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“Ladies and gentlemen, this is your captain speaking. We’re expecting some turbulence ahead, so please return to your seats and fasten your seatbelts. It should only last a few minutes, and we anticipate a smoother ride thereafter.”
How many times have you heard some version of this announcement while flying? Dozens—if not hundreds! It’s so common that most passengers rarely pause their movie or remove their headphones to listen. While getting bounced around in a metal tube at 30,000 feet can be unsettling, we logically understand that turbulence is a normal part of the journey and won’t significantly impact our arrival at the destination.
Just like flying, a little turbulence is a normal part of investing. Emotionally, it can be unsettling to see daily swings in the market, but we must remember to set emotions aside and focus on the bigger picture. Short-term volatility is expected. It’s during these periods that we must prioritize logic over emotion and not let momentary discomfort derail our long-term investment plans.
Heading into 2025, our team anticipated an uptick in market volatility due to factors such as tariffs, geopolitical tensions, and Federal Reserve policy. While the market was aware that these discussions would take place, volatility has increased due to the rapid pace at which these issues are evolving, shifting, and being re-evaluated. Markets move and re-price based on new information—and right now, a wave of fresh developments is arriving daily, sometimes hourly.
At Cornerstone, we believe this volatility is temporary, largely because potential resolutions to many of these issues are already on the table. While short-term market swings may persist for a period, we expect clarity on key matters in the coming weeks. Despite the current turbulence, we remain confident in the longer-term outlook, supported by solid economic fundamentals.
It’s also important to remember that the headlines and stock market movements you see in the news may not directly reflect what you experience in your own portfolio. We construct high-quality, well-diversified portfolios tailored to each client’s unique situation. Headlines can often trigger emotional reactions—even when they’re not warranted.
So, as your “captains” at Cornerstone, we remind you that turbulence is normal. While short-term volatility can stir emotions, it’s crucial not to let fear take the wheel. Staying the course and making disciplined, logical investment decisions is what ensures we reach our financial destination safely.
