What the Market Needs Now...Clarity & Confidence

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Clarity allows investors to focus on what matters, reduce noise, and make confident decisions. In the face of wide spread uncertainty and confusion, investors have an absence of financial market clarity and a crisis of confidence to contend with. In our current environment, where geopolitical tensions, economic uncertainties, and fluctuating interest rates dominate headlines, the stock market often finds itself in a state of volatility. Daily moves of 1% or more have become the norm. For example, there have already been 20 trading days this year when the S&P 500 moved more than 1%. There were only 19 all of last year. However, one consistent theme remains clear: increased clarity around economic policies, corporate earnings forecasts, and global events leads to greater investor confidence. By definition the future is uncertain. But, there are times when investors feel an increased sense of uncertainty. This is definitely one of those times, as most bear markets are. More on that below....

In the spirit of the '60's song, "What the World Needs Now is Love", the stock market now needs clarity and confidence. When investors have a less uncertain understanding of future economic conditions and corporate governance, they are gain confidence. Investors become more likely to commit capital to the market. This confidence can result in:

• Increased Investment Activity: Clear guidance from central banks and governments can encourage both institutional and retail investors to engage more actively, fostering upward pressure on stock prices.
• Stabilized Market Sentiment: When clarity prevails, market sentiment typically stabilizes, reducing fear and speculation. This stability often leads to a healthier investment environment conducive to long-term growth.
• Enhanced Corporate Performance: Confidence in the market encourages companies to make strategic decisions, invest in innovation, and focus on long-term goals, thereby potentially driving earnings growth.

As individual investors, your investment strategies can benefit from an environment characterized by transparency and predictability. It’s essential to remain informed and adaptable as we approach critical economic developments that could provide much-needed clarity. This is not easy, as daily headlines are moving markets. I firmly believe we need to focus on the trendlines, not the headlines. The stock market is the best indicator of the stock market.

I encourage you to stay engaged with your investment plan. Have a proper portfolio allocation consistent with your unique investor parameters and constraints. Consider the implications of market fluctuations with a clear perspective. Here is one with respect to the market's bottoming process: Tuesday all 100 of the Nasdaq 100 index were up. That has only happened 7 times in history. Each time the Nasdaq was higher 6 and 12 months later. On average, up about 20% six months later and near 25% after twelve months. The table below provides more perspective on the history of bear markets.

So far the 2025 bear market is 46 days long since the February 18 high. The S&P 500 was down more than 21% at its April 7 low.

John J. Gardner, CFP®, CPM®
Blackhawk Wealth Advisors
3860 Blackhawk Rd, Ste. 160
Danville, Ca. 94506
888.985.PLAN (7526)

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