Dear Clients and Friends, 

Well, here we are in 2025. A new administration, new policies, and a fresh never-ending news cycle for trading algorithms to digest and feast on within seconds of hitting the wires. In the world of more technology and program trading, bouts of volatility can be more frequent in periods of uncertainty.

Uncertainty and volatility are relatively common in the first year of a new administration. The last several elections dating back to the first two Bush terms, Obama, Trump, and Biden have all shown some volatility in the first part of their first year, and with more direct and aggressive policies being proposed and utilized in 2025, this year is certainly no exception.

As the market and economy digest the news, deals are inevitably made, and businesses adjust to a new normal, I do not expect uncertainty within markets to be a lasting theme in the months and years to come. The market had two massive years in 2023 and 2024 and frankly the hardest hit parts of the market were the ones that rallied the most. In many portfolios that were equity-based, we had gains in many stocks in the 100%-600% range over the last few years. Stocks do not trade up in straight lines and some consolidation was to be expected. I always say that when markets are overbought and expensive, they can stay that way for quite a long time (as they can when they are oversold), but they are always looking for a catalyst to sell off and the policy uncertainty early this year is a great catalyst to take a step back. With that, we continue to be patient and look for opportunities to buy good businesses in good industries with long term growth prospects and capitalize on market weakness as ultimately these pullbacks always present as buying opportunities for medium and long-term investors. We’ve been spoiled over the last couple years and this correction is the tax we pay for the opportunity to participate in the upside of the market.