--- title: Investment Review Q1 2025 | Sanderson Wealth Management description: John Gullo summarizes the top financial stories of Q1 2025 in just five minutes. image: https://insights.sandersonllc.com/hubfs/ignacio-brosa-vJDbPuxUS_s-unsplash.jpg --- - [716.566.2420](tel:716-566-2420) - [Client Login](https://www.sandersonllc.com/client-login/) [![Sanderson Wealth Management](https://insights.sandersonllc.com/hubfs/Sanderson_October2019%20Theme/Images/sanderson-logo-stacked@2x.png)](https://www.sandersonllc.com/) - About - [Services](https://www.sandersonllc.com/services/) - [Our Team](https://www.sandersonllc.com/team/) - [John Sanderson](https://www.sandersonllc.com/team/john-sanderson/) - [Justin Sanderson](https://www.sandersonllc.com/team/justin-sanderson/) - [James Warner](https://www.sandersonllc.com/team/james-warner/) - [C. Michael Bader](https://www.sandersonllc.com/team/mike-bader/) - [Caleb Jennings](https://www.sandersonllc.com/team/caleb-jennings/) - [John Gullo](https://www.sandersonllc.com/team/john-gullo/) - [Timothy Domino](https://www.sandersonllc.com/team/timothy-domino/) - [Debbie Todaro](https://www.sandersonllc.com/team/debbie-todaro/) - [Karen Nicpon](https://www.sandersonllc.com/team/karen-nicpon/) - [Joe Bartelo](https://www.sandersonllc.com/team/joe-bartelo/) - [Phil Frattali](https://www.sandersonllc.com/team/phil-frattali/) - [Evan Kraft](https://www.sandersonllc.com/team/evan-kraft/) - [Tucker Weppner](https://www.sandersonllc.com/team/tucker-weppner/) - [Angelo Goodenough](https://www.sandersonllc.com/team/angelo-goodenough/) - [Regyna Taberski](https://www.sandersonllc.com/team/regyna-taberski/) - [Eric Weiher](https://www.sandersonllc.com/team/eric-weiher/) - [Cameron Radziwon](https://www.sandersonllc.com/team/cameron-radziwon/) - [Donna Schmitt](https://www.sandersonllc.com/team/donna-schmitt/) - [Amanda Melendez](https://www.sandersonllc.com/team/amanda-melendez/) - [History](https://www.sandersonllc.com/history/) - [Mission and Values](https://www.sandersonllc.com/mission-and-values/) - [Services](https://www.sandersonllc.com/services/) - [Private Wealth Advisers](https://www.sandersonllc.com/private-wealth-advisors/) - [Investment Consulting](https://www.sandersonllc.com/investment-consulting/) - [Financial Planning](https://www.sandersonllc.com/financial-planning/) - [Estate & Generational Wealth Planning](https://www.sandersonllc.com/estate-generational-wealth-planning/) - [Business Succession Planning](https://www.sandersonllc.com/business-succession-planning/) - [Philanthropy](https://www.sandersonllc.com/philanthropy/) - [Tax Consulting](https://www.sandersonllc.com/tax-consulting-2/) - [Prosper Financial Wellness](https://www.sandersonllc.com/prosper/) - Insights - [Market Snapshot](https://www.sandersonllc.com/current-market-snapshot/) - [Sanderson Insights](https://insights.sandersonllc.com/) - [Contact Us](https://www.sandersonllc.com/contact-us/) - [Careers](https://www.sandersonllc.com/careers/) # Investment Review for First Quarter 2025 by [John Gullo, MBA, CFA, CFP®, CIMA®](https://insights.sandersonllc.com/author/john-gullo-mba-cfa-cfp-cima) Apr 7, 2025 [Financial Planning](https://insights.sandersonllc.com/tag/financial-planning), [Investment Consulting](https://insights.sandersonllc.com/tag/investment-consulting) ## Diversification shines. At the close of 2024, diversification was a taboo topic that few wanted to discuss. With the magnificent seven stocks and the S&P 500 experiencing significant gains, the idea of investing in other asset classes was largely dismissed. However, just three months later, the conversation has shifted dramatically. Domestic stocks lost value in the first quarter of 2025, while foreign stocks and non-traditional assets experienced an increase. The most notable gains were in foreign developed stocks, commodities, and global infrastructure, which rose by 6.9%, 8.9%, and 7.3%, respectively. ## U.S. Dollar There are various methods to measure the U.S. dollar against other currencies. One common approach is the U.S. Dollar Index, which evaluates the dollar's value relative to the Euro, Japanese yen, British Pound sterling, Canadian dollar, Swedish krona, and Swiss franc. Last fall, the U.S. dollar surged as we approached the election and continued to rise through early January. However, recently, as foreign relations and trade tensions have escalated, the dollar has reversed course. It's important to remember that when the U.S. dollar rises, it negatively impacts investors holding foreign securities, whereas a falling dollar benefits these investors. In the fourth quarter of 2024, the dollar rose sharply, contributing to an 8.1% decline in foreign developed stocks. Conversely, in the first quarter of 2025, the U.S. dollar began to retreat, which helped foreign developed stocks rise by 6.9%.  ## Chinese stimulus. China has intensified its efforts to boost domestic demand in response to potential new shocks to overseas demand. The government has announced an overall increase in spending, raising the budget deficit from 3% to 4%, the highest level since 2010. This spending increase includes wage hikes for millions of government workers, which is expected to stimulate domestic consumption. Additionally, China is expanding its consumer goods trade-in program to cover more home appliances and electric cars, further encouraging domestic spending. To support the real estate and banking system, Beijing is allowing increased issuance of state and local government bonds.  ## European stimulus. Meanwhile, the European Commission has proposed allocating up to 800 billion euros for European defense and readiness, including a plan to borrow up to 150 billion euros to lend to national governments. This proposal comes amid doubts cast by U.S. leadership on NATO mutual defense clauses. Notably, Germany has recently passed a major reform to its constitutional debt brake, unlocking billions of euros in funding. Ultimately, trillions in investments could be committed across Europe, providing a substantial fiscal stimulus for those economies. ## Tariff talk. Although this newsletter primarily focuses on the first quarter of 2025, it is hard to ignore the tariffs announced on April 2nd. While the administration may have taken some liberties with the calculations used to determine the tariffs charged to the U.S.A.—calculated as the trade deficit with a particular country divided by the value of that country’s exports to the U.S.—there are clear trade discrepancies between our country and our trading partners. It is evident that the tariff increases announced this week for our largest trading partners were significantly larger than expected. When combined with other substantial changes to immigration, fiscal policy, and regulation, it is a lot for businesses, consumers, and investors to digest. There is significant debate on how this process is unfolding, and many believe these changes may significantly alter the global structure we have become accustomed to since the end of World War II. For decades, the U.S. has pushed to expand democracy, promote free trade, and influence the global financial system. Along the way, business profit margins have benefited from cheaper overseas labor, consumers have enjoyed cheaper goods made abroad, the dollar became the world’s reserve currency, and other nations financed our government deficits. Given the significant impact of these changes, it is crucial for investors to remain focused on their long-term goals and objectives, maintain an appropriate level of liquidity for their near-term needs, and avoid any impulsive reactions that could be harmful to their financial health.  ## Federal Reserve to the rescue? Over the past several years, many investors have looked to the Federal Reserve for help when there was distress in the financial markets. We have to remember, however, that the Federal Reserve has a dual mandate: maximum employment and price stability. In a speech on April 4th, Chair Powell had a few comments on the subject:  - The March jobs report shows the unemployment rate at 4.2%, which is in the low range it has held since early last year. Also, over the first quarter, payrolls grew by an average of 150,000 jobs a month. - Inflation has declined sharply from its pandemic highs of mid-2022 and has done so without the kind of painful rise in unemployment that has often accompanied periods of tight monetary policy needed to reduce inflation.  - More recently, however, progress toward the 2% inflation objective has slowed, with inflation rising to 2.5% over the 12 months ending in February. Lastly, and perhaps most importantly, during the question and answer portion of his presentation, Chair Powell stated that “Inflation is going to be moving up and growth is going to be slowing, but… it is not clear to me at this time what the appropriate path for monetary policy will be and we’re going to need to wait and see how this plays out before we can start to make adjustments.” Given his comments, it is unlikely that the Federal Reserve will cut interest rates soon to stimulate the economy or the stock market.   ## Disclosure This publication contains general information that is not suitable for everyone.  All material presented is compiled from sources believed to be reliable. Accuracy, however, cannot be guaranteed.  Further, the information contained herein should not be construed as personalized investment advice.  There is no guarantee that the views and opinions expressed in this publication will come to pass.  Past performance may not be indicative of future results.  All investments contain risk and may lose value.  © April 2025 JSG ### Let’s talk about your future. Schedule a consultation to learn more about our investment services. ## Filter Blog Posts ### SUBJECT - [Investment Consulting (166)](https://insights.sandersonllc.com/tag/investment-consulting) - [Financial Planning (150)](https://insights.sandersonllc.com/tag/financial-planning) - [Tax Consulting (44)](https://insights.sandersonllc.com/tag/tax-consulting) - [Estate & Generational Wealth Planning (15)](https://insights.sandersonllc.com/tag/estate-generational-wealth-planning) - [Firm News (11)](https://insights.sandersonllc.com/tag/firm-news) - [Lessons Earned (11)](https://insights.sandersonllc.com/tag/lessons-earned) - [COVID-19: Market Watch (10)](https://insights.sandersonllc.com/tag/covid-19-market-watch) - [Community (5)](https://insights.sandersonllc.com/tag/community) - [Philanthropy (4)](https://insights.sandersonllc.com/tag/philanthropy) - [Business Succession Planning (3)](https://insights.sandersonllc.com/tag/business-succession-planning) - [Prosper Financial Wellness (3)](https://insights.sandersonllc.com/tag/prosper-financial-wellness) - [Ukraine: Market Watch (1)](https://insights.sandersonllc.com/tag/ukraine-market-watch) See all ### AUTHOR - [Angelo Goodenough](https://insights.sandersonllc.com/author/angelo-goodenough) - [C. Michael Bader, Esq., MBA, CPA, CIMA®](https://insights.sandersonllc.com/author/c.-michael-bader-esq.-mba-cpa-cima) - [Caleb Jennings, MBA, CFP®, CIMA®, AIF®](https://insights.sandersonllc.com/author/caleb-jennings-mba-cfp-cima-aif) - [Cameron Radziwon, LSSBB](https://insights.sandersonllc.com/author/cameron-radziwon) - [Debbie Todaro](https://insights.sandersonllc.com/author/debbie-todaro) - [Evan Kraft, CFP®, CRPC®](https://insights.sandersonllc.com/author/evan-kraft-cfp-crpc) - [James Warner, MBA, CPA, CFP®, CIMA®](https://insights.sandersonllc.com/author/jim-warner-mba-cpa-cfp-cima) - [Joe Bartelo, CPA](https://insights.sandersonllc.com/author/joe-bartelo-cpa) - [John Gullo, MBA, CFA, CFP®, CIMA®](https://insights.sandersonllc.com/author/john-gullo-mba-cfa-cfp-cima) - [John Sanderson, CPA, CIMA®](https://insights.sandersonllc.com/author/john-sanderson-cpa-cima) - [Justin Sanderson, MBA, CFP®, CIMA®](https://insights.sandersonllc.com/author/justin-sanderson-mba-cfp-cima) - [Karen Nicpon, CPA](https://insights.sandersonllc.com/author/karen-nicpon-cpa) - [Phil Frattali, CFA](https://insights.sandersonllc.com/author/phil-frattali-cfa) - [Regyna Waterhouse](https://insights.sandersonllc.com/author/regyna-taberski) - [Sanderson Wealth Management](https://insights.sandersonllc.com/author/sanderson-wealth-management) - [Tim Domino, CPA, CFP®](https://insights.sandersonllc.com/author/tim-domino-cpa-cfp) - [Tucker Weppner, CFP®](https://insights.sandersonllc.com/author/tucker-weppner) ## Put our experience to work for your wealth. Schedule a consultation to learn more about our investment services. ## Background Schedule a consultation to learn more about our investment services. - [CONTACT](https://www.sandersonllc.com/contact-us/) - [CAREERS](https://www.sandersonllc.com/careers/) - DISCLOSURE - [COMPLIANCE](https://adviserinfo.sec.gov/firm/summary/118910) © 2022 Sanderson Wealth Management LLC [716.566.2420](tel:716.566.2420) Sanderson Wealth Management, LLC (“Sanderson Wealth”) is an SEC registered investment adviser located in Buffalo, New York. The publication of Sanderson Wealth’s website on the Internet should not be construed by any consumer or prospective client as Sanderson Wealth’s solicitation or attempt to effect transactions in securities, or the rendering of personalized investment advice over the Internet.  The information on this Internet site should not be construed as the provision of personalized individual advice from Sanderson Wealth. A copy of Sanderson Wealth’s current written disclosure statement as set forth on Form ADV discussing Sanderson Wealth’s business operations, services, and fees is available upon written request.  Sanderson Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided for convenience purposes and all users thereof should be guided accordingly. ACCESS TO THIS WEB SITE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS WEB SITE OR ANY THIRD PARTY WEB SITE LINKED TO THIS WEB SITE. × ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "John Gullo, MBA, CFA, CFP®, CIMA®", "url" : "https://insights.sandersonllc.com/author/john-gullo-mba-cfa-cfp-cima" }, "dateModified" : "2025-04-07T18:39:06.769Z", "datePublished" : "2025-04-07T18:39:06.000Z", "headline" : "Investment Review Q1 2025 | Sanderson Wealth Management ", "image" : [ "https://insights.sandersonllc.com/hubfs/ignacio-brosa-vJDbPuxUS_s-unsplash.jpg" ], "mainEntityOfPage" : { "@id" : "https://insights.sandersonllc.com/investment-review-q12025", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://insights.sandersonllc.com/hubfs/Sanderson_October2019%20Theme/Images/sanderson-logo-stacked@2x.png" }, "name" : "Sanderson Wealth Management" } } ``` ```json { "@context" : "https://schema.org", "@type" : "VideoObject", "contentUrl" : "https://stream.mux.com/k00701Y00en0000iMsgZGw6c3u7qvPb8avaxteHUoG02mmwbQ/capped-1080p.mp4", "dateModified" : "2025-04-07T18:22:21.553Z", "duration" : "PT6M", "height" : 1080, "name" : "2025-03-31 - Five Financial Highlights", "thumbnailUrl" : "https://5121789.fs1.hubspotusercontent-na1.net/hubfs/5121789/2025-03-31%20-%20Five%20Financial%20Highlights.mp4/medium.jpg?t=1744050141553", "uploadDate" : "2025-04-07T18:22:21.546Z", "width" : 1920 } ```