Q4 details U.S. large-cap stocks, especially within the technology sector, remained significant drivers of market performance. 2024 was a strong year for U.S. stocks, with the S&P 500 up almost 25%. Some of the largest companies continued to account for a substantial portion of index returns. The bond market faced headwinds in Q4 2024. Volatility in interest rates contributed to negative returns for broader bond market benchmarks during the quarter, eroding some of the year's earlier gains. Economic Backdrop & Sentiment: The U.S. economy showed resilience, which supported corporate earnings and investor confidence. Inflationary pressures continued to be a key focus, with ongoing debates about the path of monetary policy. Concerns about the political landscape and potential market corrections persisted. Q1 Details The first quarter of 2025 marked a noticeable shift in market behavior. Equity markets, particularly those that had led in 2024, faced increased turbulence. U.S. Equity Markets: U.S. large-cap stocks experienced their most significant quarterly decline in some time. A lot of the same stocks that rallied at the end of the year saw substantial pullbacks. The S&P 500 and Nasdaq Composite both registered negative returns for the quarter. International Markets & Emerging Markets: In a reversal from Q4, international developed markets generally outperformed U.S. stocks in Q1 2025. European equities, for example, showed strength, potentially driven by relatively lower valuations and fiscal stimulus. Some emerging markets, particularly in Latin America, also delivered positive returns, with Chinese equities showing a notable rebound supported by policy measures. Market Themes: The quarter was characterized by a rotation away from the previous year's leaders and towards more value-oriented and international stocks. Diversification proved beneficial as different asset classes exhibited varied performance. The impact of geopolitical events and ongoing policy uncertainty from Washington were also prominent factors influencing the markets. Notable events: "Liberation Day" and Sweeping Tariffs: This was arguably the most significant single factor. President Trump's administration, upon taking office, aggressively pursued new trade policies. On March 21 there was an announcement of an upcoming "Liberation Day" where large-scale tariffs would be imposed. These announcements triggered widespread selling across global stock markets. The S&P 500, for example, came down 10% in just three weeks (February 19 to March 11), its fifth-fastest correction in 75 years, wiping out trillions in market value. Inflationary and Economic Impact: The threat of tariffs immediately raised concerns about a resurgence of inflation, supply chain disruptions, and a broader government policy uncertainty. Economists warned that these tariffs would likely lead to higher prices and could cause a slowdown in economic growth, potentially leading to a recession. AI Developments-DeepSeek: The rapid development in AI continued to be a significant theme. In January, the unveiling of China's DeepSeek AI model, which claimed to be more efficient and cheaper than US models, added a new dynamic to the technology landscape and market focus. Sources: Schwab, Fidelity, Vanguard Helping clients: Working with clients over the years allows us to understand each other on a deeper level. We also tend to have similar perspectives on investing and planning. It was not a surprise that most of my clients were not phased and saw it as a buying opportunity. With things being much more volatile than usual, I offered the option of dollar cost averaging new money into the market as I had the capacity to do this. When I had almost 300 clients (not by choice), this was simply not a viable option. It was also nice to proactively review each of my clients’ portfolios to see what the actual impact was for each of them in terms of performance and allocation drift. Again, this was simply not an option when I had too many clients. Some clients that are still working, especially with jobs tied closer to the government, had concerns around job security with losing their job unexpectedly as a worst case scenario. This was an opportunity for us to review their planning, portfolio, and ultimately decide if any changes needed to be made and what steps to take for different scenarios. It was nice to be available for them and help in a thorough manner without feeling rushed. Other planning opportunities arise in volatile times, and I am glad to now have the capacity to be more responsive, more available with an appointment within a few weeks, and take my time with my clients to explore strategies with them. On a personal note, I had a chance to travel with my parents to Chicago and Atlanta. Attached are a few pictures for you. I’d love to hear and see what you’ve been up to. Please don’t hesitate to reach out. I look forward to helping you soon. You are family and served with ai!-love, Jason with Family Ai! Financial