Certainly, Wednesday, April 9, was an extraordinary day. In a sharp reversal from recent weakness driven by tariff concerns, the S&P 500 (IVV) surged +9.5%, small caps (SCHA) followed closely at +9.3%, while core bonds (AGG) held steady at +0.2%. But markets giveth and markets taketh away—just one day later, the S&P 500 closed down -3.5%.
All D&A clients remained fully invested throughout this period, with portfolios aligned to target asset allocations and no idle cash. Could we have sold something “rich” to buy something “cheap”? Sure—but good luck getting that timing right. We chose not to make any reactionary moves.
While I was surprised by the velocity of the rebound, I wasn’t surprised to see a quick retracement. This kind of whiplash reminds me of the heightened volatility we experienced during the COVID era. In times of deep uncertainty, behavioral biases surface as markets search for equilibrium. We’re still on that journey.
As I noted in my April 1 blog, “Some are looking for Trump to roll back the tariff proposal to secure a soft landing, while others see him as ‘inflexible,’ leading to continued uncertainty.” So far, we’ve seen a little of both.
Despite the troubling headlines, I will reiterate what I said in my March 12, 2025 blog:
Though no one likes losses, long term investors have ALWAYS been rewarded with market returns reaching new all-time highs by ignoring volatility and holding through tough times. Though “they all seemed like the end of the world at the time”, markets have always recovered.