Hi, I’m Mike Walther with the Oak Wealth Advisors market update through May of 2025. This update’s going to be a little bit different than the past. We’re going to talk both about the actual performance of the markets, but also a perspective on how to think about how the markets act over shorter periods of time.

Let’s start by looking back at the tale of Rip Van Winkle, who had traveled out to the forest and then fallen asleep for 20 years, right at the start of the Industrial Revolution. He woke up to a significantly changed country. Let’s compare that to 2025. If you had a friend who had fallen asleep or passed out at New Year’s Eve and didn’t wake up until the end of May, what would you tell them had transpired while they were asleep? Significant disruption. Lots of changes in Washington, DC, policy changes, legal threats. Yes, all that would be true. How would you explain what the markets did during that same time period? Well, it’d be logical to expect that with all the volatility in Washington, DC and around the country and around the world for that matter, that the investments would have been negatively impacted. Let’s take a look if that’s the case. It’s not.

Surprisingly, despite all that volatility, the investment markets around the world were rather resilient. In the United States, the S&P 500 index was actually up 1.1% through the first five months of the year and up 13 1/2% looking back over the past 12 months. That’s better than the long-term average return for that index over a one year period. Similarly, international markets as proxied by the All Country World Index was up 5.33% in just the first five months this year and up over 14% over the past 12 months. Again, better than the long-term return for that market. On the fixed income side, the bond index was up 2 1/2% year to date. And up 5 1/2% over the past 12 months. Again, really decent expected returns from the fixed income investments. Our complementary strategies, which we used to dampen the volatility in a portfolio, both performed essentially as expected during a very volatile period. They were essentially flat year-to-date and over the past 12 months had generated very nice returns of over 8%. So really everything has worked just fine over the first five months of the year, despite all the volatility we know occurred during that time period.

So if we’d fallen asleep, woken up at the start of June, looked at the investment results, you’d expect that nothing had happened in the background. Things were just moving along nicely. Well, we all know better. It’s not what happened, but it is a cautionary tale about why we don’t want to overreact to short-term news stories.

Look at this chart. It shows the long-term performance over the past twenty-five years through 2024 of owning the S&P 500 index fund. As you can see on the far left-hand side, if you were invested in the market over the entire time period, your average annual return would be 7%. If, however, you missed just the 10 best days over the past twenty-five years, you’ll have lost over 2 1/2%. You’d be down to 4 1/2% for your average annual return, and God forbid you missed the 40 best days over a twenty-five year period, you’d have a negative return for your investment holdings. That’s a terrible result. It’s why market timing doesn’t work. Nobody’s able to predict exactly the best dayers to be in and out of the market, and you can see the devastating results. Now, is it possible to make it literally pick the 40 best days and be out just those days? No, that’s unrealistic. But the reality is, trying to time when to be out of the market is a fool’s game. We’re not going to do that. We just want to take that risk with your money or our own. That’s why you shouldn’t do it either. Market timing is devastating and cause you to lose significant returns.

So with that, we’ll let you know that year to date the investments have done just fine going forward. We hope for similar results through the rest of the year. But regardless, we hope you enjoy your summer, you don’t overanalyze your holdings and you trust us to do our job prudently managing your portfolios. If you have any questions about your investments, please reach out to your advisor at Oak Wealth Advisors. We’re here to answer those questions and make you feel comfortable about your portfolios. Best wish to everyone for a wonderful summer.