Different Actors, Familiar Plot | March Market Commentary

“Jane, get me off this crazy thing!” – George Jetson

For those that are not familiar with the 1960’s famous cartoon family and their characters, Jane and George Jetson live in the year 2062 with their 2 children, dog, and robot maid. If only George Jetson knew then how relevant his cry would be in 2025! In one episode of The Jetsons ("The Jetsons and the Space Mutts"), George tries to buy an exotic space dog—only to find prices sky-high thanks to tariffs on space imports. The takeaway? Even old cartoons knew tariffs make things messy and expensive. It’s almost like they saw it coming, or ……….they really are in the future and were giving us a warning through time.

Fast forward to today: at the end of Q1 2025, the big market stories are all about tariffs... and DOGE. Yes, DOGE, the Department of Government Efficiency. The administration has hinted that the DOGE initiative might be winding down, but the bigger issue—the uncertainty around tariffs—continues to hang over the market like a cartoon anvil. Here’s what’s going on:

Market Snapshot

S&P 500: -4.3%
Nasdaq Composite: -10.3%
Russell 1000 Value: +2.1%
MSCI EAFE (Developed International Stocks): +6.2%
- _{Source: YCharts as of March 31st}

Economic & Policy Highlights

U.S. economic growth is slowing: Q1 GDP is projected to be just 0.3%, down from 2.3% in Q4 of 2024.
- _{CNBC: https://www.cnbc.com/2025/03/31/first-quarter-gdp-growth-will-be-just-0point3percent-as-tariffs-stoke-stagflation-conditions-says-cnbc-survey.html}
Inflation is expected to hover around 2.9% for the year—still above the Fed’s 2% target but soft enough to keep the door open for rate cuts.

The speed of policy changes has made data feel outdated the moment it’s released. In this kind of environment, discipline and perspective matter more than ever. We’ve had a lot of questions lately, here are a few of the big ones:

“Are we headed for a recession?”

Maybe. Recession odds are definitely rising. Goldman Sachs recently bumped their probability from 20% to 35%, and JP Morgan moved from 30% to 40%. Tariff uncertainty is the main culprit.

It’s not just economist hand-wringing either, consumer confidence has taken a hit. According to a University of Michigan Survey, sentiment dropped 11.9% since February and is down 28.2% year-over-year.

_{CNBC: https://www.cnbc.com/2025/03/28/consumer-sentiment-worsens-as-inflation-fears-grow-university-of-michigan-survey-shows.html}

Regardless of whether we get the technical definition of a recession, generally defined as a significant, pervasive, and persistent decline in economic activity, commonly characterized by two consecutive quarters of negative gross domestic product (GDP) growth, the damage to confidence has already started. People and businesses are more cautious, and that will have ripple effects. That said, the administration has started backing away from the DOGE project (headed by—you guessed it—Elon Musk) in response to public backlash. Tariffs could be next.

“Should we be selling all our stocks?”

This is where long-term discipline comes into play. Jumping out of a moving train rarely ends well.

Here’s some perspective: S&P 500 revenues are still expected to grow 5%+ in 2025, and earningsare projected to grow 11.5%.

_{Goldman Sachs: https://www.goldmansachs.com/insights/articles/the-s-and-p-500-is-forecast-to-return-10-percent-in-2025}

Also worth noting:

China is rolling out its largest stimulus in years
Europe is increasing defense spending and fiscal activity
Interest rates in the U.S. are easing on both the short and long ends
- _{Nasdaq: https://www.nasdaq.com/articles/first-quarter-2025-review-outlook}

In other words, don’t abandon equities, but be thoughtful. As we saw in the performance data above, international and value stocks are holding up well. Shifting your portfolio might be smarter than retreating from it. In periods like this, it really depends on if you are earning an income, close to or in retirement. History has shown us that smart investing and buying on dips yield better results than either sitting on one’s hands or going to safety to later time the market to reenter for better returns.

“But we don’t know what’s going to happen!!!”

Exactly, but we never do. From a random Monday to forecasting Friday’s market, to times like these, we never know. There have been moments in time where we thought things were going to be worse than they were and, instead, we saw raging bull markets and those where negative events came out of nowhere. It’s easy to fall into the “this time is different” trap, but uncertainty is a constant in investing. Remember 2008? Or COVID? We had no idea how long those events would last. Tariffs may be disruptive, but they’re also measurable. They’re not new, and they’re not the end of the world. They are just something that we now must understand how they fit into the equation. The frustrating part is that we don’t know how long or how deep these are going to cut, but a good comparison is Brexit. Ed Legget of Artemis put it well:

_{(“Five Years Since Brexit in Charts,” Emma Wallis, Trustnet, February 3, 2025).}

That uncertainty was rough on UK markets, but they still delivered positive returns in the years that followed. The FTSE underperformed the MSCI All Country World Index, but it didn’t collapse. We’ve seen this movie before. The actors and costumes change, but the plot remains familiar. And the US is in a much more stable and desirable position than the UK was during Brexit.

_{Source: https://www.trustnet.com/news/13436531/five-years-since-brexit-in-charts-how-has-it-impacted-the-uk-stock-market}

Final Thoughts

We wish we had clearer skies to report, but we play the hand we’re dealt. While we understand this is jolting for investors at times, it has become the status quo for us through the tech bubble, financial crisis, COVID 19, various administrations, geopolitical tensions, country debt defaults, Inflation, tariffs, and so on over the last 28 years of our experience working with markets. There’s still opportunity out there—plenty of bright spots to be found—and reasons to stay optimistic. We’ll continue watching developments closely and adjusting as needed.

As always, if you have questions or want to talk through anything in your plan, please don’t hesitate to reach out.

Warmly,
Jordan Kaufman
Chief Investment Officer
Green Ridge Wealth Planning

Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.

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February Commentary: Challenges, Opportunities & Global Market Shifts

I was reviewing headlines as I prepared this commentary and found myself overwhelmed with the amount of news that is coming at us at an unbelievable pace. It is truly dizzying; but we stay on top of it and keep marching on!!!

Market Performance Recap
February saw a shift in sentiment from the optimism at the start of the year, with U.S. equity markets experiencing a pullback:

S&P 500: -1.7% in February, +1.4% year to date
Nasdaq 100: -4.4% in February, -2.3% year to date
- _{Source: YCharts as of February 28th}

In contrast, international equities posted gains:

MSCI All Country World Index ex USA: +2.3% in February, +5.5% year to date
MSCI Emerging Markets Index: +0.9% in February, +2.3% year to date
- _{Source: YCharts as of February 28th}

Macroeconomic Overview
Several factors contributed to the negative shift in market sentiment:

Inflationary Pressures: Inflation data came in hotter than expected, fueling concerns that price increases may persist. This raises the likelihood that the Federal Reserve will maintain higher interest rates for longer.
- _{U.S. Bureau of Labor Statistics:}_{https://www.bls.gov/cpi/}
Slowing Growth Expectations: Economists have revised GDP growth forecasts downward due to potential economic headwinds, including tariffs, labor market disruptions, and corporate job cuts.
- _Barron’s:_{https://www.barrons.com/articles/economy-interest-rates-inflation-federal-reserve-tariffs-6a078bc3}
Policy Uncertainty: Rapid shifts in government policies have introduced unpredictability, making it challenging for businesses to provide meaningful guidance and adjust their strategies.

International Markets Outperform
While U.S. markets struggled, international equities—both developed and emerging—posted solid gains. A notable factor was the decline in the U.S. dollar, which boosted returns for foreign stocks when translated back into dollar terms.

_CNBC:_{https://www.cnbc.com/2025/03/04/european-stocks-outperform-us-shares-in-february.html}

For over a decade, U.S. equities have outperformed their international counterparts. However, some market observers have long speculated that this trend could reverse. Is February the start of a more sustained shift toward international outperformance? Time will tell, and we will continue monitoring developments closely. If adjustments to portfolios are warranted, we will act accordingly.

The Federal Reserve: A Pivotal Year Ahead
The Fed finds itself in a delicate balancing act. Current market expectations suggest two rate cuts this year, but inflation will be a key determinant of whether these materialize. Additionally, signs of economic slowdown and job losses—particularly in the public sector—may also influence the Fed’s decision-making.

Historically, the Fed has tended to respond reactively rather than proactively. Given the current economic uncertainty, we anticipate continued market volatility as investors interpret incoming data and policy signals.

Navigating Market Volatility
After a period of relatively smooth gains, markets are now contending with a higher level of uncertainty. This is typical in the mid-cycle phase of a bull market, where volatility tends to increase as trends mature. While we view this as a normal and healthy part of market cycles, the speed and frequency of policy shifts introduce additional complexity.

The best approach? Stay disciplined. While volatility may feel disruptive, it also presents opportunities—whether through strategic portfolio adjustments or by taking advantage of mispriced assets.

A Balanced Perspective: What Could Go Right?
During periods of heightened uncertainty, investors often focus on downside risks. While risk management is essential, successful investing also involves identifying potential opportunities. Some possible positives include:

Europe strengthening its economic position by reducing reliance on the U.S.
The possibility of the U.K. reconsidering its position within the European Union.
U.S. companies adapting to new trade policies, finding innovative workarounds.
Small and mid-sized U.S. companies potentially benefiting from protectionist policies, leading to broader market participation.

Periods of market turbulence can be unsettling, but they also create openings for long-term investors. Staying patient, maintaining perspective, and capitalizing on dislocations can turn challenges into opportunities.

As always, we remain committed to guiding you through changing market conditions with a focus on long-term success. If adjustments to portfolios become necessary, we will act decisively and strategically.

Jordan Kaufman

Chief Investment Officer

Green Ridge Wealth Planning

CPI, CPE, and PPI: What do these 3 indices track, and what are they used for?

Spoiler alert - these are the three most prevalent indices used to track and monitor inflation. Before we dive into what these indices track exactly, and how they differ, we need to first understand inflation at a high level.

“Inflation is the increase in the prices of goods and services over time. Inflation cannot be measured by an increase in the cost of one product or service, or even several products or services. Rather, inflation is a general increase in the overall price level of goods and services in the economy.”

_{FederalReserve.gov}

Essentially, inflation means that, over time, things tend to cost more. A little bit of inflation can be a sign of economic growth, but too much inflation can be bad news for the economy. These indices provide a snapshot of how much things cost and where these costs might be headed. This not only helps us understand the economy but also impacts financial markets.

Consumer Price Index (CPI)
CPI is the most commonly understood inflation measure. It is released by the U.S. Bureau of Labor Statistics (BLS) and measures Americans’ purchasing power by tracking the cost of items over time.
These items are put into what is called the “basket of goods and services,” which consists of a weighted mix of what American’s typically buy - think housing, food, etc. CPI helps determine increases in government benefits like Social Security and food stamps as well as helps adjust Treasury Inflation-Protected Securities (TIPS).

Personal Consumption Expenditures (PCE)
PCE is another key measure of inflation but has a few differentiating factors. It is also released by the BLS and measures the prices that Americans pay for goods and services, but it weights the categories differently. While the CPI tracks about 80,000 products, the PCE includes extra data like government spending, covering almost 100% of the U.S. economy.
Many consider the PCE more accurate because of these differences, and it is used by the Federal Reserve (the “Fed”) when setting monetary policy. It is important to know that the Fed holds a target of 2% inflation which signifies steady economic growth while maintaining price stability.

Producer Price Index (PPI)
With CPI and PCE providing insight from the consumer’s point of view, what about the producers? PPI measures the cost to producers for goods and services and is released by the BLS monthly. It is based on a survey of about 35,000 establishments, which submit roughly 100,000 price quotations each month.

Producers use the PPI to develop pricing strategies and forecast future consumer costs. The government leverages this data to shape monetary and fiscal policies aimed at controlling inflation, keeping it closer to that 2% target.

Together CPI, PCE, and PPI can help paint a picture of inflation in the U.S. They’re not just another statistic or financial indicator; these indices are key indicators that the Fed uses when setting interest rates, which can have a major impact on financial markets. They are essential tools in the investor’s toolkit.
_{Source: https://www.schwab.com/learn/story/tracking-inflation-using-cpi-pce-ppi-indexes}

Now that we have a better understanding of the three most commonly used indices to monitor inflation, we can start to see how inflation is integrated into financial plans, and why it’s a critical consideration for retirement planning.

Considerations for Financial Planning: Using different inflation rates is a key stress-test we use to ensure our clients are prepared for various economic environments. A miscalculation in inflation expectations can lead to higher-than-anticipated expenses, which may require an adjustment to the plan.

How does inflation affect the portfolio plan during retirement?
How does it affect one’s goals? Do they have legacy plans, or are they looking to cash their last check?

Let’s break this down with an example. Below, we can see how a $2M portfolio performs under different inflation environments —2% (the Fed’s target), 3%, and 4%— over a 25-year retirement. In this scenario, we assume that the individual retires at the age of 65 and earns an average rate of return of 6%. With base, or starting, annual expenses of $100K, we project different inflation effects on the portfolio until age 90.

Key Takeaways:

At 2% inflation the portfolio holds up well, allowing the retiree to sustain their lifestyle while still maintaining substantial value, potentially leaving behind a large amount of money to their heirs or charity.
At 3% inflation, the portfolio declines over the life of the financial plan ending with $1.2 million.
At the higher 4% inflation rate, the portfolio declines more aggressively to $450K. Looking at this scenario, one must be mindful of the portfolio value and at some point, there may be cause for adjustment to the plan.

_{Assumptions:
*Rate of Return of 6%
*Inflation Rates of 2%, 3%, and 4% Throughout All Years
*Starting Annual Expenses of $100,000 or 5% Withdrawal Rate
*Projections from 65 years old to 90 years old}

Now let’s take a deeper look into the annual expenses under different inflation rates. We see the starting annual expenses of $100K increase each year with inflation. If you look at the 2% rate (the Fed’s target) for example, you can see that the same annual expenses of $100K at age 65 will grow to $164K by age 90.

_{*Total Accumulated Expenses in Scenario 1: $3.367 million
* Total Accumulated Expenses in Scenario 2: $3.855 million
* Total Accumulated Expenses in Scenario 3: $4.431 million}

The interesting thing to note, is that the total accumulated expenses over the 25-year period is a million-dollar difference between projecting inflation at 2% compared to 4%. This is why it is crucial to look through different inflation rates and stress-tests as one engages in the financial planning process.

January 2025 Commentary: Signals, Noise, and Market Insights

It has been an exciting start to the year, so let’s jump right in!

Markets: The S&P 500 index was up 2.7% in January. The Nasdaq was up 1.6%. Interest rates were generally unchanged. International stocks measured by the MSCI EAFA index were up a sizzling 4.8%. Even emerging markets were up in the month of January.
- Source: Morningstar
Politics: The new administration is hot out of the gate, signing executive orders and moving swiftly to implement campaign promises. Some of these policies are being received with mixed reactions, and the White House has rolled back or postponed polices like state funding cuts and tariffs. Similar to the first Trump term, it is hard to keep your eye on one apple when the whole tree is being shaken.
Federal Reserve Policy: The Fed held rates steady in January, and despite increased concerns over inflation, signaled that they still expect to cut rates later this year.
DeepSeek: One of the biggest headlines this year has been the release of DeepSeek-R1, a new development from a Chinese artificial intelligence (AI) company that has caused incredible buzz in the technology community. The news has raised questions over American dominance in the AI space and caused a lot of selling in American technology companies over fear their market position is not as strong as previously thought.
Q4 2024: Earnings for the 4th quarter of 2024 have started to be released, and results have been generally good. The blended growth rate in earnings so far is 13.2%, the highest year over year growth rate since the 4th quarter of 2021. The blended revenue growth rate is currently coming in at 5%, the 17th consecutive quarter of positive revenue growth.
- Source: Morningstar

What does this all mean? When markets are up in the month of January, that is generally a good sign. If we take the first bullet point around market action, it is generally a positive data point. As for the politics, we stand by our past comments that the new administration is going to invite more volatility to the picture with its aggressive policies and disruptive nature, but the market seems to be optimistic about how it will all shake out. The Federal Reserve I would put in the slightly negative column since they seem to be slowing down their accommodative stance, but that makes general sense when mixed with the fiscal policies that are being pushed forward.

DeepSeek-R1’s release has been called a “sputnik moment”, a colloquial reference suggesting a public fear that a country has fallen behind another in technological advancements. There are still some questions to be answered here. OpenAI, the company that created ChatGPT, has accused DeepSeek of stealing its intellectual property. The new large language model (LLM) release by DeepSeek claims to be a cheaper, faster, and more efficient experience. Supposedly, DeepSeek-R1 was developed in two months and cost less than $6 million to build. This is massively less money and time than most AI developers would have thought, implying that American companies are overspending on building out their AI platforms.

Things being cheaper and more efficient is generally a good thing. We don’t interpret this news or release as a reason to panic but instead would view it as a potential positive for things to come. It is unlikely American companies would be comfortable entrusting their customers data to a Chinese AI company, so this isn’t an immediate threat to existing projects or cash flows. What it does do is increase the demand for further innovation in this space for the players already involved. There are some lessons to be learned with how DeepSeek-R1 is able to do what it does, and the magic seems to be more in how they approach the problem than secret ingredients.

Earnings are incredibly important in trying to figure out where things go from here. However, with so much uncertainty in the issues mentioned above, it is hard to separate the signal from the noise. We continue to monitor how the numbers and guidance roll out, but macroeconomic issues and policies seem to have the greatest impact on overall market direction at the moment.

If we were to tie it all together with a nice neat bow, things are off to a good start for 2025 despite what seems like a whirlwind of craziness. We continue to view sell offs as buying opportunities, but we also think market rallies are a good time to consider rebalancing and positioning for future dips. Another way to say it is “stay calm amidst the chaos”. While we might not love every headline or news story, brighter days are ahead.

Jordan Kaufman

Chief Investment Officer

Green Ridge Wealth Planning

Disclosure:

This commentary is provided for informational purposes only and reflects the opinions of the author as of the date of publication. The views expressed may change without notice and may not reflect the opinions of Green Ridge Wealth Planning as a whole. The information presented is not intended to constitute investment, legal, tax, or other professional advice and should not be relied upon as such. Past performance is not indicative of future results. Readers should consult with a qualified professional for guidance tailored to their specific circumstances.

Green Ridge Wealth Planning is an investment advisor registered with FINRA and the SEC. Registration does not imply a certain level of skill or training. For more information, please refer to our Form ADV, which is available upon request.

Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment / tax advice. The investment / tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment / tax strategy for his or her own particular situation before making any investment decision. You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.

2025 First Quarter Commentary

As we close the books on 2024, I can’t help but reflect on the past five years. What a turbulent period it has been: COVID-19, supply chain disruptions, soaring housing prices, an historic rise in inflation in 2022, extreme Federal Reserve policies with the steepest interest rate increases in modern history, and now an awkward normalization (if anything can be considered “normal” anymore).

Top Financial Takeaways for 2024

Stock Market Surge: The S&P 500 rose 23%, with the Nasdaq up nearly 29%, driven by robust economic growth, enthusiasm around Artificial Intelligence (AI), and Federal Reserve rate cuts.
- Source: yCharts
Economic Resilience: U.S. GDP grew by 2.9%, defying high interest rates and unemployment, while inflation slowed significantly, supporting a "soft landing" scenario.
- Source: yCharts
Global Growth: The global economy expanded by 3.2%, with easing inflation and stronger trade, although geopolitical risks and elevated interest rates persisted.
- Source: KPMG Global Economic Outlook Dec 2024
AI and Tech Boom: AI innovation fueled gains in tech stocks, boosting investor optimism throughout the year.

Interest Rates and Inflation

Interest rates and inflation have been major areas of concern for the economy and markets. COVID-19 caused significant shifts in demand, extreme stimulus measures, and stress on global supply chains. Add the war in Ukraine, and the result was a massive spike in inflation followed by a surge in interest rates.

As 2024 progressed, demand normalized, stimulus effects waned, and global supply chains began to stabilize. Consequently, the Federal Reserve reduced the overnight borrowing rate from 5.25–5.5% at the start of the year to 4.25–4.5% currently. They have signaled plans for further rate reductions over the next 12 to 18 months.

However, markets remain unconvinced that the fight against inflation is over. Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) data suggest that inflation remains somewhat "sticky" at around 2.7%, still above the Federal Reserve’s long-term target of 2%. There are also concerns that the new administration’s policies—such as tariffs and changes to immigration policy—could impede inflation’s march back to target levels.

The chart below illustrates the gap between market expectations (yellow dotted line) and the Federal Reserve’s forecast (blue dotted line) for future rate cuts. Markets are pricing in 50–75 basis points in cuts, compared to the Fed’s projection of closer to 150 basis points.

The U.S. Stock Market

The S&P 500, introduced in 1957, has delivered an annualized total return of 10.5% over its 67-year history (assuming dividend reinvestment). Of course, returns have varied significantly by decade:

1960s: 7.8% annualized return, driven by moderate growth and a challenging end to the decade.
1970s: 5.9% annualized return, hindered by high inflation, an oil crisis, and declining valuations.
1980s: 17.5% annualized return, fueled by strong economic growth and low valuations at the start of the decade.
1990s: 18.2% annualized return, supported by a strong economy and the dot-com boom.
2000s: −0.9% annualized return, weighed down by the dot-com bust and the 2008 financial crisis.
2010s: 13.6% annualized return, marked by recovery from the financial crisis and zero interest rate policies.
2020–2024: 14.8% annualized return, despite two major market corrections.

It’s worth noting that the strong returns of the last 15 years can largely be seen as a natural rebound from the challenging decade that preceded them. History shows that periods of significant economic and market stress—such as the high inflation of the 1970s—can be followed by extended stretches of robust growth, as evidenced by strong performance during the 1980s and 1990s. This pattern reminds us that recovery and growth often emerge after difficult times.

The S&P 500’s 28% total return in 2024 follows a 24% return in 2023. Such strong back-to-back years are rare, making it reasonable to approach 2025 with some caution. While 2023’s rally stemmed partly from the dramatic selloff in 2022, 2024’s gains were driven primarily by a robust economic environment, Federal Reserve rate cuts, and excitement surrounding AI.

Election Impact

2024 Presidential election results sparked immediate market reactions. Since Election Day, the market has gained 5–6%, slightly above the median post-election return of 4%. Some sectors have emerged as clear winners based on anticipated policies of the new administration, including financials, cryptocurrencies, and mergers and acquisitions.

Source: Goldman Sachs, “How Trump’s election is forecast to affect US stocks.”

Looking Ahead to 2025

Concerns:

Global Trade Risks: Potential trade wars and tariffs under the new U.S. administration could disrupt global markets and increase inflation.
Inflation Persistence: Despite moderation, inflation remains above central bank targets, complicating monetary policy and potentially keeping interest rates elevated.
Valuation Challenges: High equity valuations, particularly in tech, face risks from slowing earnings growth and waning AI enthusiasm.

Optimism:

Economic Growth: The U.S. economy is expected to grow steadily, supported by strong consumer spending and a resilient labor market.
Technology Trends: Continued innovation in AI and tech could drive productivity and market gains.
Monetary Easing: Central banks are likely to maintain accommodative policies, supporting equities and bonds.

Artificial Intelligence and Innovation

AI dominated corporate America in 2024, surpassing even the election in importance. This trend reflects broader innovation themes, including big data, mobile technology, and automation, which continue to drive the U.S. economy.

One intriguing insight from a recent AI-focused talk suggested that manufacturing and production-oriented businesses, rather than traditional tech companies, may be the early beneficiaries of AI advancements. As corporate profits begin to shift, investors may need to adapt equity allocations to capture emerging opportunities.

Final Thoughts on 2025

The stock market remains in a strong uptrend, but signs of potential new leadership are emerging. Industries burdened by regulation and those with strong merger and acquisition potential may take center stage. Optimism among CEOs, both public and private, suggests a “pro-business” shift in sentiment.

At the same time, significant policy shifts from the new administration and the Federal Reserve could create market volatility. By viewing volatility as an opportunity rather than a threat, we can navigate these fluctuations and position ourselves for long-term success.

Wishing you a happy and healthy New Year!

Jordan Kaufman
Chief Investment Officer
Green Ridge Wealth Planning

Disclosure:

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.

December Commentary

It has been less than a month since the election results, and I am already experiencing news overload. These days, even someone’s random predictions seem to make headline news. While you may assume I’m referring to politics, the financial news media is no better. Headlines like, “So-and-so predicts a crash is coming!” or “The man who forecasted XYZ says Bitcoin will hit a billion!” dominate the cycle, and feed into clickbait culture.

Key Financial Market News Headlines – November 2024:

The Dow Jones and S&P 500 hit new all-time highs, with both indices on track for their best month of the year.
Technology stocks experienced volatility, with semiconductor stocks rising on the possibility of eased China export restrictions.
Bitcoin neared the $100,000 milestone, reaching a record high of approximately $99,800 before pulling back slightly.
Inflation concerns persisted as the October Personal Consumption Expenditure (PCE) Index showed prices rising 2.3% year-over-year, above the Federal Reserve’s 2% target.
The U.S. economy grew at an annual rate of 2.8% in Q3, slightly slower than Q2’s 3% growth.
Markets had a mixed reaction to President-elect Donald Trump’s tariff threats targeting key trade partners.
The Russell 2000 small-cap index outperformed, surging roughly 10.5% in November on expectations of tax cut benefits.

There is a lot of the noise, and we aim to sift through it for you. While it may feel like major shifts have occurred, not much has changed fundamentally in the past month. What has changed significantly are expectations, which have driven major market moves.

Market Shifts and Expectations The markets seem to anticipate regulatory easing under the incoming administration. Here are some key indicators reflecting this sentiment:

Cryptocurrency Rally: Cryptocurrencies have surged, partially driven by Trump’s association with NFTs and the broader crypto scene. There’s speculation that digital currencies and assets will receive favorable regulatory treatment.
Financial Sector Gains: Financial companies, particularly investment banks, have rallied strongly. This is largely due to expectations of a mergers-and-acquisitions boom and potential rollbacks of banking regulations.
Small- and Mid-Cap Rally: Small- and mid-cap companies have seen significant gains. While this reflects optimism about “America First” policies, much of the rally is in companies speculated to be potential takeover targets.

Tariff Threats and Their Implications President-elect Donald Trump has threatened significant tariffs on imports from key trading partners, including Canada, Mexico, and China. Historically, Trump has used tariff threats as negotiating tools rather than concrete policy actions. Here’s a closer look at the details:

Canada and Mexico: A proposed 25% tariff on all imports aims to pressure these nations to address illegal immigration and the flow of drugs like fentanyl into the U.S.
China: A 10% tariff has been suggested, lower than the 60% figure Trump floated during his campaign.
Timing: Trump has indicated these tariffs would be among his first actions upon taking office.
Potential Impacts:
- Consumer Goods: Prices could rise on everyday products like avocados, produce, automobiles, and electronics.
- Supply Chains: Integrated North American supply chains, particularly in the automotive sector, could face severe disruptions.
- Economic Consequences: Tariffs could increase inflation, reduce trade volumes, and potentially push Mexico into a recession.

Federal Reserve Reaction Amid this uncertainty, attention has turned to Jerome Powell and the Federal Reserve. At the most recent Fed meeting, Powell emphasized that the Fed is in no rush to cut interest rates. He warned investors not to expect rate cuts at every meeting, citing the strong economic environment as a reason to moderate the pace of cuts. While he did not specifically address concerns about tariffs and inflation, the tempered expectations for rate cuts have been a positive development for markets heading into 2025.

Looking Ahead There’s never a dull moment in the markets! We expect the year to close on a high note, bolstered by the traditional “Santa Rally.” That said, surprises are always a possibility. Wishing everyone a wonderful holiday season! Our next commentary will be in 2025.

Best wishes,

Jordan Kaufman

Chief Investment Officer

Green Ridge Wealth Planning

Jordan Kaufman (CIO) Speaks at NJ Investment Management Intersect Conference

Chief Investment Officer, Jordan Kaufman, CFA, CFP was invited to speak at the New Jersey Investment Management intersect Conference on Thursday, July 18th. Jordan covered the following topics:

Asset Allocation: Achieving the Optimal Mix

Navigating an increasing exposure to alts (alternative investments).
The role of private credit for borrowers and investors.
Opportunities in private equity and venture capital going forward.
Examining the "Magnificent Seven" dynamic - are the tech giants starting to resemble the "Nifty Fifty" of the 1970's or the early 2000s Dot-Com Bubble?

See Jordan's 5 takeaways from the day below:
"There is so much innovation in the financial industry! We heard from over 10 different companies and speakers that all head strategies that are really offering a different approach on how to add value to portfolios and shift risk. Left a lot to think about!

There is no one “right” way to do things; there is more than one way to make money out there! I didn’t agree with every approach I heard at the conference, but I felt that they were all well thought out and competent approaches to how to manage money. The real trick is finding the one that makes the most sense for you.

Reducing risk (in the form of volatility) continues to be a key theme in the industry. Many of the presentations focused on how to dampen volatility and source returns from somewhere other than traditional market beta (exposure).

There isn’t a lot of “whistling past the graveyard” in the industry! Back in the financial crisis, the financial industry caught a lot of flack for not properly assessing risk and identifying where it might be hiding in the shadows. I sensed from the conference that the industry has a healthy appreciation for risk, and continues to evolve how it thinks about it.

The general quality of professionals in the financial industry continues to improve! I was very impressed by the sophistication and quality of attendees. It has been a difficult industry since the financial crisis, and they say only the strong survive…..toast to the strong!"

GRWP Reacts to Tumultuous Market

Hi Green Ridge Family!

If you saw today's news, you probably noticed a down market with a lot of red.

What’s going on? Today's actions, combined with some selling that happened at the end of last week, has made for a tough few days in the market. Economic weakness, the yen carry trade, concern over Fed policy – whatever you want to attribute it to, today's movement was abrupt and startling. But let’s look at the reality of where we are now and what to take into consideration when we have moments like this.

We see very little systemically wrong with the markets that would justify a recession.
August is typically a weak month. We are only five days in, so it is too early to judge, but it is normal and healthy for markets to have sell offs.
The S&P is still up a little over 9% for the year.
This could be enough for the Fed to start cutting rates….possibly…but in September at their meeting, not at an emergency meeting because there doesn’t seem to be an emergency.

We want to remind everyone that from days like these, great future returns are forged! We have been actively looking for opportunities during this market sell off and we will continue to do so. We are doing the exact opposite of sitting on the beach or hiding under our desks. We woke up this morning with ice in our veins ready to take advantage of the storm!

We know that this is unsettling and can be stressful, but please be confident that we are fighting for you and your financial future. As with all moving markets, this too will pass, and we will be stronger for it! Until then, we will find opportunities where they present themselves, both to buy and to sell.

Financial Planning Can Be Overwhelming. Here Are 8 Steps to Get You Started.

Creating a financial plan can feel like an overwhelming task. There is paperwork to gather, future scenarios to consider and decisions to make. As a result, it sometimes gets placed far down on our “to-do” list, making way for seemingly more urgent and less complicated tasks. However, it is something that requires attention. Our clients who DO plan and have good habits are often in a much better position to achieve their financial goals than those who don’t.

Here is a short checklist of things to consider, whether or not you have started the financial planning process:

Budgeting: Is your net income in line with your expenses? We often start here as it's the cornerstone of financial planning. Without having a proper budget in place, it will be difficult or counterproductive to continue further down the list.

Pay Down High-Interest Debt: Once a budget is in place and you start to see excess positive cashflow, we suggest paying down any high-interest debt, like credit cards, first. Doing so will alleviate the stress associated with this debt and eliminate a line item on your budget.

Take Proper Advantage of Employer Benefits: It is important to understand what benefits are provided to you by your employer. You don’t want to leave money on the table by not taking full advantage of all available programs. For example, employers often offer a matching contribution to your 401k. You should be maximizing this benefit up to the match each year to help grow your retirement account(s). If you are not sure what benefits your employer offers, contact your Human Resources department. Ask about the following:
- 401k Employer Matching Contributions
- HSA (Health Savings Accounts)
- Insurance Plans
- Any other benefits like commuter or reimbursement, location pay, etc.

Contingency or Rainy-Day Fund: We recommend our clients set aside 3-6 months of expenses in case of an emergency. For example, if you suddenly needed to replace your car, you would have funds accessible without your day-to-day finances being heavily impacted. We sometime see clients over-saving for emergencies. Doing so means you have less money to place into investments. Remember, the goal of this fund is to ensure you will be able to maintain the first three items of the checklist.

Saving for Future Goals: Once you have completed steps 1 - 4, you are ready to consider the future. What goals do you have and how do you strategically save for them now? Examples include providing for your children’s education or starting to grow your investment accounts in a meaningful way. Once you’ve reached this step, the complexity increases and accounts must be analyzed with greater scrutiny to ensure you are set up for success. For example, if you are saving for education, is it best to open a 529 account or a UTMA for your children? For personal investments, is there a benefit to opening a ROTH IRA? This is when professional advice should be sought to ensure the best possible outcome.

Learn to Embrace Productive Debt: Often people hear that debt is bad and the first thing you should do is eliminate it. Well, this isn’t always the case, some debt, for example a low-rate mortgage, can be beneficial if you can leverage it correctly.

Yearly Look at Tax Optimization: As you move up in tax brackets, planning becomes increasingly complex. It is beneficial to see how you can optimize your tax impact and lower your potential tax exposure. This can be as simple as contributing more to your 401k as a tax-deferred account or by using strategies recommended by your accountant.

Legacy: Do you want to help your children or grandchildren during your lifetime? Do you want to leave a lump sum to them after you’ve departed? Is there a charitable organization or educational institution to which you would like to donate? Perhaps you’d like to do some, all, or none of these things. These are important questions that come up during financial planning. However, it’s important to have a good financial foundation before taking steps to implement your legacy plan.

Financial plans evolve throughout life. Having one is critical to get a sense of where you are, what your goals are, and how to achieve them. Our team is ready to guide you.