Forward Focus - July 2025

We just experienced the fastest recovery from a 15% decline in the history of the S&P 500 index. The speed and size of this year’s almost 20% decline and 20% plus recovery revealed a lot. Never in all my decades of professional management have I seen such a stark display of flip-flopping and herd mentality. At the start of the year, Wall Street forecasters predicted the S&P 500 to end the year at 6,600. Then after the market fell, they decreased their forecast by 800 points. Then after the market rebounded, mere weeks later, they changed it again. Newspapers, TV, and media all staunchly stated the market would continue to rise (until it didn’t), would continue to fall (until it didn’t) and now say it will continue to rally (because it has). I have listened to news media say the exact opposite of what they said 20 minutes earlier, have seen online headlines change from ‘Market Rallies’ to ‘Market Falls’ by simply refreshing the page, and have seen the revolving door of perma-bull and perma-bear prognosticators being highlighted based upon the direction of the market that day (or hour). If you have read any articles, listen to any podcast, or viewed any media, you could easily feel like everyone else has been 100% right and saw everything coming. Rest assured, they didn’t. They simply change their story every hour based upon what has already happened, not what will happen. Usually, these slights of hand occur over months or years, but the speed of change clearly exposed their ruse. These deceptions can cause serious harm. It can cause investors to take unnecessary risks, act upon poor ‘recommendations’, lead to improper conclusions, and distort reality.

One deception that is pervasive right now regards Risk-taking. Many investors know that markets tend to rise over time. It is a historical fact. After years of quick recoveries and solid market returns, however, that fact has led many to forsake risk altogether, assume markets regain all-time highs within a few days or weeks after selloffs, and thus conclude more risk = more money. Nothing could be further from the truth. Case in point: The Russell 2000 and the MSCI Emerging Markets index are both still down -4.7% and -11.4%, respectively, over the last FOUR YEARS! The Tech-heavy Nasdaq Composite index is relatively flat since December 16, 2024 - June 30 2025, the Nikkei 225 (Japan) is down -0.8% over the last full year, and despite the recent monster rally, the Dow Jones Industrial Average is still negative over the past 5 months! 27% of the stocks in the Dow Jones Industrial Average are still down year to date and over 38% (192 stocks) of the stocks in the S&P 500 index have lost money for investors year to date. SOURCE: slickcharts.com

All this to say, listening to the noise leads to a lack of understanding, overconfidence, and a distortion of the truth. Rest assured, the noise is not over. As the tariff threats persist and their delayed impacts are felt, the noise will continue. Solution: So, leave the flip flops for the boat and the beach and replace soundbites with sound advice. A great way to separate the facts that matter from the fiction that’s just filler, is to schedule a time to sit down with me for an annual review. Your unique personal situation is what matters most. Your financial life has a 100% correlation to you and your loved ones. Let’s discuss it. gjones@forwardinvestmentadvisors.com