Financial Planning Fridays #151: 2025 Midyear Update

Hi friends. I can't believe it, but we're now more than halfway through 2025. I wanted to take three minutes with you to revisit the outlook that we shared back in January and reflect on how things have unfolded so far this year. The first half of the year has been one of the most volatile periods we've seen in some time, but also was full of opportunities.

Let's take a look back at the three historical clues we discussed at the start of this year. First, we asked whether stocks can continue to outperform after two consecutive years of 20% plus gains. History suggested the answer was yes. And that's exactly what we've seen so far. The S&P 500 is up about 5.12% through June, right in line with the historical average full-year return of a 12% gain during similar previous scenarios.

Second, we emphasized the importance of staying diversified even when U.S. large-cap stocks had been leading the way. That message has proven especially timely. This year, international stocks have taken the lead. And by maintaining diversified portfolios and rebalancing along the way, our clients have benefited from strength across different areas of the market.

Finally, we discussed the likelihood of a meaningful market decline at some point in 2025. That too came to pass, with U.S. stocks dropping nearly 20% following the tariff announcements. But because we were prepared, we didn't panic. We rebalanced and used that volatility as an opportunity for our clients, not a setback.

If the first half of this year is any indication, the second half will bring its own mix of surprises, both good and bad. But through it all, our strategy remains the same: stay diversified, stay disciplined, and stay focused on your long-term goals. Thank you again for your trust and partnership. I look forward to talking with you next Friday and continuing this journey together.