Markets have been on a roller coaster, and investors are asking: Is a bear market on the way?1 Let's dive into what's happening and what it might mean for your portfolio. What's driving these market swings? In a word: uncertainty. Anxiety over a potential trade war is causing asignificant shift in business sentiment, with many corporate leaders concerned about a potential recession later this year.2 It’s a dramatic (and concerning) change from the outlook just a few months ago. Three key worries seem to be driving markets: 1. Tariff uncertainty is causing anxiety- Analysts are concerned that widespread tariffs could increase costs and disrupt many industries. Recent remarks from the administration had hinted at a more flexible approach to negotiations that could blunt the full impact of tariffs.3 However, recent comments from president Trump about reciprocal tariffs on all countries may have thrown cold water on those hopes. 2. Sticky inflation persists- Many economists don't expect us to hit the Fed's 2% target until 2026 or later.2 If inflation doesn’t moderate, the Fed may get cold feet about lowering interest rates further. This removes a tool in the toolbox of the Fed that they might normally use if we see economic growth slow. 3. Consumer spending is slowing- Fresh data shows Americans are tightening their belts as inflation and economic worries bite.4 Since consumer spending drives nearly 70% of the economy, this pullback raises real concerns. Thereare potential bright spots despite the noise Corporate profits remain strong, the labor market looks healthy and a potential cease-fire in Ukraine is certainly welcome news. Additionally, the push to strengthen domestic production could also unlock new opportunities in some sectors of the economy. Finally, we have seen a few recent market bounces, which tell us something important: investors are ready to respond positively to policy clarity. The stock market passed a major test last month when the S&P 500 successfully bounced off its March 13 low, offering a ray of hope to investors after weeks of turbulence. That level was challenged again the following Monday, when the S&P 500 dipped as low as 5,489 intraday, marking a 10.7% decline from its Feb.19 all-time high, before staging a rebound. By the end of the day, the index had clawed its way back into the green. For technical traders, the ability to hold the March low is an encouraging sign that the market may be carving out a bottom. What's next? The real test is on Wednesday April 2, when the Trump administration formally introduces potentially sweeping country-based tariffs in an event in the White House rose garden. Tariff announcements, plus reports this week on the health of the labor market will probably determine whether the next move is 5% up or 5% down. What could this mean for your portfolio? Market volatility can be unsettling, especially alongside economic uncertainty. It's perfectly normal to feel concerned when headlines turn gloomy. We don’t know what will happen next, but I know this: Emotional reactions to market movements often lead to missed opportunities. If you’re worried about what’s going on, please reach out—my role is to be your guide, thought partner, and a source of reassurance and perspective. Our job as investment advisors is to try to navigate this type of uncertainty, spot opportunities when they arise and stay nimble enough to adjust as circumstances change. And remember - diversification works. Most of our clients have exposure to asset classes other than US equities. Bonds are positive this year and commodities such as gold have also weathered the uncertainty well. Your investment strategy was designed to account for market fluctuations. If you are a Compass client, I want to remind you that your portfolio has been stress tested for times like these, to ensure short term volatility doesn't derail your long term goals. I'm not suggesting we put our heads in the sand. My team and I are watching these developments carefully and considering which tactical adjustments make sense for our clients. Need help navigating the uncertainty? Is your advisor simply telling you to "stay the course"? Not certain if your current portoflio is right for you given your age and years to retirement? Give our office a call and lets carve out a few minutes to talk. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal. No strategy assures success or protects against loss. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. | 
