Market Flash April 4, 2025

April 4, 2025

We woke up this morning to another market sell-off. Our main point this morning is for you to not equate your portfolios to the major market indices . We believe   our portfolios are well positioned for this sell-off and we see great opportunities for long-term investors.  There are a lot of numbers within this Market Flash , but we trust that they are presented well. Prior to yesterday, we averaged 25% to 30% in cash, much of it due to sales of technology heavy funds throughout the first quarter. We took advantage of yesterday's sell-off to reposition our portfolios.

 

As we write this morning, our Affinity Capital Income & Appreciation & Capital Appreciation Portfolios are averaging (-1.37%) versus (-4.16%) for the S&P 500 for the morning. An advantage of 2.79% or a 67% ratio to the Index. Mentioned below: While we would like to see some support in the markets around these levels, we could be at the bottom of this sell-off or the top of the next leg and experience tells us that gravity is quite a weighty force!

 

Portfolio Notes:

  • We remain on average 20% in Cash

  • We are out of Small and Mid Cap positions (See Russell 2000 Index performance below)

  • We average 30% to 40% in Fixed Income (Bonds)

  • We added partial positions of high-quality individual stocks to our portfolio. 4 of 5 were positive for the day yesterday.

 

Your portfolios are well positioned for this sell-off and we see great opportunities for long-term investors. As we speak with friends in the investment community as well as others with accounts elsewhere, the consensus is to "just ride it out". The math is simple, over time, it is much more difficult to recover from losses than participate fully in a bull market. We will be working hard to position your hard-earned assets for long-term common-sense income and growth.

 

As noted in our Affinity Capital Market Flash on Tuesday with a quote from our Comment on March 10th:

 

Throughout the first quarter we have been selling mostly technology-related positions and building up cash in our client accounts, averaging 25% - 30%. As noted in our previous  Affinity Capital Market Flash  of March 10th    Market Flash | Affinity Capital , our view on the major market indices was as follows:

  • The tech-heavy Nasdaq will likely see another 5% to 9% downside.

  • The Dow Jones Industrial Average has reached a support level. While we would like to see it hold here, the next drop could be another 4.5% to 5 %. For perspective that would be in the area of another 2000 points to the downside – which sounds a bit scarier than 5%

  • The S&P 500 may see another 5% to the downside.

 

Yesterday saw the major averages sell-off significantly:

  • The S&P 500 fell 274.45 points, or 4.8%, to 5,396.52.

  • The Dow Jones Industrial Average fell 1,679.39 points, or 4%, to 40,545.93.

  • The Nasdaq composite fell 1,050.44 points, or 6%, to 16,550.61.

  • The Russell 2000 index of smaller companies fell 134.82 points, or 6.6%, to 1,910.55.

 

As we write this morning; the major averages are again selling off. While we would like to see some support in the markets around these levels we could be at the bottom of this sell-off or the top of the next leg.

  • The S&P 500 is off -224.35 (-4.16%)  

    • This is a current support level

    • We see the next support level at another (-4.88%) to -(6.78%) to the downside

  • The Dow Jones Industrial Average is off -1,417.52 (-3.50%)  

    • Current support level is another (- 2.44%)

    • We see the next support level at another (-3.80%) to the downside

  • The Nasdaq composite is off -764.00 (-4.62%)  

    • Current support level is between this current level and another (- 2.44%) to the downside

    • We see the next support level at another (-5.62%) to the downside

  • ** Please note that these are not crystal ball predictions, they are simply target areas or mile-markers  used as just one piece of information to evaluate the markets.

 

To note a well-known quote among investors, "Be greedy when others are fearful and fearful when others are greedy."

 

Monday will tell us a lot about the markets going forward. We anticipate some clarity as we move to mid-year and into the 3rd quarter. As we have stated many times before, the markets are most fearful of the unknown. The optimistic view is that the tariffs are mostly negotiating tools and that as trading partners come to the table, a large number of agreements can be reached. Additionally, we believe the current tax bill in congress will be favorable to the markets. These are just two of many issues that face the markets, and we continue to be vigilant in monitoring those that affect your investments.

 

As always, please reach out with any questions or concerns. We welcome an opportunity to visit with you and appreciate the faith and confidence you have in Affinity Capital and our team.

Markets, Geopolitics, and Recent Volatility

January 21, 2026
Recent market headlines have been driven less by economic data and more by geopolitics. In particular, renewed discussion around Greenland and its strategic importance has introduced a new layer of uncertainty into global markets. Greenland matters not because of its size or population, but because of its location and resources. It sits at a critical crossroads between North America and Europe, plays an increasingly important role in Arctic shipping routes, and holds significant reserves of rare earth minerals that are essential for technology, defense systems, and energy infrastructure. As global competition for these resources intensifies, Greenland has become a focal point in broader strategic and trade discussions. Markets reacted quickly to this uncertainty. U.S. stock indexes moved lower in a broad selloff, with technology shares leading the decline. At the same time, investors shifted toward more defensive assets, pushing volatility higher, lifting gold prices, and pressuring risk-oriented assets such as cryptocurrencies. Similar caution was reflected in overseas markets as well. When geopolitical issues intersect with trade policy, markets tend to respond swiftly. Even the possibility of changes in tariffs, trade relationships, or diplomatic alignment can influence assumptions about global supply chains, corporate earnings, and economic growth. That is what markets have been digesting. These developments are now a regular part of the global environment. Markets today must absorb not only interest rates and earnings reports, but also geopolitical strategy, resource security, and shifting alliances. This can create short-term market adjustments as investors reassess expectations. Geopolitical uncertainty does not automatically translate into lasting economic damage. Markets have navigated trade disputes, diplomatic standoffs, and strategic realignments many times before. Over time, clarity emerges, negotiations evolve, and economic activity adapts. We continue to watch these developments closely and view them as part of the broader global backdrop in which markets operate. While the headlines may feel new, the underlying dynamic of markets responding to geopolitical uncertainty is familiar and expected. If you have questions about how global events fit into the bigger picture, we are always available to talk them through. Understanding the context behind the headlines is often the most effective way to stay grounded when markets react to evolving global issues.

The Policy Pivot: Key Takeaways for Investors

December 11, 2025
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Finishing 2025 Strong: Key Trends to Watch

December 1, 2025
As we move into the final month of 2025, markets are adjusting to a new mix of encouraging economic trends and lingering uncertainty. November ended on a softer note, but December has opened with improved sentiment, clearer expectations around Federal Reserve policy, and a more confident tone in both equity and fixed income markets. Investors are watching these shifts closely, and the weeks ahead will help determine how the year ultimately finishes. At Affinity Capital, we continue to see an environment supported by quality leadership, steady earnings, and more attractive income opportunities. At the same time, late-cycle pressures and uneven economic data remind us that thoughtful risk management remains essential. A More Constructive Tone to Start December December began on firmer footing after several weeks of mixed performance. The most significant driver has been the market’s growing conviction that the Federal Reserve is getting closer to the start of a rate-cutting cycle. Current pricing suggests a meaningful chance of a cut in the near term, which has helped lift sentiment across equities and high-quality bonds. This optimism has also supported areas that tend to benefit from lower yield expectations, such as precious metals and rate-sensitive parts of the market. While not a guarantee of what comes next, the shift toward more accommodative policy expectations has created a more balanced backdrop than we saw earlier in the fall. Economic Data Remains Mixed Despite the improved tone, the incoming data continues to show pockets of weakness. Manufacturing activity has contracted for another month, hiring momentum has slowed, and consumer spending has moderated from its pace earlier in the year. The recent government shutdown delayed several economic releases, and the catch-up process has added some short-term noise to the data stream. What stands out is the contrast between a resilient corporate earnings picture and a softer macro environment. Many large companies continue to report healthy margins and steady demand, yet the broader economic indicators suggest that growth is losing some steam. This type of divergence is typical in late-cycle phases and often results in more frequent market swings. Volatility Has Picked Up After months of historically low volatility, markets have begun to experience more frequent fluctuations. Concerns around artificial intelligence valuations, regional banking stress, and geopolitical developments have all played a role. Volatility is not necessarily a sign of structural weakness, but it is a reminder that investors should expect a less predictable finish to the year. For diversified portfolios, these swings can create opportunities to rebalance, harvest gains, or add exposure to areas that have repriced more attractively. They also highlight the importance of high-quality holdings that can withstand periods of uncertainty. Opportunities Across Equities and Fixed Income Even with the mixed data backdrop, the overall investment environment remains constructive for long-term investors. High-quality U.S. companies with strong balance sheets and consistent earnings continue to provide stability at the core of portfolios. Select small-cap and mid-cap companies have also begun to show signs of improvement as rate expectations shift. In fixed income, today’s yields offer significantly more value than they did for much of the past decade. Bonds once again contribute meaningful income, and the possibility of lower rates in 2026 creates potential for price appreciation in high-grade credit. This combination strengthens the case for balanced portfolios that include both equities and fixed income. Positioning Into Year-End Given the current landscape, we believe the market is moving toward a finish that is neither overly exuberant nor overly cautious. Several key themes are likely to guide performance over the coming weeks. Quality leadership continues to play an important role, especially in sectors tied to innovation, cloud infrastructure, and digital transformation Broad market exposure remains valuable in capturing the benefits of seasonal strength and earnings resilience Dividend-oriented and defensive holdings support stability in late-cycle environments High-quality bonds offer attractive income and diversification benefits Small-cap and mid-cap allocations may provide long-term upside as rate expectations shift Looking Ahead As the year comes to a close, investors are balancing two realities. On one side, there is growing optimism around potential rate cuts, resilient corporate earnings, and improving seasonal patterns. On the other side, there are signs of slowing economic momentum, higher volatility, and continued geopolitical uncertainty. The result is a market that rewards discipline, diversification, and a focus on long-term goals. At Affinity Capital, our approach remains steady. We continue to emphasize high-quality holdings, balanced allocations, and thoughtful adjustments based on data rather than emotion. The coming months will bring new information, but the principles that guide long-term success remain unchanged. We are here to help clients stay aligned with their plans and positioned with confidence as we move into a new year.