How 'bout That Market?

How ‘Bout That Market?

Good morning!

Today, let’s take a moment to reflect on the ever-evolving landscape of the stock market and what it teaches us about volatility and resilience. Recently, we witnessed a historical market turnaround from April to May 2025, prompting the question: Why does it often take years for investors to recognize that sticking with the market usually leads to gains?

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Markets and Volatility

Markets have always exhibited volatility—swinging dramatically in response to economic data, geopolitical events, and investor sentiment. For those who have weathered the storm, the recent events serve as a stark reminder of the importance of staying the course and maintaining a long-term perspective.

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A Historic Turnaround

The April–May 2025 market turnaround was remarkable, marking the fastest shift in investor sentiment ever recorded—outpacing even the dramatic rebound witnessed during COVID-19. The CNN Fear & Greed Index, a barometer of investor sentiment, moved from a state of “Extreme Fear” at around 25 in early April to soaring over 70—“Greed”—by late May.

This shift highlights how quickly market psychology can change and how profoundly investor behavior drives market dynamics.

From April 8, when the market hit a low, to May 29, the total rebound was an impressive 22%. This V-shaped recovery now stands as the second-fastest in U.S. history, behind only the 2020 COVID-19 rebound. These swift recoveries remind us that while markets can be unpredictable, they often rebound sharply after downturns.

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The Power of Policy and Liquidity

What fueled this remarkable turnaround? A combination of:

• Policy reversal
• High liquidity
• Aggressive retail buying

When central banks and governments act decisively—whether through monetary easing or fiscal support—investors often regain confidence. That renewed optimism frequently leads to buying activity that pushes prices upward, and quickly.

High market liquidity also plays a critical role. Investors with available capital often view downturns as opportunities, speeding up the recovery. Meanwhile, retail investors—now a significant market force—have helped drive sharp upward momentum with their collective activity.

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The Role of Tech Giants

Let’s not forget the major tech players. Apple, Microsoft, Meta Platforms, Nvidia, Amazon, Alphabet, and Tesla collectively accounted for over 40% of the S&P 500’s gains since the April 8 low. These firms are no longer just participating in market cycles—they’re helping lead them.

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Final Thought

Volatility isn’t going away—it’s part of the investing landscape.

But with the right plan and perspective, it’s possible to understand it, protect against it, and even take advantage of it. If you’d like help navigating market swings or ensuring your portfolio is prepared for what’s ahead, we invite you to reach out. Let’s have a conversation.