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Taking Time...
Andrew Zaro
June 06, 2025
It’s been a month since I last rattled this keyboard with my normal ramblings, though a much needed break from the norm. My now-wife and I eloped to the Oregon Coast, and then honeymooned in Hawaii, so it was a clean two weeks of no work, no market news, no checking on portfolios. Just experiencing a new place, new activities, and being present and sharing it all with someone else.
Of course, coming back to my desk after weeks away was the vibe equivalent of plunging off a sheer cliff into the sea (by the way, have you see the cliffs of the Oregon coast?!), it helped cement a belief of mine regarding stock market investing: invest in quality stocks and funds, ignore the short-term noise, the “magic” happens slowly over a long period of time.
Leading up to May, though, the stock market was doing its best to keep investors panicked. The Nasdaq-100 (tech-dense index), at one point, was more than 22% DOWN year-to-date (YTD), with the S&P 500 (top 500 largest US companies) down over 18%, and Russell 2000 (small cap stocks) down nearly 25%. Those are tough numbers for any investor, and as someone who manages portfolios for many investors, it was tough to navigate for advisors too.
My advice stayed true to similar declines of years’ past: stay invested, but make sure you have cash for the short-term (3-12 months, depending on age/income). Not easy, but simple. That’s difficult advice to hear when your portfolio is down 15-30%, though it’s most often prudent advice.
May, usually a boring and muted month for returns, did its best job at cheering investors up and getting them in better spirits just in time for the start to summer. Here’s what May’s returns looked like, plus resulting YTD returns for end of May:
Nasdaq-100: +9.6% for May, and +1% for 2025
S&P 500: +6.2% for May, and +1.3% for 2025
Russell 2000: +5.3% in May, and -6.8% for 2025 (still some catching up to do here in small cap stocks)
All that date to say this: investing in quality stocks comes with drawdown periods - they’re usually unavoidable - even if those drawdowns make those stocks’ quality questionable. Making changes during periods of high volatility and uncertainty can be very much like trying to hit a softball from a tee after being spun in a circle 10 times. Refocusing instead to preserving your short-term sanity with healthy household cash reserves is critical to being able to endure periods like this.
And over the longer timeline, those quality stocks and stock funds tend to grow (slowly but surely), and coupled with regular cash infusions (that part is on you - if you aren’t feeding it, you’re cutting your future self short a bit), the power (magic?) of investing becomes obvious (spoiler: it’s growth).
Here’s the lesson, though: do what you’re supposed to do, but don’t forget to live your life. It’s incredible to be fortunate enough to earn excess money, and be able to invest that money. Though know that obsessing over the short-term “noise” can easily distract you from the great things in life that you might be more deserving of your attention. You can’t nurture a stock position to perform better, but you can nurture your own real life while your portfolio grows quietly in the background.
If you haven’t in a while, take some time to refine how you spend your days in the places and with people that matter the most.
I have three more summers with my son, and five more summers with my daughter (until they’re officially adults, and probably too cool for me for a while), and we make our summers count!