REPLACE YOUR DOLLAR
Industry Update,
The stock market has gotten off to a slow start in 2025. Although the major indexes are within a couple percent of all-time highs, equities have been in a bit of a holding pattern over the last two months. The general outlook is still very bullish. President Donald Trump is the most pro-jobs, pro-business, anti-regulation and anti-tax president in modern history. In our opinion, this administration will benefit everyday investors in two ways.
First, Elon Musk and the DOGE team are actively cutting spending and doing their best to curtail waste and fraud. These actions, if carried out to their full extent, should reduce federal spending, lower the deficit and, in turn, reduce money printing and therefore lower inflation. Second, the new cabinet is taking decisive actions to make it easier to do business in America. Removing unnecessary red tape and creating incentives to produce products in the United States will be a long-term net positive for the economy and the stock market.
In the short term, however, these actions will cause temporary pain. Tariffs applied to our trading partners will hurt profits while the free hand of the economy adjusts to the new landscape. President Trump's proposal to cut military spending by 8% per year for the next five years will hurt the profits of large defense stocks, even though this action should benefit investors over the long-term. The stock market hates uncertainty. Periods of major adjustment like this almost always cause increased volatility and stall upward progress in the stock market. But we remain optimistic and expect to see higher prices by the end of the year.
RYD,
Ross Givens
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