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In times of market volatility, it can feel like every headline reflects uncertainty in the market. But we must remember there is a difference between the signal and the surrounding noise.
In the early months of 2025, the market has yet to determine if tariffs are a signal or just noise. This is driving continued uncertainty and market volatility.
How should we, as investors, deal with this uncertainty? We stick with our principles. CBIS’ value proposition is Catholic Responsible Investments. One aspect of being a responsible investor is maintaining discipline in the face of volatility. While there is noise in the short run, caused by reactionary investor sentiment, valuation wins in the long run.
The market’s immediate reaction to the tariffs imposed in early 2025 was negative, and many investors felt this was a game best observed from the sidelines. A key problem with that reaction is that equity-return streams are lumpy and discontinuous. Even in the face of adversity, the market can deliver strong returns.
Historically, leaving the market for even a short period of time can reduce an investor’s long-term returns. The difference in missing a small number of trading days over an almost 40-year period can impact long-term horizon.
Our message in the simplest terms: Stick to your discipline. This means abiding by your investment policy statement and maintaining your strategic asset allocation.
Diversification is your friend during volatile times. Your strategic asset allocation should be stable but not static. If the underlying fundamentals of the market shift, you should re-evaluate your strategic asset allocation. The most important thing investors can do during times of market turbulence is to rebalance to maintain their desired risk profile.
Important information
Before investing you should carefully consider the Catholic Responsible Investments Funds’ investment objectives, risks, charges and expenses. This and other information are available in the prospectus, or summary prospectus. Please read the prospectus carefully before you invest. The prospectus, or summary prospectus, can be obtained by calling (1) 866-348-6466.
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.
This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report.