May 2025 Newsletter

Waterstone May 2025 Newsletter: Tarriff-ing News

Uniquely Waterstone for our unique Waterstone clients 

In this Issue: 

• Speedometers adjust to neutral
• 5 strategists – dynamic, adaptive
• Volatility at the PGA Masters!
• Life Planning’s 3 questions – focus on the meaningful
• Josh DeJohn completes Behavioral Finances Advisor tm, BFA tm
• Unlockingny.com – Erie Canal @ 200 yrs

CNR May Speedometers: Neutral or the edge of neutral CNR.com/insights

Strategists say……

1) CNR thinking (4/29): 

• Tariffs have introduced a new structural risk clouding the near-term outlook.
• Tariff drag on earnings growth in this current strong economic base. The real risk is a demand shock resulting in lower spending activity.
• The Fed’s job is to monitor the inflation impact and set policy accordingly.

Strategy:  Uncertainty remains high. Investing focuses on quality and valuation.

2)  JPMorgan (4/8) Reallocation -   The U.S. administration’s announcement of broad tariffs is further increasing economic uncertainty. As the impact of these tariffs unfolds, along with the potential for retaliation from trading partners, corporate earnings may face headwinds. In response to this environment, the portfolios are balancing risk exposures by adding more quality fixed income.

3)Clark Capital Fixed Income (4/11) Reallocation - After having recently reduced risk by selling high yield bonds and allocating to U.S. Treasuries, our models are now turning even more cautious and allocating to cash equivalents.

4)Julex Capital (5/2) Reallocation - In line with the RiskSwitch™ (adaptive) model's partial risk-on recommendation, the portfolio will allocate 50% to equity sectors and 50% to U.S. aggregate bonds, Treasury Inflation-Protected Securities (TIPS), Treasuries, and T-bills. To reflect shifting sector momentum, we will close positions in energy, large-cap value, and real estate, and add large-cap growth, consumer discretionary, and mid-cap growth sectors.

5) Beaumont now Algorithmic Investment Models/ AIM (4/22):

The overall allocation of the Profile 3 Model will remain 50% fixed income (a mix of short and intermediate duration bonds and short-term TIPS), 30% US equity, 10% global equity and 10% developed intl equity. Equity exposure will be in technology and natural resources sectors and broad value-oriented global equities.

Volatility shows up throughout life!

Rory McIlroy became the first golfer to win the Masters with FOUR double bogeys. I’m sure he would’ve liked to take a smoother ride to completing the grand slam.

Rory’s volatile last round reminded me a lot of the markets in 2025 - massive swings in either direction.

While Rory’s final round provided incredible drama, clients were likely less entertained by the market volatility. Rory reminds us that professionals play their game based on 5 Ts for long term success:   talent, temperament, training, tools, time. Our investment partners navigate on our behalf.

And for fun!

In a remarkable revelation, every horse competing in the 2025 Kentucky Derby is a descendant of the legendary Secretariat. Wow!

As we watch the world work through new variables, get your own world in good order.            

Kinder Institute of Life Planning   RLP®

Pause for thought about these three questions.  It’s easy to just blow by until you hear a message such as “You have cancer.”

Jonathan Clements, editor of Humble Dollar, WSJ contributor and author of article, “No Retirement for Me, I saved and planned for a long one.  Then I heard from my doctor.” appears in several publications.  Yes, he has aggressive cancer with likely less than a year to live.

Here are some key points from his real-life decisions.

1. Enjoy the day – don’t sweat the small stuff. (Leave the market to the pros.)
2. Stay focused on what matters. For him it is financial security, time with family and friends, meaningful work that makes a difference.
3. Eye the bucket list with practicality.
4. Get the house in order….figuratively and literally. Don’t leave a mess.

https://truthseekersjournal.com/no-retirement-for-me/

So, pause for thought about these three questions with hopes you are at question 1.  Waterstone is part of your life support team.  We can help with focus and implementation. Waterstone is more than money.