As the first quarter of 2025 comes to a close, markets have extended the decline that began in late February, driven by what can only be described as a self-inflicted rollercoaster stemming from the United States’ on-again, off-again tariff announcements.
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This unpredictability has made strategic decisions particularly challenging for investors. With policies constantly shifting—and at times reversing—their lasting impact on supply chains, the broader economy, and corporate earnings remaining difficult to assess. And as we know, markets and uncertainty rarely coexist comfortably. Since the February highs, the S&P 500 has declined 10.7%, marking the fifth-fastest correction on record—a sharp reminder of how quickly markets can react to shifting policy signals and headline-driven uncertainty.
While the situation remains fluid, the recent market pullback has been driven largely by negative sentiment surrounding trade policy—more so than by clear signs of broad economic or corporate weakness. A steady stream of unsettling headlines has weighed on confidence, pushing investor sentiment to levels not seen since some of the most turbulent market periods of the past three decades.
While recession concerns have grown louder, they appear more reflective of recent market volatility than of meaningful economic deterioration. The current market reaction seems out of step with underlying fundamentals, which continue to show resilience. Yes, growth is slowing, and uncertainty around trade policy has created a “soft patch,” weighing on consumer confidence and corporate expectations. However, key indicators—such as durable goods orders and broad measures of business activity like the ISM composite index—still point to expansion, not contraction. Earnings reports may reflect more cautious outlooks, but slower growth is not the same as negative growth. Based on the data today, the risk of a near-term recession remains low.
It’s natural for concern to build during market downturns—especially after two strong years of returns, when steadily rising prices can begin to feel like the norm. That familiarity can shape expectations and make routine corrections feel more unsettling than they truly are. In these moments, the temptation to sidestep volatility by moving to cash and waiting for the “right time” to re-enter can grow stronger. But even if one exits at the right time, getting back in with precision is rarely as easy. More often than not, this approach leads to missed recoveries and long-term underperformance. Context is key: over the past 15 years, we’ve seen eight double-digit market corrections—including two major bear markets in 2020 and 2022—yet only one resulted in a brief recession lasting just two months.
Staying invested through periods of volatility has consistently proven to be a sound strategy. While corrections are never comfortable, they’re a normal part of the market cycle—and often present an opportunity to thoughtfully review and rebalance portfolios, rather than react out of fear. As the chart below reminds us, there’s always a reason to sell. From financial crises to pandemics to geopolitical conflicts, markets have faced countless challenges—and moved past them all. In time, today’s concerns will likely become just another entry in the long list of reasons that once seemed urgent, but ultimately proved temporary. Staying committed to a well-built plan not only helps navigate uncertainty—it also allows investors to stay positioned for the long-term growth that unfolds beyond the headlines.
Our Bottom line: Markets will always find ways to test our patience and resolve. In these moments, staying disciplined, focused on fundamentals, and resisting the urge to make reactionary decisions remains our best approach. I’m reminded of a quote from famed investor David Tepper: “Sometimes the hardest thing to do is to do nothing.” It’s a powerful reminder that patience is often the most effective response in the face of market volatility.
- Jack
Stay Organized This Tax Season:
As we approach tax season, we want to ensure you have everything you need to stay organized and prepared. This year’s tax filing deadline is Monday, April 30, 2025. To support you through this process, your personalized 2024 Tax Document Checklist is now available through your online client portal and a printed copy was mailed to you on March 14th.
This checklist outlines the tax documents you can expect to receive for your accounts, including estimated delivery timelines. It’s a helpful reference to track both the official slips issued by Richardson Wealth and those that may come directly from third parties, such as mutual fund companies or limited partnerships.
For added convenience, you can also visit the Tax section on the myrichardsonwealth.com portal. It’s a central hub where you’ll find a variety of resources, including copies of certain tax slips and your checklist - all designed to simplify your tax preparation.
If you have questions or notice you’re missing a document, please don’t hesitate to reach out. Our team is here to support you every step of the way.
Empowering the Next Generation of Wealth
This is the second session in our ongoing series led by our own Alysha Tse, focused on equipping the next generation with the knowledge and tools to build and manage wealth with confidence. If you or your adult child are thinking about purchasing a first home in the next one to two years, join us on May 14th at 12:00 PM PT, as Alysha walks through the financial strategies, government programs, and planning steps that can help make that goal a reality.
The session will cover what’s needed for a down payment—whether it’s a 5% insured mortgage or a 20% conventional loan—and how to navigate purchase price thresholds. You’ll also gain clarity on how lenders assess debt servicing, what qualifies as eligible assets, and how to enhance your borrowing power. In addition, Alysha will break down the registered account options to fund a down payment, including the FHSA, TFSA, and RRSP. You’ll learn which accounts to prioritize based on your income and tax situation, how to leverage the Home Buyers’ Plan, and how to coordinate contributions for maximum impact.
You can register in advance by clicking here. A reminder email with full details will be sent closer to the date.
Missed the first session? Estate Planning: Understanding the Complexities of Gifted Assets and Safeguarding the Next Generation of Wealth offered practical guidance on estate planning essentials, gifting strategies, and protecting family wealth. You can watch the replay here. To access the recording, use the passcode: mqu&5guo.