Navigating Market Volatility

In our First Quarter 2025 letter, we suggested that ‘overly aggressive tariff policy’ could drive market volatility higher. But for stocks, it is less about aggressive tariff policy than it is about uncertainty.

Economic and trade policy uncertainty have shot higher in recent weeks, which has corresponded with elevated market volatility.

Market volatility is unnerving, but it is important to remember how costly it can be to react to short-term losses by taking unnecessary risks or selling at the wrong time. To navigate the uncertainty, we’re keeping focus on market drivers where we do have reliable information—corporate earnings, free cash flow, valuation multiples, consumer spending, the jobs market, etc.