April showers bring May flowers...you have heard it over and over in your lifetime. You probably didn't know that this is from a short poem written in 1157 by Thomas Tusser. It seems tailored for the southern U.S. as the weather in Spring is truly unpredictable.
The financial markets version of this poem in 2025 could be “Agonizing April...Maybe May?” All year I have written to you summarizing my opinion of the main topic of conversation, the Trump Administration’s tariff program. My opinion was it was the Right Plan...Wrong Execution meaning that as a nation our $1 trillion plus in trade deficits need to be reduced, but the execution of the rollout was not very good....to say the least.
As we enter the next 100 days of the Trump Administration, I expect multiple announcements on changes to current trade agreements. It is reported that over 300 countries have reached out to work out an agreement. Announcing new, updated trade deals should calm the markets and turn the focus to tax and other policies.
This doesn't mean the economy will soon rocket forward. Just today it was announced the U.S. had negative economic growth because of the tariff uncertainty, as companies became more conservative in their growth outlook. Another negative quarter and it will officially be a recession.
While a recession is possible, if it happens it should be very mild, in fact I do not anticipate one happening. Unemployment is still low with no signs of mass layoffs, and consumers are still spending, even though the surveys say they are concerned.
In the first quarter, the financial markets rode a daily rollercoaster, with the VIX risk index shooting up. However, I could not be happier with the performance of our client portfolios. Over the years, the dividend stocks not only compound into more shares, but they are also less volatile than the growth investments that dominate the markets. According to reports, retail investors kept their holdings, while many institutional investors panicked and sold. So, give yourself a high five as research shows that investment returns in the years following a huge risk spike outperform...a reward for patience, just what we preach daily.
April showers bring May flowers; the running joke is May flowers bring Pilgrims...but I say pollen! Have a sneeze-free blessed day! Feel free to pass along this message to anyone you feel needs to hear it and let us know if you have any questions or need anything.
Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results.