Welcome to our March 2025 Newsletter
Why do many Vermonters put snow tires on their vehicles each winter? Winter tires are an added expense—both in initial cost and annual installation. They take up storage space, can be noisy, and may affect gas mileage. So why use them? For most, the peace of mind that comes with knowing we are prepared for winter conditions outweighs these drawbacks. We can’t predict the timing or severity of winter storms, yet we can prepare ourselves for them, knowing that they are an eventuality of life in Vermont. The same principle applies to investment strategies.
We have worked with each of you to develop an asset allocation suited to your risk tolerance, time horizon, and return objectives. By crafting diversified portfolios with broad industry exposure and regularly rebalancing asset class and security positions, we aim to give you the confidence that your portfolio is ready to ‘weather’ many different market environments. No one can reliably predict when market downturns will begin or end, but we know with certainty that, over time, they will occur periodically. While it is undeniably stressful to ride out these periods, it has been proven time and again that a disciplined, long-term approach consistently outperforms efforts to time the market.
Each downturn is driven by a unique set of factors, and there are several that seem to be contributing to the most recent selloff:
- Uncertainty regarding the short- and long-term impact of tariffs
- Above-average stock market valuations following consecutive years of strong returns
- Concerns about inflation and related Federal Reserve actions
- Market concentration, with an outsized portion of returns being driven by only a few large-cap technology stocks
- Policy shifts and regulatory changes under the current administration
This last point warrants some discussion and perspective.
It is no secret that America has become ever more politically divided. Every election for the last 25 years has been framed as “the most important election of our lifetimes.” In Vermont, only 32% of votes cast were for President Trump (the lowest percentage of all the states by a considerable margin). Given this, it’s understandable that many of you have expressed concerns about what the next four years might bring.
History has shown that there is not a strong link between which party sits in the Oval Office and longer-term market returns. Recent history has been no exception. The stock market saw strong and remarkably similar returns during Donal