by Kevin Slater, Lead Advisor & CEO

Summer in the Pacific Northwest means that any road you take will be under construction. Sure, the idea is to endure temporary inconveniences (misery?) as crews “improve” road surfaces, making them safer and more reliable for the long run. Unfortunately, it seems the Department of Transportation and I often have very different definitions of what “temporary” means, let alone “improve”.

In our chart of the month, we look back on the year-to-date performance of the four major indices, which reflect the largest portions of our portfolios. As a quick reminder:

S&P 500 tracks the stock prices of the largest U.S. companies
S&P 600 tracks small U.S. companies
MSCI EAFE tracks companies in developed markets outside of the U.S., such as Germany, France, Switzerland, Japan, Australia, etc.
Bloomberg US Aggregate tracks U.S. investment-grade bond prices.

It was a rough road for US stocks (both large and small) from late February to mid-April. International stocks have had a far better year, albeit with a big pothole in April.

The road looks invitingly smooth now, but have the underlying issues that caused the bumps been fully fixed? I don’t think so. There are still looming questions about tariffs, international relations, and U.S. fiscal policy. It is possible these issues are addressed without tearing up the road of the markets, so to speak, but I suspect we might experience more road repairs before the year is out.

We cannot accurately predict where the market potholes will appear, so we plan to remain invested and wait out the delays patiently as they arise. We may make some very minor changes to our investments later this summer, but they would be akin to using an adjacent lane moving in the same direction on the same road as opposed to choosing a different route altogether.

Please feel free to reach out to us whether the road feels smooth or bumpy, or if you are stuck watching road crews. We are in it with you for the long haul!