give us a broad view of what is currently going on. The tech portion of the market was selling off fairly hard until this month. The bond markets staged a comeback around the same time the S&P 500 finished its Tarriff Tantrum.
As you can see, the stocks are negative for the year and the bonds have a small gain, but their 12 month averages are all about the same.
And the 4 week return of the S&P 500 (-0.27%) does not even come close to showing how volatile April really was.
Although the S&P section below does.
Above are the Morningstar “style” boxes showing returns for the size of U.S. stocks (Large, Mid & Small) and the categories showing a stock’s potential (Value, Core & Growth) for the past month.
The most “conservative” section (Large Value) of this chart was the only one to have a gain in April. The most aggressive section (Small Growth) shows the largest loss.
This is encouraging, to me, as this is how a “normal” market would behave in times of a selloff. So, maybe, just maybe, the markets will be able to begin to stare past the day-to-day headlines and start to behave fundamentally again.
As this chart shows it did in April.
Cool Charts Explained: S&P 500 Chart:
The S&P 500 experienced significant volatility, ultimately closing the month with a modest decline. The downturn was primarily triggered by President Donald Trump's announcement of sweeping tariffs on April 2, dubbed "Liberation Day," which imposed a 10% tariff on all imports and higher rates on specific countries, notably China. This move led to a sharp sell-off, with the S&P 500 plummeting nearly 10% over two days, marking one of its steepest declines since the COVID-19 pandemic-induced crash.
Investor sentiment was further dampened by retaliatory tariffs from China, escalating fears of a global trade war. Economic indicators added to the concerns, with first-quarter GDP contracting by 0.3% and inflation remaining above the Federal Reserve's target.
Mid-month, markets found some relief when President Trump announced a 90-day pause on most new tariffs (excluding those on China), leading to a partial recovery.
However, the rebound was tempered by ongoing uncertainties surrounding trade policies and economic growth.
By the end of April, while the S&P 500 had recouped all of its losses, it remained about 10% below its February highs.
Analysts cautioned that without clearer policy direction and stronger economic data, the market could face further headwinds in the coming months.
I doubt we will get a clearer policy direction, as it appears that is being made up by President Trump and could change from day to day.
PLAN CONFIDENCE MODEL UPDATES:
FUTURE CONTRIBUTIONS:
Future contributions are money that is added to your plan with every paycheck.
We monitor the future contributions monthly and are looking to direct these monies into investments that we hope to be “on sale” for the next 30 days.
If we are correct, this will allow you to buy more shares in your portfolio.
This month we are advising that you use the following:
· (Bonds) Non-Traditional Bond
· (Stocks) Mid Cap Growth
· (Stocks) Small Growth
“Future Contributions” are an optional feature in Plan Confidence, and you may or may not receive this advice.
Please discuss this with your advisor if you have any questions.
The exact amounts you should allocate depend on the model that you are using.
These categories may or may not be available in your plan. If they are not available in your plan, we will recommend the closest available asset class and label it as a “proxy”.
You can find all substitutions on your “Proxy Page” within your dashboard.
Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
CURRENT ALLOCATIONS - STRATEGIC MODELS:
Current Allocations are the monies currently in your plan.
Making changes to this money is commonly known as a “rebalance”.
Our “Strategic Models” combine the benefits of asset allocation and “buy and hold” strategies. These models rebalance quarterly back to their risk “targets” and remain fully invested through all market cycles.
Our Strategic Models rebalance the first trading day of every quarter.
Strategic Models – No Changes
(last updated on April 1st )
Please talk to your adviser if you have any questions.
The exact amounts you should allocate depend on the model that you are using.
These categories may or may not be available in your plan. If they are not available in your plan, we will recommend the closest available asset class and label it as a “proxy”.
You can find all substitutions on your “Proxy Page” within your dashboard.
Please log into your Participant Dashboard to see the exact allocations you should be using as of the last rebalance advice.
CURRENT ALLOCATIONS - TACTICAL MODELS:
Current Allocations are the monies currently in your plan.
Making changes to this money is known as a “rebalance”.
Some plans have trading restrictions on how often you can rebalance the money in your plan. Be sure to know your plan’s restrictions before implementing any tactical strategies.
Our “Tactical Models” combine the benefits of asset allocation and “momentum investing” strategies.
These models rebalance periodically back to their risk “targets” and the targets can be changed at any time given the current market conditions.
These models may go through periods of time while holding larger amounts of cash than the Strategic Models.
Our Tactical Models may rebalance on any given day.
Please be sure to look for an email from support@planconfidence.com letting you know when to make changes.
Tactical Models No Changes
(Last Updated on 03/02/2025)
The exact amounts you should allocate depend on the model that you are using.
These categories may or may not be available in your plan. If they are not available in your plan, we will recommend the closest available asset class and label it as a “proxy”.
You can find all substitutions on your “Proxy Page” within your dashboard.
Please log into your Participant Dashboard to see the exact allocations you should be using as of the last rebalance advice.
This update has been written by Kevin T Clark, RF™.
All opinions expressed are those of the author and not that of Plan Confidence Corporation nor any other firm or individual.
Kevin T Clark, RF™ is the CEO and Co-founder of Plan Confidence Corporation.
Kevin is an “ERISA Nerd” and one of only a hundred(ish) Dalbar certified Registered Fiduciaries (RF™) in the United States.
He has been helping hard working Americans invest their money since 1997!
Plan Confidence Corporation is an SEC registered “internet only” investment firm specializing in providing advice to hard-working Americans investing in their employer’s retirement plans (401k, 403b, TSP, etc).
They have created proprietary software so hard-working Americans can receive professional, ongoing advice on their employer’s retirement plan from an adviser of their choosing!
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