Affinity Capital Market Flash April 4, 2025 | Affinity Capital

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.

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.
August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.
July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.