Dear Clients & Friends,
As we move deeper into spring, the financial markets continue to swirl through a complex blend of crosscurrents—some encouraging, others more uncertain. After a sluggish first quarter for US stocks, April brought a modest pullback across the major market indices, driven by hotter-than-expected inflation data, shifting interest rate expectations, and renewed geopolitical tensions. While the slower start to 2025 may feel disappointing in contrast to the strength of prior years, this kind of early-year volatility is a normal part of a healthy investing cycle. Markets don’t move in straight lines—especially during periods of economic recalibration—and temporary setbacks often lay the foundation for future potential gains.
A notable development that has provided some short-term relief is the recently announced 90-day pause on new tariff implementations. This temporary reprieve in trade tensions—particularly between the U.S. and China—has helped calm market jitters and restore some investor confidence, at least for the time being. However, the situation remains fluid. Markets are aware that this is a pause, not a resolution, and the outcome will depend on whether diplomatic progress can be made in the weeks and months ahead. As such, we continue to monitor developments closely, recognizing that headline-driven volatility may remain elevated.
The broader economic picture remains mixed. On one hand, consumer spending is still resilient, unemployment is low, and corporate earnings—while not stellar across the board—have generally exceeded lowered expectations. On the other hand, inflation has proven more persistent than hoped, particularly in areas like services and shelter, which may force the Fed to keep rates higher for longer. As of early May, the Fed is signaling caution—not an imminent pivot to easing, but also not rushing toward more hikes. It’s a holding pattern of sorts, and markets are reacting accordingly.
Meanwhile, other geopolitical tensions—from ongoing conflicts in Eastern Europe and the Middle East to broader questions about global supply chains—continue to add a layer of uncertainty that can shake short-term investor confidence. But history reminds us that markets have weathered far worse, and over time, they adapt and press forward.
Volatility is the Price of Admission
If there’s one timeless truth in investing, it’s that the markets don’t move in straight lines. Even the most enduring bull markets are marked by bouts of volatility. Trying to outguess those twists and turns—jumping in and out of sectors, timing trades based on headlines, or chasing the “hot” asset class—rarely leads to better outcomes. In fact, history shows it often does more harm than good.
That’s why we don’t rely on predictions—we rely on planning. Planning is your anchor in the storm!
A well-constructed financial plan, built around your goals, risk tolerance, and time horizon, is what ultimately drives long-term confidence. It gives you the confidence to stay invested when things feel uncertain. It reminds you that market corrections are not interruptions to your strategy—they are part of the journey.
What Matters Most
It’s easy to get swept up in the noise: talking heads debating rate hikes, charts forecasting the next market “rotation,” or news stories predicting the next recession. But the truth is, none of those things are within your control—and more importantly, none of them are the foundation of your financial well-being.
What is within your control? Your savings rate. Your spending habits. Your investment discipline. The quality of your plan. These are the levers that matter most—and they’re exactly what we focus on together.
So, while it’s important to stay informed, it’s more important not to let short-term headlines shake a long-term strategy. Markets are resilient. They adapt. Innovation continues. Economies expand. Patient investors have the potential to be rewarded not for predicting the future—but for participating in it.
Looking Ahead with Purpose
While no one knows precisely what the months ahead will bring, we remain optimistic about the long-term outlook. The U.S. economy is not without its challenges, but it remains fundamentally strong and dynamic. We continue to see opportunities for growth, innovation, and progress across a wide range of market segments.
Now more than ever, having a valued qualified professional collaborative partner to help navigate uncertainty can make all the difference. At Mercer Partners, we’re here to help you stay centered—on your values, your vision, and your financial future.
As always, thank you for your continued trust and confidence. If you have any questions or would like to revisit your plan in light of recent developments, we’re just a phone call away.
Best,
Nick
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.
