The S&P 500 Is Breaking Records

There’s an old Wall Street expression that suggests, “Markets climb a wall of worry.” This expression suggests that stock prices tend to trend higher in an up-trending market, similar to this year, despite all the negative noise.

This year, investors had many reasons to worry. Inflation was a concern, the presidential election was on the horizon, and geopolitical tensions were top of mind. Who could blame an investor for being “worried?” Yet stock prices rose, including numerous record highs.

As we head into 2025, investors face old concerns while weighing new “worries.” The Fed appears comfortable with the inflation trend, but the jobs market is a worry. The elections are over, but that’s given way to a new set of uncertainties. Geopolitical tensions seem to rise and fall, a pattern that may extend into 2025.

This year is just another reminder that worrying is not a strategy. Emotion-driven investing tends to be influenced by short-term events. An investment strategy that reflects your goals, time horizon, and risk tolerance can help you manage market volatility while putting you in a position to pursue your goals.

Warren Buffett has many wise words, but this is a favorite: “Don't watch the market closely.” It reflects his belief in long-term growth rather than reacting to short-term market fluctuations.