It has been said that "The world has been coming to an end since the day after the world began."
We humans tend to get a bit wound up where market downturns are concerned and the media is quick to pour fuel on our emotional fires by providing a seemingly endless supply of Armageddon theater. The better to keep us watching and clicking.
But no market downturn has yet turned out to be the end of the world. On the contrary, they have presented the cool and clear-headed with excellent opportunities to invest at discounts.
Five years ago, almost to the day, the world shut down during the height of the Covid-19 pandemic. If you recall, we did not know what would happen. There was speculation that we might lose 20% or more of the world's population.
I recall clearly having our groceries delivered and left outside to be sprayed with disinfectant before bringing them into the house. Masks, social distancing, public parks chained closed lest people gather and spread the malady. I am sure you all remember it well.
Also, I would like to extend my condolences to anyone who lost a loved one during that time or since. I lost my father and, owing to the lockdowns, we could not even have a gathering in his memory. It still hurts.
It was a bad time, but I understand. It was thought that it could turn out to be modern day bubonic plague that had the potential to wipe out civilization as we had come to know it. Thankfully, as terrible as it was, it did not turn out to be a worst-case scenario.
At the peak of fear and uncertainty in April of 2020, the S&P 500 cratered to approximately 2500, from around 3300 the prior January. That was a drop of about 27%. By August, just four months later, the market had rebounded, achieving a new all-time high and finished the year near 3800, up an astonishing 52% from the April low.
Five years later, even with our recent 12% correction, the stock market now stands at more than double its value from the bottom during the Covid crash.
Today, the pullback in the stock market has been attributed to the uncertainty surrounding tariffs. I understand it. In my almost three decades in the industry, I have observed that the markets usually prefer bad policy to unclear policy. The thinking being that at least you know what to expect and can invest accordingly.
As usual, the media wasted no time stoking fear with talk of trade wars, recession fears and warnings of increased inflation, slow economic growth, and pain for American workers. All or any of those things would certainly be bad. But I ask myself, "If tariffs were the destroyer of economies that the press insists they are, why have the countries tariffing U.S. goods not been destroyed?"
Let me be clear, I do not have any idea where the bottom is, and the volatility could last for some time or even contribute to a recession. But my gut tells me that levying tariffs on countries already tariffing U.S. goods and services might not be the end of the world. Particularly if we can reach some mutually agreeable terms with those countries in the short to mid-term. By orders of magnitude, tariffs seem small next to a global pandemic.
Therefore, I suspect that the world will continue turning on its axis, people will still want and need goods and services, and after a time we will be looking back on today and seeing it as an opportunity in disguise.
If you would like assistance in unmasking some of these opportunities, call me at (732) 844-3000. I am here to help.
Scott R. McGimpsey May 7th, 2025
Certified Financial Fiduciary®
This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Neither Cetera Advisor Networks LLC nor Scott McGimpsey is engaged in rendering legal, accounting, or other professional services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm.