Hi, I’m Mike Walther, Founder and President of Oak Wealth Advisors with your 2025 first quarter market update. For the first quarter of 2025, we saw U.S. equity market returns hit small time highs but then sell off before the end of the quarter, leaving negative returns for Q1 for both the large cap S&P S&P 500 index fund and Russell 2000 small cap index. Conversely, on the international markets, we saw positive returns. In fact, it was one of the best quarters of outperformance of the international markets versus domestic markets we’ve seen in a long time. In the fixed income markets, municipal bonds were basically flat for the quarter, while taxable bonds had a very nice robust 2.8% return for Q1. What I think’s more important than the first quarter volatility and the returns that generated is looking a little bit longer. We look at five years, we see that even with the turmoil and chaos of quarter one of 2025. And the horribly negative year of 2022, which both stocks and bonds were down double digits, we’ve still managed to achieve double digit returns in virtually all of our stock investments that are held for five years or more.

At least over the last five years, we’ve seen that with U.S. equity returns around 13% and international returns around 10%. And those are average annualized returns for people who bought and held the investments through the ups and the downs. So it’s another reminder that. Long-term discipline really pays off in investing in the long-term. Looking at the headlines for the first quarter, as I mentioned, international markets outperformed U.S. markets, in fact by the largest percentage in 35 years. The biggest declines we saw came from Magnificent 7. Those are the companies Alphabet, Amazon, Apple.  Meta, Microsoft, NVIDIA and Tesla. Often in the news through the biggest companies in the United States, they had grown to be an outsized portion of many of the large stock indexes. And when the markets turned S, they took the biggest hit. In many cases, those companies lost 20% of their market value in the first quarter of 2025.

Fortunately, the Oak Wealth Advisors investment approach is much more broad and diversified. None of our clients suffer those kinds of losses because they’re not heavily invested in those specific names. With respect to global investing, the exposure we had to international markets helped. While U.S. markets declined, international stocks went up. That was wonderful in Q1.

In addition, fixed income, as I mentioned, was positive and in fact it’s well positioned with high current interest rates to have an even better time the rest of 2025 if interest rates come down. Bond performance goes up. So if the economy slows, if the Federal Reserve sees fit to lower rates to spur on economic growth, that could cause fixed income investments like bonds to outperform for the rest of 2025, something for us to all keep our eyes on as we move forward this year.

In terms of the Federal Reserve’s policies, it was expected they’d be lowering rates a few times during 2025, but that hasn’t happened yet and the new tariffs that have been implemented. Are likely to keep the Federal Reserve on the sidelines from taking any action until the results of those tariffs begin to be known. The Federal Reserve does not want to overreact too early and cause problems with the economy by either overstimulating or by tightening. So they’re going to try to see how that plays out before they take action. So we don’t expect rates to change anytime soon, but these things will be watching over the course of 2025.

Now, if you have questions about how your investments are performing or questions about the markets, I encourage you to reach out to your advisor to get those questions addressed. We look forward to hearing from you. We hope you have a wonderful rest of 2025. We’ll be here with you as your investment guides. Take care.