2025 has had a rough start for stock investors, but the overall picture isn't as bad as it seems. While the S&P 500 is down 4.2% year-to-date (YTD) through Tuesday, the equal-weighted S&P 500 — which gives each stock the same importance — is only down 1.0%. That means the average stock has done better than the headlines suggest.  

More sectors in the S&P 500 are up this year than down. However, the overall index looks worse because the struggling sectors — especially tech and communication services — comprise a large index share. For example, 30% of every dollar in the S&P 500 goes to tech stocks, which have lost 12% YTD.  

In fact, 34% of your investment in the S&P 500 goes into just 10 companies. These same stocks led the rebound from the 2022 bear market — and are now pulling the index down. Although the S&P 500 is designed to offer broad diversification, it has become more concentrated over time, and that's showing its downside now.  

The market outlook is shaky but not hopeless. Trade policies like tariffs are adding to the uncertainty and could shift quickly. For now, the cautious approach is best. It's wise to avoid big moves until we get clearer signals from the market.  

Most importantly, in uncertain times, managing your cash needs is critical. Having enough set aside for upcoming expenses gives us the flexibility to stay invested without panic. If anything has changed in your situation, please reach out so we can adjust your plan accordingly.