2025 Halftime Report

The first half of the year is behind us, and if you've been paying attention to the markets, you might be wondering if it's ok to breathe finally. The last few months have been pretty enjoyable (if you're actually investing), but the start to the second quarter...not so much. It felt like the carnival ride that feels a litttttttttle bit under-maintained, but also maybe a little fun/thrilling (terrifying enjoyment?), so congrats if you stayed the course. 

The months of May and June brought back a positive trajectory for most stocks and funds, though we might all be carrying some trauma from the stock market's reaction in early April to tariff drama, political posturing,  inflation data, employment data, global conflicts... Our near-, mid-, and long-term indicators (that measure what level of stocks are participating in any upside action) plummeted to start Q2, though rallied back strongly through the rest of the quarter. We saw the dollar weaken further, which is usually a boost for international stocks - and it was certainly the case for both emerging markets and developed markets (particularly Europe). 

It's also worth highlighting the decline in the markets, bottoming in early April, and the subsequent rebound/recovery in the short time since then. Here's the numbers from the first half of 2025 for major benchmarks, as well as the returns since the April 8th, 2025 low-point:

The best-performing stock sectors from first half of 2025 (& return since April 8th, 2025):

What's the lesson here? Particularly since the first half was full of a lot of news and dramatic headlines, though the numbers printed for the first half of the year are quite acceptable for the long-term investor. With the average return of the S&P 500 annually being about +10%, the trajectory is just slightly ahead of the average annual return. 

So, I think the lesson here is simple: stay invested, align your investments to the broad market or towards stronger pockets of the market (i.e. strong sectors), and let it ride. Furthermore, keep contributing to those investments. 

The more plants sowed into a garden, the greater bounty one can reap over time. 

Easier said than done, though the most beneficial thing you can do to positively affect your net worth is to maintain healthy month-to-month cash flow, and keep putting your excess cash to use into something that will return you more cash. Make your hard-earned money keep working for you. 

Besides, the only other two options you have for any excess money earned is to spend it all, or hide it under a mattress (i.e. leaving in a near-0 interest rate savings account). Of those three choices, only one of them will move the needle on building your wealth. 

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