By Johara Farhadieh
Chief Investment Officer (CIO)
April 8, 2025
Hello! As you have likely heard by now, global financial markets over the past several days have experienced significant volatility and uncertainty. We have heard from numerous customers and key stakeholders who are understandably curious how these events have impacted their investments with Wespath. With that in mind, I wanted to share a few thoughts on the recent market movements, our perspectives on the situation, the resources available to you as Wespath investors and, most importantly, a reminder on the enduring principles of long-term investing.
Many major global stock markets, including here in the U.S., experienced a pronounced and widespread decline between Thursday, April 3 and Monday, April 7. This was primarily driven by concerns surrounding the Trump administration’s newly announced and implemented sweeping tariffs on imports. These tariffs are anticipated to have a substantial impact on global trade. Investors are concerned they could reignite inflationary pressures within the U.S. economy and potentially hinder economic growth to the point of triggering a recession.
These new tariffs also raised anxieties about retaliatory measures from key trading partners, such as China. Reciprocal tariffs and the potential formation of more regional alliances working to counteract the U.S. tariffs introduce new unknowns to the global economy. These factors could escalate global trade tensions and negatively impact worldwide economic activity.
Tariffs were a part of the first Trump administration’s economic agenda and have continued to be a major theme in the early days of this second administration. We have already seen investors react to the implementation and subsequent pause of tariffs on Canada and Mexico in the first quarter. However, the market’s swift reaction to last week’s announcement indicated that this round of tariffs was perceived as more far-reaching and impactful than initially expected.
On Thursday and Friday, the S&P 500 experienced its most-significant two-day decline since the COVID shock of March 2020. The erratic trading continued on Monday, which saw significant declines in the Chinese stock market and dramatic up-and-down swings in the U.S. At one point on Monday, the S&P swung wildly from down 3% to up 4% based on rumors of a 90-day pause on most tariffs. When the White House denied the rumors, those gains were erased in minutes. All in all, the S&P 500 has re-entered “correction” territory, a technical term indicating a market’s decline of more than 10% since its most recent peak.
While dramatic declines in the stock market can be uncomfortable, I want to assure you that Wespath anticipates and prepares for market volatility. Market corrections and periods of uncertainty are part of the journey to achieve strong long-term returns. For context, this is the 10th correction of at least 10% since March 2009, the low point of the Global Financial Crisis. We remain committed to our investment process, which involves maintaining a long-term perspective.
For the nonprofit, mission-focused organizations we support, we seek to create diversified, balanced portfolios that are capable of weathering near-term storms like we have experienced over the past week. Our balanced fund, the Multiple Asset Fund – I Series (MAF-I), did decline about 7% in three trading days from Thursday through Monday. However, MAF-I modestly outperformed its benchmark, thanks in part to modest outperformance from two of its underlying funds, the U.S. Equity Fund – I Series and the International Equity Fund – I Series.
This is not to say that benchmark-relative performance over a three-day stretch ought to be the main takeaway from this story. In the near term, this fund performance is a helpful reminder on the potential value of diversification and active management in volatile periods. Bigger picture, it is worth emphasizing that volatile markets can create investment opportunities for long-term investors to strategically purchase shares of fundamentally strong companies at more attractive, discounted prices.
During heightened market uncertainty, it is more important than ever to reiterate the fundamental principles of long-term investing. A well-constructed and diversified investment portfolio is designed to navigate both market ups and downs. We strongly caution against impulsive decisions based on short-term market fluctuations, as timing the market is difficult and often unsuccessful. Please contact your Wespath relationship manager if you have any questions about your organization’s specific situation, or email us at [email protected] with any inquiries. We are here to help!
I hope this information brings some clarity to what I know is a complex topic. Remember, markets have historically proven their ability to rebound from even the most historic declines (above, we illustrate the market’s rebounds from significant declines in past years). But experiencing the positive impacts of these rebounds requires remaining invested, keeping to your long-term plan and resisting the urge to make reactionary near-term decisions.
To conclude, I want to reiterate my conviction in Wespath’s investment approach and in the Wespath team who is here to support you during these uncertain times. Maintaining a disciplined, long-term focus has always been— and will continue to be—an integral part of our investment process. This process is firmly grounded in policies and procedures that we are sticking to. We have a great team of experienced professionals to guide us, and a strong Board that holds us accountable.
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