Never mind that the government couldn’t tell us whether we had jobs or inflation. The stock market powered straight through October’s data fog. The S&P 500 rose 2.3 percent for the month, the Nasdaq gained 4.7 percent, and the Dow added 2.5 percent, extending multi-month winning streaks for all three indices. Here’s the kicker: they did it while the U.S. Bureau of Labor Statistics posted a notice saying updates had stopped. Meanwhile, Treasury desks dusted off a rarely used TIPS fallback procedure in case the Consumer Price Index couldn’t be published on time — a reminder that markets sometimes must fly by instruments that have not been calibrated in years.

With the federal government shut down since Oct. 1, the U.S. Bureau of Economic Analysis, the BLS and the Census Bureau curtailed most releases, leaving investors to triangulate the economy with private indicators and stale prints. The October jobs report that normally drops the first Friday of the month could not be found. The CPI release got pushed back a week, and there were genuine concerns it might not be published at all if the shutdown persisted. For the first time in memory, the Federal Reserve had to make a rate decision essentially flying blind.

Against this backdrop of uncertainty, the Fed cut rates by 25 basis points to a range of 3.75-4 percent on Oct. 29, although Chair Jerome Powell made it crystal clear that another cut in December “isn’t a foregone conclusion; far from it.” As he said during the press conference: “What do you do if you’re driving in the fog? You slow down.” The vote itself tells you something about the lack of consensus: Stephen Miran wanted a bigger cut while Jeff Schmid wanted no cut at all. That’s what happens when you’re making monetary policy without your speedometer. The Fed also announced it would conclude its balance sheet runoff on Dec. 1, and again purchase maturing Treasurys, effectively halting quantitative tightening. Long yields hovered near 4 percent for much of October before wobbling after Powell’s cautious tone. The market hates uncertainty, but it hates the wrong certainty even more.

While Washington couldn’t count jobs, Big Tech kept counting money. The earnings parade was something to behold, with Amazon’s report serving as the month’s exclamation point. The stock soared nearly 10 percent after the company reported 20 percent year-over-year growth in Amazon Web Services revenues. Amazon said it would spend $125 billion on AI infrastructure this year and maybe more next year. Major tech providers are rapidly monetizing new computing capacity as quickly as possible. The unmet demand for computing power to operate AI models suggests that current capital expenditure investments by these companies are likely to be sound.

The tech giants’ numbers are staggering. Alphabet, Meta, Microsoft and Amazon by the end of 2026 collectively expect to spend over $490 billion on AI and infrastructure investments. To put that in perspective, that’s equivalent to the GDP of Singapore, an Asian economic powerhouse, and more than the GDPs of Greece, Portugal and New Zealand combined. These companies are building the digital infrastructure for a complete transformation of how the world functions, and investors are buying the story wholesale.

Nvidia, riding this wave of unprecedented investment, on Oct. 29 became the first company to close above a $5 trillion market cap. The AI infrastructure boom isn’t slowing down; if anything, it’s accelerating. And it is solidly U.S.-based, although China is nipping at our heels.

Not everything in October was sunshine and semiconductor sales. Jamie Dimon offered a memorable warning after JPMorgan Chase took a $170 million hit from subprime auto lender Tricolor’s bankruptcy: “I probably shouldn’t say this, but when you see one cockroach, there are probably more.” First Brands, a privately owned auto parts supplier, filed for Chapter 11 with as much as $2.3 billion in loans outstanding. These do not appear to be systemic risks yet, but as Dimon noted, “We’ve had a credit bull market since 2010. These are early signs there might be some excess out there.” Private credit has grown from a cottage industry to a $2 trillion market, and nobody really knows what’s lurking in those portfolios.

One of October’s quieter stories was the improvement in market breadth. The equal weight S&P 500 outperformed the cap weighted index for stretches of the month. Cyclicals joined the party, regional banks found their footing despite credit concerns, and the Russell 2000 showed signs of life. When participation broadens, rallies tend to have staying power. This rotation from the narrow leadership that defined much of the year could be healthy, assuming it reflects genuine economic strength rather than just position shuffling. Yet the Magnificent Seven stocks still drive the market, as they represented over 37 percent of the S&P 500’s market cap at the end of October.

The market’s ability to advance through October’s uncertainty is impressive but not unprecedented. Markets are forward-looking machines, and right now they’re looking past the shutdown, past the data drought, and toward an AI-powered future that Big Tech insists will transform everything.

For the long-term investor, October reinforced several timeless principles. Stay diversified across broad U.S. equities, rather than crowding into a handful of winners. October’s breadth improvement is healthy, but don’t chase last month’s winners. The Russell 2000 might be stirring, but small caps remain vulnerable if credit tightens. Focus on quality companies with strong balance sheets, recurring revenues, and robust cash flow generation. When you can’t see the road ahead, you want businesses with proven models and experienced management teams. Consider maintaining a balance between growth-oriented holdings that can benefit from technological transformation and companies with proven steady returns through market cycles.

Most importantly, avoid opacity in your investments. If you don’t understand how a company makes money or how leveraged it is, pass. First Brands had “off balance sheet financing.” Tricolor made subprime auto loans. Neither ended well. In times like these, business model clarity and balance sheet transparency matter more than growth projections or AI promises. Look for companies generating free cash flow today, not just promises of profitability tomorrow.

October proved the market can climb in the dark, but that doesn’t mean you should close your eyes. The data will return, the fog will lift, and those who stayed fully invested in quality equities will be glad they did. History shows that time in the market beats timing the market, and October was just another reminder that the market can surprisingly rise, even when conditions seem uncertain. In a world where one company can be worth $5 trillion, while the government can’t count jobs, the old rules still apply: stay invested in equities, diversify broadly across sectors and market caps, focus on quality businesses with strong cash flows, and keep your lights on to watch for the occasional pothole. After all, sometimes the best visibility comes not from having all the data but from having the discipline to stick to proven principles when the data disappears.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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Most years, the market keeps half an eye on the calendar. Not in 2025. This year, the market tossed the playbook out the window. “Sell in May and go away” arrived right on cue – and was promptly shown the door as May turned into a barn burner, with the S&P up over 6 percent. Summer didn’t lag either. That brings us to September, which historically is the market’s worst month. Instead of the usual pothole, it was a step higher: the S&P 500 rose 3.5 percent, the Nasdaq jumped 5.6 percent, and the Dow gained 1.9 percent – their best Septembers in 15 years.

The turning point came Sept. 17, when Federal Reserve Chair Jerome Powell delivered what the market wanted: a quarter-point rate cut to a range of 4 to 4.25 percent. Think of the Fed as the economy’s thermostat – it nudged the temperature up a notch, because growth has cooled a bit, and the job market isn’t as hot as it was. Lowering rates helps keep the expansion going without letting inflation heat up again. Powell’s message was clear: We’re not panicking, but we’re paying attention. As he put it, “downside risks to employment have risen.”

What Powell didn’t say – but the market heard loud and clear – was that this Fed won’t let the economy stumble into recession on its watch. Not with unemployment edging up to 4.3 percent. Not with job growth slowing to a crawl. The market loves nothing more than a Fed that has its back. Importantly, the Fed didn’t promise a quick sprint to cheaper money. It signaled a careful, step-by-step approach that depends on data. That message – steady hands, no sharp turns – helped markets more than the single cut itself.

Falling 10-year bond yields helped at the margin. When long-term interest rates also eased a bit, that took pressure off stock valuations – especially for companies whose profits are expected to grow for years. You could also see small ripples that affect the average consumer: mortgage rates dipped into the 6.26 to 6.30 percent range in late September. That isn’t exactly free money, but it’s enough to awaken the refinancing crowd. Pending home sales perked up. Sometimes, all it takes is a small rate drop to convince buyers to hop off the fence.

Just as the month was ending, Congress did what it seems to do best these days: fail to agree on anything. The midnight funding deadline came and went on Sept. 30, triggering the U.S. government’s first shutdown in nearly seven years. You’d think Wall Street would panic. Instead, the market yawned and hit new highs. Since 1976, the S&P 500 has averaged no change during government shutdowns. Sometimes the market even rallies, as in 2018, when stocks jumped 10 percent during that 35-day circus.

But this time there’s a wrinkle. The shutdown means no September jobs report, no inflation numbers, no data for a data-dependent Fed. We’re flying blind just when the Fed needs those numbers most. It’s like trying to drive at night with your headlights off. The Fed meeting on Oct. 28-29 could be interesting if this drags on. For now, though, the market is treating it as just another Washington sideshow.

Watch the Fed, not the politicians. The shutdown will end; they always do. Markets expect two more quarter-point cuts this year. If inflation flares up, that could change. If the job market softens further, we might get more. Either way, the Fed is your North Star – not whatever drama is playing out on Capitol Hill.

While politicians played their games, technology marched on. And boy, did it march. This year, companies have been pouring real money into the plumbing behind artificial intelligence – data centers, chips, the software that runs on top of them, and the energy sources that will cool and power them. One careful analysis showed that a small slice of business investment tied to technology accounted for nearly all the economy’s growth in the first half of the year. Take that tech investment out, and growth was close to zero. That tells you where businesses see the best returns – and why growth-oriented stocks beat the old economy parts of the market in September.

The Magnificent Seven tech giants gained about 9 percent in September, while small caps and mid-caps limped along. It reminds us of a baseball team with only a cleanup hitter able to get on base. Sure, the team might win some games, but it’s not sustainable in the long term. Sports teams and markets tend to revert to the mean over time. Rebalance on strength rather than chase performance. And keep some dry powder for when sentiment swings. That’s just common sense in any market.

It helps to understand what’s actually powering this market. When companies are spending real money building real infrastructure for a technology transformation, that is not a bubble but rather a build-out. The last time we saw anything similar was the internet backbone build-out. It paid off handsomely for patient investors.

Experience has shown that the loudest worries rarely cause the biggest problems. Right now, everyone’s wringing their hands about shutdowns, tech concentration, and stretched valuations.  American companies are writing billion-dollar checks for technology infrastructure like it’s 1999 – except this time they’re actually building things that generate cash flow. When businesses spend this kind of money on real equipment and real capabilities, they’re not gambling. They’re positioning for something transformational. And history shows that’s usually when the skeptics get left behind.

This year has been exhibit A for why following old market sayings can cost you money. May was supposed to be when you sell; instead, there was a rally. September was supposed to be terrible, but we just had our best one in 15 years. Fundamentals, not folklore, are driving returns.

Our approach hasn’t changed: participate in the technology transformation through quality companies, but keep enough diversification to sleep at night. The biggest lesson of 2025? The market doesn’t care about the calendar or clever sayings. It cares about earnings, innovation and growth. Everything else is just noise.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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August marched forward with a steady drumbeat of new highs, which was uncharacteristic for the month historically, and therefore a surprise to many investors. The S&P 500 rose 1.9 percent for the month, which included setting fresh records in the final stretch, including the S&P’s 20th record close of the year on Aug. 28. The Dow added 3.2 percent in August, and the Nasdaq gained 1.6 percent. The Nasdaq’s poorer performance was mostly weighed down by profit-taking in the semiconductor sector, after Nvidia’s blowout quarter of AI semiconductor chip sales failed to meet the market’s increasingly lofty expectations. Sometimes good news just isn’t good enough when stocks are priced for perfection.

Speaking of perfection, gold decided to join the party in earnest. The “barbarous relic,” as renowned economist John Maynard Keynes called it, touched $3,533 per ounce on Sept. 2, making fresh all-time highs as investors sought refuge from an increasingly uncertain world. When the 30-year Treasury bond flirts with 5 percent (as it did in early September) and questions swirl about central bank independence, even traditionalists start eyeing alternatives. Gold’s 42 percent year-to-date surge tells you everything you need to know about diminishing confidence in paper currencies, including in the world’s reserve currency, the U.S. dollar.

Never mind that gold pays no dividend, costs money to store, and has historically been a lousy investment over long periods. In uncertain times like these, it’s sometimes about return of capital rather than return on capital. When investors pay up for ballast during an equity rally, one should pay attention.

Under the surface, market breadth improved. Small caps finally showed some spark, with the Russell 2000 up about 7 percent in August, as investors looked for alternatives to the increasing price to earnings multiples of large cap growth stocks. That broadening mattered on days when AI hardware leaders slipped; it kept the tape resilient even as high-expectation names took a breather.

Nevertheless, market leadership still hinged on AI infrastructure. Nvidia’s $4 trillion in market value milestone reached in July set the tone coming into August. The market’s growth pulse held up enough, even as tech leadership wobbled on the last trading day of August.  The backdrop for markets making new highs has been earnings doing the lifting and continued confirmation of massive AI capital spending, not just multiple expansion. Around month-end, however, a mixed read-through from AI-linked earnings began to impact much of the tech sector, resulting in a tech sell-off on the first trading day after the Labor Day weekend. The lesson is as old as the tape: when expectations tower, even good news can be “not good enough.”

Rates, meanwhile, reminded everyone they’re still a main character in the valuation chapter, since they offer investors an alternative to cash and equities. The U.S. 30-year Treasury bond yield pushed toward 5 percent to start September, amid a heavy calendar of new issues to fund deficits and a global bond selloff related to concerns about U.S. Federal Reserve independence. When the long bond flirts with 5 percent, dependable cash flows matter more to traders and investors, and narratives about company growth prospects, less, often resulting in a rotation out of stocks and into bonds. Such a rotation brings money out of equities, lowering their prices, which then results in bond yields coming down, and a cycling back into equities as their returns again look more attractive. All asset classes continue to be fed by years of expansionary fiscal and monetary policies, fueling an excess supply of global liquidity.

The Federal Reserve’s annual late August retreat in Jackson Hole, Wyoming, typically offers global central bankers a chance to pontificate about esoteric monetary policy while enjoying some fly fishing. This year, it turned into political theater. A weaker than previously reported jobs report had led to the unprecedented firing of the head of the Bureau of Labor Statistics. In part due to this revised data, Federal Reserve Chair Jerome Powell signaled that rate cuts might finally be on the horizon, suggesting “the time has come for policy to adjust.” The market loved it, with the S&P jumping 1.5 percent that day. But the celebration was soon tempered by relentless political pressure on the Fed.

Which brings us to the latest elephant in the room: the attempt to remove Fed Governor Lisa Cook. President Trump’s move to fire Cook over unsubstantiated mortgage fraud allegations represents the first such attempt by a president to manipulate the Board of Governors in the Fed’s 111-year history. Cook, for her part, isn’t going quietly. She is suing to keep her job, arguing that unproven allegations don’t constitute “cause” for removal under the Federal Reserve Act. As this column is being written, the matter is tied up in the courts, where it belongs.

The markets have absorbed plenty of political theater this year, but this takes the cake. The Federal Reserve’s independence isn’t just some quaint tradition; it’s the bedrock of a sound global monetary system. Uncertainty about possible political manipulation of the debt markets, interest rates, the value of the U.S. dollar and liquidity caused global investors to start to look for alternative investments to U.S. Treasuries. And nervous markets are volatile markets.

The whole episode reminds one of another axiom: the market hates uncertainty. And in this situation, markets have uncertainty in spades.

With all this drama, you might think it’s time to head for the exits. Not so fast. Yes, we’re in uncharted territory with record valuations, political interference in monetary policy, and geopolitical tensions that would make a Cold War diplomat nervous. But that’s precisely when discipline matters most. The market has climbed a wall of worry for 16 years now, through pandemics, wars, banking crises, and more political drama than Shakespeare could have imagined. Those who stayed the course have been rewarded. Those who tried to time the market based on headlines have mostly been wrong.

The advice in this column remains boringly consistent: maintain a diversified portfolio of quality companies with strong balance sheets and sustainable competitive advantages. Volatile markets always provide opportunities. And don’t let politics drive your investment decisions. Markets do not move in straight lines, but they have rewarded discipline and time invested.

As for gold hitting new highs? Sure, it’s nice to see the gold bugs finally having their day. But remember, over the long term, stocks in growing, cash generating companies have trounced gold by a wide margin.

The road ahead will be bumpy. Between Fed independence under assault, valuations stretched, numerous and growing court challenges to White House edicts and a year of special elections promising more fireworks than the Fourth of July, volatility is virtually guaranteed. But volatility is the price we pay for long-term returns.

Stay invested. Stay diversified. The market will do what it does, regardless of what any of us think about it or politics. Excess global liquidity is still spiking the punch bowl. Our job is to stay the course and take advantage of opportunities when the market serves them up.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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Remember musical chairs? Everyone circles nervously as the music plays, but when it stops, someone is inevitably left without a chair. July’s market felt similar — investors circled cautiously, unsure when the music might stop, and wondered if they would have a seat when it did.

July confounded investors with conflicting signals. Yet the S&P 500 rose 2.17 percent for the month, pushing its year-to-date return to 7.78 percent. The Dow Jones Industrial Average saw a modest gain of 0.08 percent, while the tech-heavy Nasdaq advanced steadily. In July, the S&P 500 managed its 14th record close for the year, highlighting investors’ continued optimism in the economy and their confidence that the Fed would eventually cut rates.

After the relentless climb in stock prices throughout July, on the first day of August, employment data sent a clear warning signal, and the market retreated over 3 percent from its recent highs. That day, the Bureau of Labor Statistics (BLS) reported that total nonfarm payroll employment increased by only 73,000 in July. The agency also significantly revised earlier figures downward; June’s payroll number was adjusted sharply downward from 147,000, while May’s total plummeted by 125,000 to just 19,000. In addition, the unemployment rate edged slightly upward from 4.1 to 4.2 percent, average weeks unemployed increased modestly to 24.1 — the highest level since April 2022 — and the number of long-term unemployed individuals rose to 1.82 million.

However, ADP’s subsequent employment report struck a more optimistic tone, stating that its hiring and pay data continue to be broadly indicative of a healthy economy, with strong job gains in leisure, financial, and construction sectors. Job losses were in health and education. ADP is a payroll processing firm that captures actual weekly payroll data for more than 25 million U.S. private-sector employees. The data suggests that the labor market may have underlying strength despite the recent BLS report, which has a much greater lag in its survey data results.

The Federal Reserve, in its July meeting just prior to the employment data reports being released, chose to hold rates steady. Fed Chair Jerome Powell maintained a hawkish tone despite pressure from the White House for rate cuts. Markets reacted negatively; the Dow Jones Industrial Average dropped more than 600 points following Powell’s comments, reflecting investors’ disappointment.

Powell’s dilemma is akin to threading a needle with boxing gloves — attempting to control stubborn inflation without pushing the economy into recession. Lowering rates too early risks reigniting inflation; acting too late could deepen an economic downturn.

Second-quarter GDP rose by 2.8 percent annualized, appearing healthy on the surface. However, a significant portion of that growth was due to a notable decline in imports, likely due to the tariff impacts. GDP calculations subtract imports from exports, meaning fewer imports artificially inflate GDP figures, even if domestic spending remains stagnant. It is like seeing your bank balance grow because you’ve stopped shopping — not because your income has increased.

Consumer spending, which accounts for roughly 70 percent of U.S. economic activity, grew at its slowest pace in over two years, rising at an annualized rate in the second quarter of just 1.4 percent. Strip away the impact of declining imports, and the underlying growth rate shrinks closer to 1 percent, aligning with Goldman Sachs’ cautious forecasts for the remainder of the year.

Tariff uncertainties intensified market volatility, particularly as the Aug. 1 tariff deadline approached. Investor sentiment cratered that day, as two fresh shocks landed simultaneously: the much weaker-than-expected July jobs report and the Trump administration’s unveiling of sweeping new tariffs — ranging from 10 percent to over 40 percent on imports from countries including Canada, India, Taiwan, and Brazil — slated to take effect Aug. 7. These broad-brush tariffs reignited fears of inflation pressure and global trade disruptions. Despite these challenges, corporate earnings thus far have continued to meet or exceed targets, suggesting underlying strength even amid political headwinds.

Markets have historically shown resilience through periods of uncertainty, and today’s landscape, which is marked by trade tensions, moderate employment growth, and a Federal Reserve carefully balancing inflation and full employment, is no different. While caution is warranted, it is equally important to remember the underlying strength and adaptability of the U.S. economy and the enormous amounts of global capital that must be deployed into financial assets, suggesting that patient investors can navigate these times successfully. Technology remains a driver of productivity, particularly through AI developments. Additionally, traditional sectors benefiting from reshoring and infrastructure spending should not be overlooked.

As we move into the often volatile late-summer and early fall months, investors should stay invested but be prepared for turbulence. Keep your portfolio balanced and your holdings diversified, emphasize quality investments across sectors, and maintain a clear view of your objectives. The music might change tempo, and the chairs might be pulled out from under you from time to time, but steady engagement remains the prudent choice for the long-term investor.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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June delivered a pleasant surprise for investors who were bracing for the traditional summer doldrums. Instead of “selling in May and going away,” those who stayed invested were handsomely rewarded. The S&P 500 gained a robust 4.96 percent in June, while the tech-heavy Nasdaq surged 6.6 percent, and even the staid Dow Jones Industrial Average climbed 4.32 percent. The S&P 500 posted gains on 13 of its 20 trading days, and nine of the 11 sectors finished higher.

Never mind that we started the year with tariff tantrums and trade wars; the second quarter of 2025 was a master class for investors in why to look beyond the headlines. Liberation Day hit early in the quarter, sending markets into a tailspin. The S&P 500 plunged 15 percent from its high point. Panic selling reached fever pitch. Billions fled to money markets. The financial press declared the bull market dead. Yet by quarter’s end, stocks posted the best quarterly close since 2023, with the S&P up over 10 percent. From those April lows to June’s close, the index surged 24 percent, all within a single quarter.

Here is what the headline writers missed during this chaotic time: Corporate earnings kept growing, particularly in technology. Announced tariffs were postponed or reduced. The recession everyone predicted for Q2 did not arrive. And slowly, methodically, all that sidelined cash started creeping back into equities. As Warren Buffett likes to say, “Be fearful when others are greedy, and greedy when others are fearful.” Nothing attracts money like a rising market.

In June, 147,000 jobs were added, right in line with recent averages but below the 250,000 needed to absorb new workers. The unemployment rate ticked up slightly to 4.1 percent, though it has been remarkably stable in the 4.0-4.2 percent range for over a year. Noteworthy was the increase in long-term unemployment, which was up 190,000 to 1.6 million. That’s a yellow flag worth watching.

Stable employment and inflation numbers allowed the Federal Reserve to continue its delicate dance. At the June 18 meeting, board members held rates steady at 4.25-4.50 percent, with Chairman Powell maintaining his “data dependent” mantra. However, the Fed’s own projections show the group expects inflation to rise to 3 percent this year — higher than its 2 percent target. Meanwhile, unemployment could climb to 4.5 percent. That’s what economists call signs of stagflation, and it’s about as welcome as a skunk at a garden party.

Geopolitical tensions flared on June 13 when Israeli air strikes against Iran sent oil prices surging nearly 10 percent and the Dow tumbling more than 700 points. Iran’s threat to close the Strait of Hormuz (through which 20 percent of the world’s oil flows) reminded investors why diversification matters. Yet the market shrugged off this risk within days, proving once again that geopolitical tremors, while unsettling, rarely derail long-term trends. When the U.S. joined in with air strikes on Iranian nuclear facilities on June 21, the stock and oil markets stabilized further, seeming to have already priced in this likely action. Subsequently, stocks have continued their upward trajectory, with investors more focused on the continued frenzied activity in AI-related investments than on tariffs, geopolitical problems or interest rates.

In early July, Congress passed sweeping fiscal legislation combining tax cuts, defense spending increases, and expanded social programs. The Congressional Budget Office estimates it will increase deficits by $3 trillion to $4 trillion over 10 years. The bond market yawned … for now. But remember, as Senator Everett Dirksen once said, “A billion here, a billion there, and pretty soon you’re talking real money.”

What’s an investor to do? The same thing as always counseled in this column: stay invested, stay diversified, and stay patient. Markets have historically trended upward over time, despite wars, pandemics, political upheaval, and pundits predicting doom. This quarter’s dramatic recovery from April’s lows reinforces the timeless wisdom: those who stay invested get rewarded. This quarter proved the point beautifully.

Headwinds remain: rising unemployment, stubborn inflation, geopolitical tensions and a Federal Reserve trying to thread the needle. But when hasn’t the market faced challenges? As we head into the traditionally weak summer months, remember that seasonal patterns are about as reliable as an umbrella-free Rose Festival. This June proved that emphatically.

The second quarter of 2025 was the entire market cycle compressed into three months: panic, despair, recovery, and new highs. It’s the perfect reminder that the worst thing you can do is let fear drive your investment decisions.

Stay invested. Stay diversified. And as a long-term investor, do not check your portfolio every day. It’s summer, after all.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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May turned out to be one of those months that reminded investors why the market hates uncertainty — and then proceeds to rally anyway. The S&P 500 surged 6.2 percent, the Nasdaq climbed 9.6 percent, and even the Dow managed a respectable 3.9 percent gain. Between April 8 and May 5, the size of the gain (17 percent) in the S&P 500 has occurred in such a short period only six times in the past 75 years, according to Birinyi Associates. The entire month was the best May performance for equities since 1990.

The month’s defining moment came on May 29, when a federal trade court struck down President Trump’s sweeping tariffs. Markets rallied. Then, within hours, an appeals court put the ruling on hold. The tariffs were back. So was the confusion. Companies that had spent months adjusting to the new trade rules were back to square one.

This kind of policy reversal would have been extraordinary a generation ago. Now it is becoming routine. Companies are spending more time with trade lawyers than with their customers. The regulatory burden has become so complex that businesses are shifting resources away from innovation and growth just to navigate the compliance maze.

Yet somehow, consumers kept spending. Discretionary purchases held steady in May, suggesting that Americans are either adapting to the policy chaos or accelerating their purchases ahead of tariffs. Manufacturing orders showed artificial strength as companies built inventories, not because demand was growing, but because they feared higher import costs down the road. Employment numbers remained strong, although data emerging in early June indicates there is some softening.

At the end of the month, Jamie Dimon made headlines with his stark warning about the policy chaos causing an existential threat to the U.S. bond market. “You are going to see a crack in the bond market,” he told investors at the Reagan National Economic Forum. “It is going to happen.” Ten-year U.S. Treasury yields had already shot up to 4.42 percent during the month after a weak auction and growing fears about the proposed “Big Beautiful Bill” — a spending package that could add $3 trillion to $5 trillion to the national debt. Moody’s responded by stripping the U.S. of its triple-A credit rating. When Dimon says “this time is different,” people listen. They should. The man who was instrumental in mitigating the 2008 financial crisis isn’t known for crying wolf: “If we are not the preeminent economy and preeminent military in forty years, we will not be the reserve currency.”

A bond market meltdown is not likely imminent, barring a repeat of Liberation Day or similar policy missteps. But there will eventually be a day of reckoning. Some would say there is already at least a 75 basis points premium (an embedded “tax”) in interest rates, including for consumer mortgages, reflecting the premium over similarly rated credits required to entice investors to buy long dated U.S. debt.

While policy makers created chaos and bond investors grew nervous, corporate America quietly did what it does best: adapted and earned money. Technology companies continued to benefit from the AI investment boom. Health-care stocks held steady as much of the sector proved relatively immune to trade disruptions. Even some industrial companies posted solid numbers despite the tariff uncertainty.

Dimon pointed out there’s “an extraordinary amount of complacency” in the markets given the trade chaos. Yet that complacency might have been exactly what allowed the rally to happen. Sometimes the market’s ability to shrug off obvious danger becomes its greatest strength.

The investor psychology was telling. If April was about fear, May was about regret. Many investors admitted they were still sitting in cash, not because they thought the market would crash, but because they were paralyzed by the daily policy reversals. It wasn’t fear of missing out — it was fear of getting back in.

This is not the kind of market that rewards quick decisions or headline chasing. It’s precisely the kind of market that rewards patience and diversification. The basic principles haven’t changed, even if the daily drama has intensified.

As Will Rogers once said, “Even if you’re on the right track, you’ll get run over if you just sit there.” The right track, in this case, is staying invested. To avoid getting run over, diversify your holdings, focus on companies with strong cash flow and balance sheets, and resist the urge to make wholesale changes based on the latest Washington headlines. The fundamentals — corporate earnings and economic data — are still there for those willing to look past the noise. Those who did run for the hills when the news continued to confuse missed the extraordinary gains of May.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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April 2025 was a month that reminds us why investing requires a strong stomach. President Trump’s “Liberation Day” tariffs on April 2 set off the worst four-day stock market slide since the 2008 financial crisis. Then, in a dramatic reversal on April 9, we saw the biggest single-day point gains in history for the Dow, S&P 500, and Nasdaq, as the tariff implementation date received a 90-day reprieve, largely to forestall an imminent meltdown in the U.S. Treasury market.

By May 2, markets had strung together nine consecutive winning days – the longest streak since 2004. The Nasdaq and S&P 500 had recovered their tariff-induced Liberation Day losses. Yet a significant percentage of stocks remain 20 percent below their 52-week highs.

On April 21, the dollar hit its lowest level since March 2022 due to concerns about Trump removing Jerome Powell as Fed Chair. With this backdrop, foreign investors continued the sale of U.S. assets that Liberation Day had precipitated.

For decades, the world has been saving and the U.S. spending, with those savings funding our deficits in the form of purchases of U.S. Treasurys. The resulting demand for our bonds results in low borrowing rates for the Treasury. The announcement of draconian tariffs on April 2 signaled a shift by the U.S. to a multipolar world that would make U.S. investments less attractive, resulting in a massive global repositioning to reduce exposure to U.S. assets. Additionally, oil prices registered a dramatic decline of 15 percent in April, as measured by Brent crude, reflecting reduced global demand, fears of recession and increased supply from Russia and Saudi Arabia.

Aside from geopolitical moves, today’s markets are more volatile on a daily basis than even a few years ago due to the continued rise of algorithmic trading systems. These often result in forced selling from risk models, which in the equity markets have been facilitated by the rise in stock ETFs and other forms of passive investing.

Zero-day equity options trading is amplifying daily swings. This is the buying and selling of options contracts that expire the same day they are traded. These have surged in popularity recently using major indices like the S&P 500. They are highly leveraged financial instruments, speculating on price moves that occur within hours or even minutes and so are contributing to sharp intraday market moves. As an example, on April 8, the S&P 500 surged 8.3 percent in 34 minutes, and on April 9, the index opened up 4 percent but closed down 3 percent for its largest intraday point swing (532.91 points) in history.

In the vast U.S. Treasury market, the “Basis Trade” is adding systemic risk and volatility as did the “Yen Carry Trade,” which sent markets reeling in August 2024. Volatility can strike faster and harder than before as it did in early April, when these systemic risk events of unwinding excessive leverage tied to interest rate differentials impacted the U.S. Treasury market, further impacting equity markets.

Addressing concerns that lie beyond the trading floors, Ryan Petersen, CEO of logistics firm Flexport, reports that ocean freight bookings from China to the U.S. have dropped 60 percent since the tariffs took effect. Companies typically order goods 90 days before shipment. For Christmas, when retailers book most of the profits that support their businesses the rest of the year, orders are placed six months or more in advance. When tariffs hit suddenly, the economics of already-ordered goods turns upside down.

Container shipping lines are canceling voyages and downsizing vessels. The Port of Los Angeles, the busiest container port in the U.S., expects a 35 percent decline in shipments from Asia. China represents 45 percent of the port’s trade. The Port of Los Angeles and its neighbor, the Port of San Pedro, account for 30 percent of all U.S. containerized imports. For small businesses operating on thin margins, these supply chain disruptions could be catastrophic. Many face impossible choices: absorb costs they can’t afford, raise prices and risk losing customers, or scramble to find new suppliers.

The impact on small businesses cannot be overstated. Unlike larger corporations with diverse supplier networks and financial cushions, small enterprises often rely on single suppliers and operate on 30-to-60-day cash cycles. A 25 percent tariff can instantly transform a profitable order into a loss-maker. Many small business owners describe feeling blindsided – they built their businesses on stable trade relationships that changed overnight. Small businesses historically have been the biggest employment drivers in the U.S. According to the Small Business Association, small businesses have been responsible for an impressive 61 percent of all net new job creation from 1995 to 2023.

Apollo Global Management’s research shows consumer sentiment has fallen to near-record lows. Businesses are cutting capital expenditure plans and revising earnings forecasts downward. Adding to the uncertainty, we haven’t yet seen the full impact of the workforce reductions related to the Department of Government Efficiency. These employment statistics typically lag by several months.

We’re witnessing something unprecedented – market volatility and consumer pessimism driven almost entirely by self-inflicted policy decisions. While recent negotiations have sparked optimism about agreements with some trading partners, China remains the elephant in the room. Given the complexity of U.S.-China trade relationships and China’s need to “save face,” resolution could take months or even years.

So, what should investors do? First, remember that market corrections are normal. Since 1928, the S&P has weathered 14 bear markets, yet its long-term trajectory remains decidedly upward. Missing just a handful of the best trading days can severely impact long-term returns.

The recent nine-day rally demonstrates why staying invested matters. Markets often recover when least expected, and those who sold during the April turbulence missed this substantial rebound.

While the tariff situation creates real challenges for businesses, particularly smaller ones, the underlying U.S. economy has fundamental strengths: Interest rates remain at reasonable levels, corporate balance sheets are generally healthy, and innovation continues apace. Large tech companies reported in the first few days of May that their spending on AI infrastructure remains unabated. Lower prices at the gas pump will help offset tariff-induced inflation for other consumer goods.

For long-term investors in individual stocks, periods of volatility often create opportunities. Diversification remains essential – not all sectors react equally to trade disruptions. History suggests that patience typically rewards investors better than attempts to time market swings. Stay disciplined, stay diversified, and remember that time in the market has been a reliable driver of investment returns.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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After a strong start to the year, equity markets hit major turbulence in March, mirroring the unexpected upsets in the annual college basketball tournaments known as “March Madness.” New trade policies introduced by the Trump administration rattled investors. The S&P 500 fell 6 percent, the Nasdaq dropped 8.5 percent, and the Dow Jones Industrial Average slipped 4.3 percent for the month. Then the S&P 500, a broad market measure, dropped another 11 percent in the first week and a half of April. On April 2, “Liberation Day,” Trump announced tariffs on our primary trading partners, and the draconian measures were speedily matched in angry retaliation.

The market downturn was in response to the administration’s announcement of these sweeping new tariffs under the banner of “reciprocity.” The explanation was that they were designed to narrow America’s trade deficits with various trading partners, irrespective of whether those countries were charging high import tariffs. Markets, which dislike uncertainty, reacted predictably by repricing stocks lower, thereby reducing risk in an environment where global trade relationships are being rewritten.

Consider the humble coffee maker. When a 25 percent tariff hits imported kitchen appliances, the $80 wholesale cost to your local retailer suddenly jumps to $100. The retail cost then increases from $120 to perhaps $134. But the story doesn’t end there.

The coffee maker company, facing declining sales, cuts costs to survive. It delays developing the new model and cancels the expansion of its distribution center, putting 50 new jobs on hold indefinitely. Meanwhile, companies that make complementary products – specialty coffee, filters, cleaning supplies – see their sales decline. Even the trucking companies that transport these goods see a reduced shipping volume.

Now multiply this scenario across thousands of products. When manufacturers face higher costs for imported steel, circuit boards, textiles, or plastics, they must adjust or perish. As domestic producers face less foreign competition, they too often raise prices, creating a second wave of inflation. Consumers, meanwhile, pay more for everyday necessities, leaving less for discretionary spending that drives economic growth. This is how a tariff transforms into a hidden inflation multiplier that works its way through every corner of the economy.

The scenario worsens when trading partners retaliate. When China places tariffs on American agricultural products, for example, farmers lose critical export markets and face plummeting commodity prices. Washington, D.C. then provides more financial support for farmers, increasing the deficit, which raises borrowing costs for the U.S. Treasury, further fueling inflation.

Companies that attempt to relocate production to the U.S. to avoid tariffs face their own challenges — higher labor costs, regulatory compliance expenses, and the massive capital investment required to build new facilities. The entire process creates a cascading effect of price increases, decreased corporate investment, and increased unemployment – all resulting in the reduction in the value of real and financial assets, including cash.

We’ve seen this scenario before. The Smoot-Hawley Tariff Act of 1930 raised duties on thousands of imported goods, ostensibly to protect American jobs. History shows it worsened the Great Depression and dramatically shrank global trade. The lesson remains applicable today: policies intended to protect domestic industries often have unintended consequences that ripple throughout the economy.

Financial leaders have expressed concern about the potential economic impact. JPMorgan Chase CEO Jamie Dimon warned shareholders that current trade policies risk pushing the U.S. into a recession, with his bank raising global recession probability to 60 percent. Goldman Sachs also increased its recession odds to 35 percent and reduced its 2025 U.S. GDP growth forecast to just 1 percent. Apparently, these concerns and the imminent breakdown of bond markets got President Trump’s attention enough so that on April 9, he backed down on the timing of implementing the tariff increases announced on April 2. The stock market rebounded, clocking the highest one-day point increases ever in the U.S. stock indexes.

The Federal Reserve finds itself in a difficult position. Fed Chair Jerome Powell expressed concern about the inflationary effects of tariffs but maintained a wait-and-see approach at the March meeting. The Fed left interest rates unchanged, recognizing that raising rates in a slowing economy could exacerbate problems.

Despite chaos in the stock and bond markets, through March the real economy showed resilience. The U.S. added 228,000 jobs in March, with notable gains in health care, construction, and hospitality sectors. The unemployment rate ticked up slightly to 4.2 percent. While manufacturing activity contracted and consumer confidence dipped, household spending remained relatively robust. However, this data did not account for the effects of tariffs announced on April 2.

What does this mean for investors? First, prepare for unprecedented volatility as financial markets adjust to unpredictable trade policies and international retaliation. Second, recognize that inflation stemming from tariffs may limit the Fed’s ability to provide monetary support if economic conditions deteriorate. Third, the White House is embarking on a strategy of de-globalization, which will create both challenges and opportunities.

This is not a call to retreat from stocks but rather a reminder to focus on companies with pricing power, strong balance sheets, and supply chains that are relatively insulated from geopolitical shocks. History shows that, long term, the U.S, equity markets have maintained an upward trajectory through wars and recessions, even as the path can be gut-wrenching at times.

Back in March 2017, I wrote a column titled “Will the market crash or correct or continue to rise?” At that time, as now, investors were concerned about market direction amid uncertainty. I reminded readers then that “the long-term trajectory of the stock market is up and to the right on a graph. On an annual basis, the market rises about 75 percent of the time.” I advised you to “keep your eye on the horizon” because politics, while impactful, have not fundamentally altered the long-term path of equities. Those words remain as relevant today as they were eight years ago.

The market has indeed survived various administrations, policy shifts, wars, recessions and global pandemics. Despite inflation concerns from tariffs, history shows that U.S. equities have consistently outpaced inflation over long periods, protecting and growing purchasing power when other asset classes like bonds and cash have failed to do so. Investors who maintain a long-term perspective, diversify across sectors and regions, and avoid the costly mistake of market timing will be best positioned to navigate these turbulent waters.

The U.S. economy has proven remarkably adaptive throughout its history. Innovation does not stop because of tariffs, and American businesses have demonstrated resilience through numerous economic and policy shifts. While current policies present significant headwinds, the fundamental strengths of the U.S. remain intact.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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February, historically a challenging month for investors, lived up to its reputation this year. After a strong start in January fueled by AI enthusiasm and recovery hopes, equity markets retreated as consumer confidence deteriorated with mounting policy uncertainties.

The S&P 500 finished February down 1.4 percent, the Dow Jones Industrial Average fell 1.6 percent, and the tech-heavy Nasdaq dropped 4 percent – its worst monthly performance since April 2024. This pullback came despite economic fundamentals that, on the surface, still appear relatively stable.

The U.S. economy expanded at a 2.3 percent annual rate in the fourth quarter of 2024, continuing the moderate but steady growth that has characterized the post-pandemic recovery. The unemployment rate held at 4 percent, essentially full employment, and job creation continued at a modest pace. Inflation, while still above the Federal Reserve’s target, showed signs of stabilizing, giving policymakers encouragement to consider rate reductions later this year.

As the policies of the new administration in Washington, D.C., began to take concrete shape, the Conference Board’s Consumer Confidence Index in February recorded its steepest drop – 6.7 percent – in over three years. This decline wasn’t limited to future expectations – confidence in present economic conditions also weakened.

This sentiment shift manifested in retail performance, with Walmart reporting its guidance for the remainder of the year below expectations, citing weakness in discretionary spending. Higher prices continue to strain household budgets. While wages have risen, they haven’t kept pace with the increased costs of necessities. The rapid rise in egg prices due to the bird flu epidemic was a headline grabber in this regard. For investors, the decline in consumer optimism signals potential trouble for consumer spending, which accounts for nearly 70 percent of U.S. GDP.

Adding to market unease were renewed trade policy concerns. The Trump administration’s proclamations regarding 25 percent tariffs on goods from Mexico, Canada, and additions to the 10 percent already directed toward Chinese goods, created uncertainty for businesses reliant on global supply chains. Markets, which had largely shrugged off trade tensions in previous months, reacted with greater sensitivity this time. Companies dependent on imported goods saw stock prices slide as investors questioned the long-term impact of higher import costs.

Bond yields reflected growing economic caution, with the 10-year Treasury yield declining for five consecutive sessions to its lowest level in nearly three months. This movement in fixed-income markets often signals investor concerns about future economic growth.

February’s market behavior exemplifies that sentiment often drives short-term stock market volatility more than hard data. There is a divergence between relatively solid economic fundamentals and growing anxiety among consumers and businesses. The stock market doesn’t trade on today’s economy – it trades on expectations for the future. And currently, those expectations are clouded by uncertainty, which markets intensely dislike.

Adding to market concerns are the ongoing changes in federal government staffing and operations. The Department of Government Efficiency’s aggressive efforts to eliminate USAID, reduce federal employment and cut costs across agencies represent a significant shift that will have broader economic implications. Government purchases of agricultural products for foreign aid and federal employment have historically been stabilizing economic forces during downturns. These reductions, while potentially improving long-term fiscal health, may create short-term economic headwinds as thousands of workers apply for unemployment, attempt to transition to the private sector, and government contracts are scaled back.

Despite February’s pullback, the broader context remains one of exceptional recent performance. The stock market delivered gains exceeding 20 percent in each of the past two years, well above the long-term historical average of approximately 9 percent annually. Even with February’s decline, by the end of the month, the S&P 500 remained essentially flat for 2025 year-to-date. The recent volatility may represent a healthy recalibration rather than the beginning of a prolonged downturn … unless there are major policy missteps.

Looking ahead, it remains to be seen if weak retail sales in the first two months of the year were primarily impacted by the exceptionally cold weather in January and February. If sentiment remains low and retail sales show further signs of strain, corporate earnings estimates may need downward revision, adding pressure to equity valuations. At the same time, clarity on trade policy or potential interest rate adjustments could help stabilize market expectations.

The Federal Reserve is in a delicate position, balancing inflation management with the need to prevent an economic slowdown. A rate cut might provide a short-term boost to stocks, but only if seen as a proactive measure rather than as a reaction to deteriorating conditions.

In this environment, investors should focus on fundamentals. Defensive sectors such as health care and consumer staples may provide some insulation against volatility. Companies with strong cash flows and pricing power are also better positioned to weather economic uncertainty. If you have conviction in a company’s growth prospects and competitive position, you should stick with it during periods of volatility. Day-to-day fluctuations in stock prices are unpredictable and often disconnected from a company’s actual performance. Algorithmic trading, options trading and rebalancing of large ETFs and funds add to daily volatility. Long-term investors should resist making reactionary moves based on headlines and sentiment shifts. Market corrections and rebounds are part of the investment cycle.

History has shown that markets often overreact to uncertainty in the short term, but fundamentals drive performance over time. As Warren Buffett famously advised, “be fearful when others are greedy and greedy when others are fearful.” Whether February’s downturn marks a temporary reset or signals a more significant shift in market dynamics will become clearer in the months ahead. In the meantime, patience, discipline, and a focus on long-term fundamentals remain the best approach to navigating an uncertain market.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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An old market adage is: “As January goes, so goes the year.” If that holds true, 2025 could prove interesting indeed. The S&P 500 advanced 2.7 percent for the month, and the Dow Jones posted an even more impressive 4.7 percent increase. The tech-heavy Nasdaq managed to climb 1.6 percent, although not without some drama along the way.

The Federal Reserve, as expected, kept rates steady in January. Chairman Jerome Powell, in his typically measured way, emphasized that the Fed would remain “data dependent,” while monitoring inflation and growth. The market seemed to accept this stance, at least for now. And jobs and inflation numbers reported for January did not cause the market to believe that there would be any near-term change. Economists, including those at Goldman Sachs, who had been predicting three rate cuts for 2025 as recently as December, have, for the most part, tempered those calls to possibly one cut. As we have seen before, the Fed’s patience can wear thin when inflation signals appear, which could well happen with labor shortages and the cascade of new tariff announcements.

The tech sector hit major turbulence in January when DeepSeek, a Chinese startup, announced it had built an AI model that matches those of industry leaders at a fraction of the cost. Never mind that innovation drives technology forward – traders hit the panic button. Nvidia, the U.S. AI and GPU semiconductor chip leader, with its 80 percent market share in discrete GPUs (graphics processing units) and near dominance in data center GPUs, dropped 17 percent – its worst decline since October 2023. This was the largest market capitalization decline in the history of the U.S. stock market. Wall Street traders were spooked by the possibility that more efficient AI might mean less demand for expensive processors, and thus a potential contraction in capital expenditures for large language model data centers.

But here’s where a bit of economic history comes in handy. When cars became more fuel efficient, did we end up using less gasoline? Quite the opposite. As driving became cheaper, people simply drove more, pushing total fuel consumption higher. Economists, observing trends dating back to the Industrial Revolution, call this the Jevons Paradox – make something more efficient, and people will use more of it, not less. Microsoft CEO Satya Nadella made exactly this point about AI, noting that as it becomes more efficient and accessible, its use will likely skyrocket.

He’s probably right. Microsoft, Google and Meta have announced that they are not scaling back their AI investments – but rather doubling down. The market’s knee-jerk reaction to DeepSeek looks increasingly shortsighted. Cheaper, more efficient AI won’t reduce demand for computing power any more than fuel-efficient cars reduced our appetite for gasoline. If anything, it will accelerate adoption and drive demand even higher.

Then, on the last day of January, came the president’s tariff bombshell: a 25 percent tariff on Canadian and Mexican goods and a 10 percent hit on Chinese imports. Tariffs raise concerns about inflationary pressures and supply chain disruptions. The market typically doesn’t like trade wars and their associated uncertainty. A moving target of tariffs makes it impossible for businesses to plan since they are not able to judge demand, due to higher prices, or costs, due to retaliatory tariffs. Uncertainty about making business investments usually results in lagging economic activity.

The IMF projects annual global growth at 3.3 percent for both 2025 and 2026. That isn’t stellar by historical standards, but not bad considering the headwinds from war, trade disruptions, declining demand from China, ballooning sovereign debt and more. The broader economic picture, including employment and wages, remains resilient, though consumer confidence bears watching as the higher systemic costs of curbing labor mobility (i.e., reduced immigration) and the new tariffs work through the system into higher prices for services and goods.

Through all these crosscurrents, the stock market continues to find its footing. Market sectors are rotating in and out of favor as these policies play out, making stock selection more critical than ever. For those who can look past the headlines, solid companies with strong fundamentals still offer plenty of investment potential. Markets have survived trade wars, tech bubbles, and policy shifts before. And the White House’s current occupant closely follows the stock market reaction to his policies and, thus far, has adapted accordingly.

For investors, the message remains clear: maintain a steady hand. Refrain from allowing volatility to become a distraction. Be wary of emotions overcoming a long-term strategy. Stay diversified and remain invested.

William Rutherford is the founder and portfolio manager of Portland-based Rutherford Investment Management. Contact him at 888-755-6546 or wrutherford@rutherfordinvestment.com. Information herein is from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Investment involves risk and may result in losses.

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