Recent Market Performance: Highs and Headwinds
As we approach the end of the year, financial markets are presenting a fascinating contradiction. Major U.S. indices, including the S&P 500, Dow Jones, and Nasdaq, have reached all-time highs, fueled by strong corporate earnings and the transformative impact of artificial intelligence. However, this robust rally has been accompanied by persistent and sometimes sharp volatility.
Market volatility, as measured by the Equity Market Volatility Tracker, has fluctuated notably in recent months:
- October 2025: 15.99 (up from 14.83 in September, but down from 20.82 in August)
- Financial Crises Index: 1.03 in October (down from 2.06 in July)
- Labor Market Volatility: 6.15 in October (down from 10.28 in August)
These figures illustrate a market that, while strong, remains highly reactive to economic data, policy changes, and global events. In fact, the last few trading days have witnessed 1-2% declines in most equity and alternative markets with the S&P 500 down approximately 2% in the past week. For comparative purposes, fixed income markets are flat to slightly positive this week.
Why Volatility Isn’t the Enemy
Periods of high market performance often coincide with heightened volatility. The current environment is driven by:
- Central bank policy shifts (interest rate uncertainty)
- Geopolitical events and trade policy changes
- Investor sentiment swings (behavioral biases and reaction to headlines)
- Technological disruption (especially in AI and tech sectors)
- High valuations (S&P 500 trading at ~22x forward earnings)
This environment can test even the most seasoned investor’s resolve. But as many of you have heard in volatile times in the past, volatility is not a sign that something is broken. It’s a feature, not a bug, of long-term investing.
The Value of Staying Disciplined
Over the years, we’ve weathered many storms together…Remember tariffs, interest rate increases, and the big tech scrutiny in 2018? What about the Q1 2020 COVID market downturn? In 2022, both the US stock and bond markets were both down in the same year for only the fifth time in history. Then we had tariff concern 2.0 earlier this year which continues to persist! Amid these uncertain times, those who had properly planned were much more likely to remain disciplined through volatility. Those same individuals and families have continued achieving their long-term goals and then some.
This philosophy is echoed in our approach at Kinetic Wealth:
- Diversification across asset classes and geographies
- Regular rebalancing to maintain target allocations
- Low-cost, tax-efficient investing keeps costs low and takes advantage of tax savings through planning
- Personalized risk management aligns portfolios with your comfort and goals
- Humility is accepting that no one can consistently predict the future, but we can leverage the concepts of risk and uncertainty to our advantage
Historical Lessons: Why “Staying the Course” Works
Looking back, every period of significant volatility, be it the Dot-Com Bubble, the Great Recession, or the COVID-19 crash, has rewarded those who stayed invested and maintained their plan. Market corrections of 10–15% are normal and healthy parts of the cycle.
Although markets are oftentimes bumpy, it may be surprising to see what markets have done so far this year:
Performance Figures: Kinetic Wealth Equity, Alternatives, and Fixed Income results year-to-date as of November 7th, 2025 as compared to a general 60/40 portfolio (VSMGX) and S&P 500 (SPY). Keep in mind that past performance in no way indicates future results, and just like anything in life, investing involves risk. Risk should be measured and leveraged based on each investor’s personal circumstances, and we thoroughly enjoy helping our clients do so. Please reach out with any questions about markets, risk, and / or performance as we are eager to serve you and help you gain knowledge and confidence in your investment strategy and financial plan.
And as we have discussed over time, the difference between a successful long-term investor and one who falls short is rarely about picking the best stock or timing the market. It’s about having the discipline to:
- Stick to your plan when headlines scream panic
- Rebalance, not react when markets swing
- Focus on your personal goals, not market noise
Gratefully so, we are here to help you do these things.
Practical Steps for Investors Today
Here’s how we help you stay the course:
- Review your plan: Are your goals, risk tolerance, and time horizon still accurate?
- Rebalance as needed: Let’s use volatility as an opportunity to buy low and sell high within your target allocation. In addition to regular rebalancing and keeping you on track, we can explore ways to produce tax advantages through strategies like tax-loss harvesting.
- Ignore the noise: Remember, markets are forward-looking and often overreact to news - discipline pays.
- Lean on your advisor: Whether you’re considering a Roth conversion or a more aggressive allocation in taxable accounts, let’s make decisions based on your plan, not emotions or predictions.
Final Thoughts
Volatility is inevitable, but panic is optional.
By focusing on long-term discipline, diversification, and your unique goals, you can navigate even the most unpredictable markets with confidence.
If you have questions about your plan or want to revisit your portfolio’s alignment with your goals, don’t hesitate to reach out. As always, we’re here to help, no matter the “crise du jour.”