The midyear investment landscape offers a timely reminder of why foundational principles matter. The first half of 2025 saw markets crater in April amid a tariff shock, then quickly rebound and recover to new highs by June. Economic data surprised both positively and negatively, and geopolitics added fresh uncertainty. Through it all, the value of preparation, discipline, and perspective was once again affirmed.

Continued Progress

U.S. large company stocks posted positive returns for the first half of 2025, driven by strong corporate profits and continued enthusiasm for artificial intelligence applications. Large company benchmarks reached new highs in June, propelled by a handful of premier companies. Foreign stock markets enjoyed a resurgence, buoyed by more stimulative fiscal and monetary policies. Small and mid-cap U.S. stocks were noteworthy laggards, due to comparatively slow profit growth. Meanwhile, bond markets provided solidly positive returns for the period, and yields on cash exceeded inflation.

Declining inflation provided some relief for consumers while fueling hope for a pivot to lower policy rates by the Federal Reserve. Yet signs of economic deceleration, particularly in housing markets and commercial real estate, remind us that the next phase may bring new challenges.

Principles Confirmed

If the first half of 2025 reinforced anything, it is that market turbulence is not an “if” but a “when.” Volatility tested investor fortitude early in the year, amid Middle East tensions, tariffs, and a brief spike in energy prices. Those who maintained appropriate portfolio safeguards were better positioned to ride out the fluctuations and make opportunistic stock purchases rather than selling at distressed prices.

This period underscored the importance of sound investment policy guidelines: asset allocation, diversification, and rebalancing. Technology stocks sold off precipitously during the tariff shock and then resurged to new highs by June, and similar volatility manifested in other sectors. Thoughtful portfolio adjustments amid turbulence can help assure investors “sell high and buy low”—not by timing the market, but by methodically maintaining balance and diversification.

Behavioral Checklist

Periods like these reaffirm essential guidelines for successful investing.

• Expect volatility and prepare for it with an asset mix aligned to your goals, time horizon, and risk tolerance.
• Avoid reactive decision-making; market timing is seductive but unreliable.
• Tend to asset allocation deliberately, rebalancing based on policy guidelines rather than emotion.
• Maintain a long-term focus, especially when the short term feels uncomfortable.

We are fond of describing investing as a marathon, not a sprint. Bartlett was not downcast in April, and we are not exalted in July. A favorite adage bears repeating: “time in the market is more reliable than market timing.” Missing just a few strong days can significantly impact long-term progress, and those days often follow periods of acute discomfort and doubt. Patience and perspective are indispensable for successful investing. In hindsight, every cycle makes these points clearer—but it is in the moment, when confidence is threatened, that they matter most.

Looking Ahead

The second half begins with uneven global economic growth and fluid U.S. tariff policy. Corporate profits are currently strong, though driven by leading companies in just a few sectors. The Fed’s next moves on interest rates, which are likely to be measured and gradual, will continue to shape both bond and equity markets. Diplomatic tensions, including war, will provide additional uncertainty for investors.

Come what may, Bartlett will navigate based on principles rather than predictions. Dispassionate rather than dramatic; reasonable instead of rigid; preferring substance to sizzle; trusting in time rather than timing. We know thoughtful financial planning, careful diversification, and periodic rebalancing are essential ingredients for realization of your long-term goals.

Concluding Comments

As always, we appreciate the trust you place in us. The profession we love is made possible by your confidence and loyalty. Bartlett is on track to achieve our goal of 98% client retention again in 2025, and we have welcomed many new clients this year. Always in growth mode, we have added to our staff again this year, assuring a high level of fiduciary service while promoting business continuity. Please recommend us to friends and family who could benefit from our services.

Finally, we hope you will join us for Bartlett’s Summer 2025 Strategy Update webinar on Wednesday, July 16 at 11:00 AM ET/10:00 AM CT. Please click the button below to register.

DISCLOSURE

This material provided by Bartlett Wealth Management (“Bartlett”) is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Nothing in these materials is intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Past performance is not a guarantee of future results. Opinions expressed by Bartlett are based on economic or market conditions at the time this material was written; actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Bartlett, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Any reference to an index is included for illustrative purposes only.  Indices are unmanaged vehicles that serve as market indicators and do not account for the deduction of management fees and/or transaction costs generally associated with investable products.