Navigating Volatility – Lessons from April 2025

April 2025 was a month marked by significant market turbulence, primarily driven by geopolitical developments and economic indicators.

In the first week of April, global equity markets experienced a sharp decline following the announcement of widespread tariffs by the U.S. government. The S&P 500 dropped approximately 12%, and the Dow Jones Industrial Average fell nearly 11%, erasing trillions in market capitalization.

However, the latter half of April saw a significant rebound. The U.S. administration announced a 90-day pause on most tariffs, leading to a surge in investor confidence. The S&P 500 recorded its strongest eight-day winning streak since November 2020, rising nearly 12% since April 8.

Despite the recovery in equities, other asset classes displayed divergent behaviors. Commodity indices, including oil prices, declined and did not participate in the subsequent recovery, reflecting ongoing concerns about a potential slowdown in the real economy.

The bond market also exhibited unique dynamics. High-yield bond spreads widened significantly, indicating increased investor concern regarding potential defaults. Additionally, the U.S. sovereign Credit Default Swap (CDS) spread increased during April, suggesting heightened perceptions of risk associated with U.S. government debt.

Examining the 'price of risk' across different markets provides further insight. In the equity market, the VIX index, a proxy for investor fear, peaked at 52.3 on April 8, the highest since the pandemic in March 2020, before declining as equities recovered. Conversely, bond default spreads remained elevated, suggesting persistent concerns among bond investors.

Key Takeaways:

• Market Resilience: Markets can recover rapidly from sharp declines driven by negative news.

• Market Unpredictability: Predicting short-term outcomes based on headline news often proves unreliable.

Successfully navigating volatility isn’t about forecasting swings—it’s about sticking to a sound long-term plan grounded in your goals.

Sources: Reuters, AP News, MarketWatch, World Bank, Janus Henderson, AllianceBernstein

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Metta Associates's Strategic Reflection

At Metta Associates, we remain focused on long-term financial planning and behavioral discipline—both especially critical during periods of volatility like April.

Our portfolios are built using global, multi-asset ETF strategies guided by top-down allocation and valuation discipline, helping us navigate short-term fluctuations with clarity.

We follow a liquidity-first approach and time-segmented planning, supported by downside risk testing to keep your financial plan resilient. We don’t trade on headlines—we rebalance according to strategy, ensuring every move serves your long-term goals.

The recent turbulence reminds us of the value in staying anchored to a personalized plan, trusting the process, and avoiding impulsive decisions. As always, we continue monitoring the landscape to ensure our strategy supports your long-term objectives.

Always with You.

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Disclaimer

This content is intended for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instruments. It does not consider your specific investment objectives, financial situation, or needs. You are encouraged to consult a licensed financial advisor before making any financial decisions.

The information presented is based on sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. This material does not represent a forecast and should not be interpreted as a guarantee of future outcomes. It has been prepared with care and objectivity to support long-term, planning-focused financial decisions.