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Carnegie Investment Counsel

Carnegie Investment Counsel
Carnegie Investment Counsel is an Registered Investment Adviser (RIA) providing personalized financial guidance to help you preserve and grow your wealth, so you are freer to enjoy your life. As your fiduciary, we are obligated to place your investing success ahead of our returns.
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Monthly Market Commentary: May 2025 (Clone)

Posted by Carnegie Investment Counsel on May 2, 2025 9:28:27 AM

What We’re Watching in May

As the first quarter of 2025 experienced relative calm in the financial markets, April surprised investors with sharp pullbacks, increased volatility, and rising investor worries. While market swings are nothing new, the reemergence of tariffs, one of the Trump administration’s policy tools, has added uncertainty in the minds of investors and business leaders. For many, this month felt less like a typical bump in the road and more like a sudden derailment.

At Carnegie, we see this moment as a valuable reminder that staying grounded in the face of short-term noise is critical to long-term investing success.


Take Advantage of Volatility

Much of April’s market volatility was driven by economic headlines, specifically by the administration’s aggressive push to reimpose and expand tariffs on key trade partners. The renewed tariff strategy, which largely targets China, Mexico, and Canada, but with ripple effects across Europe and smaller trading nations like Vietnam, has caused market concern.

Tariffs don’t just affect trade flows. Tariffs can cause inflationary pressure, disrupt supply chains, and make long-term corporate planning decisions difficult to make. However, this is not a new problem. It’s a new version of an old one, exactly what markets dislike most, uncertainty.

We are also watching the growing disconnect between the Trump administration and the Federal Reserve. For the first time in decades, we’re seeing a stark policy divergence between the White House actively intervening in trade and the Fed which is trying to stay the course on inflation and rates. The result adds an additional layer of complexity to an already challenged market environment.

We’ve said in the past that volatility isn’t the enemy, it’s part of the journey. From pandemic shocks to trade wars, from interest rate hikes to political infighting, markets always find a reason to react. What matters isn’t the news cycle, it’s how you respond.

Fear is Natural, but Not Always Rational

As volatility rose over the past month, we frequently took calls from clients asking the same question: “Am I going to be okay?” Fear is a natural response to the information people consume in the financial media, particularly when they closely monitor their investment account balances on a daily basis.

At the end of the day, the answer is a resounding ‘yes'. You will be okay, given you stay true to your investment strategy. The benefit of thoughtful portfolio construction is that it accounts for times like this. Many clients hold a year or more of cash or fixed income reserves, which means they aren’t forced to sell stocks in down markets. That buffer provides time and flexibility, reducing the pressure to make rash decisions.

As seen in the chart below, with the exception of the two longest recessions of 1973 and 2008, markets recovered almost fully by the time the recession ended, strengthening the argument that emotion-driven reactions during peak panic lead to worse outcomes for investors.

Navigating Corporate Earnings

We’re more than halfway through Q1 earnings season, and if there’s a theme, it’s uncertainty. Some companies are offering dual forecasts, while others are holding guidance steady but with heavy caveats.

Large financial institutions, such as JPMorgan and Goldman Sachs, have held up thanks to strong trading activity. However, this may be a year where earnings are a ‘throwaway’, with more attention now shifting toward expectations for 2026. In an environment shaped by tariffs and rate speculation, near-term guidance can only go so far.


The Fed’s May Meeting

The Federal Reserve is scheduled to meet in early May, and investors are focused on what the FOMC will do with interest rates. Despite the tariff-induced inflation risk, the market still expects the Fed to hold steady this month, with rate cuts likely deferred to June or later.

If you consider one of our favored indicators, the CME FedWatch, the forecast hasn’t wavered much. Even with the recent noise, inflation expectations remain the same. The 5-year forward inflation rate, a Fed indicator, continues to trend lower.

At the same time, the policy gap between fiscal stimulus and monetary restraint is widening, and that tension is likely to persist.

Conclusion: Revisiting the “Why”

April’s market turbulence offers investors a moment of pause, not panic. The markets will always cycle through phases of uncertainty. What allows investors to weather those phases is clarity: knowing why you’re invested the way you are and trusting in the discipline behind that strategy.

At Carnegie, we remain committed to helping you navigate short-term storms without losing sight of long-term goals. Whether it’s volatility, politics, or policy surprises, our approach remains grounded in research, discipline, and a deep understanding of your financial priorities.

Chart of the Month

For every single recession, the stock market tends to recover by the time the recession ends. About half the time the market is back above breakeven by the end of the recession.

 

Conclusion: Revisiting the “Why”

April’s market turbulence offers investors a moment of pause, not panic. The markets will always cycle through phases of uncertainty. What allows investors to weather those phases is clarity: knowing why you’re invested the way you are and trusting in the discipline behind that strategy.

At Carnegie, we remain committed to helping you navigate short-term storms without losing sight of long-term goals. Whether it’s volatility, politics, or policy surprises, our approach remains grounded in research, discipline, and a deep understanding of your financial priorities.

 

Carnegie in the Media

Halter: ‘Big Believer’ in JPMorgan (JPM), Bank Earnings Breakdown
Schwab Network | Greg Halter

Trump Wants RFK Jr. To 'Go Wild' On Health Care. What This Means For Biotech Stocks. 
Investor's Business Daily | Shams Afzal

The Impact of Tariffs on the Global Auto Industry
Bloomberg | Shams Afzal

 


Disclosures: For general informational purposes only. Opinions referenced are as of the date of the email and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. The information has been obtained from sources we believe to be reliable, but Carnegie has not independently verified the accuracy or authenticity of the information. The discussions, outlook, and viewpoints featured are not intended to be investment advice and do not consider specific investment objectives or risk tolerance you may have. All investments involve risks, including the loss of principal.

Reference to Indexes: An index is a group of specific securities (such as the S&P 500, Dow Jones Industrial Average, and Nasdaq composite), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is neither a guarantee nor indicative of future results.

Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. For a more detailed discussion about Carnegie’s investment advisory services and fees, please view our Form ADV and Form CRS by visiting:

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Topics: Market

Monthly Market Commentary: April 2025

Posted by Carnegie Investment Counsel on Apr 1, 2025 8:30:00 AM

What We're Watching in April 2025

 

Tariffs: A Familiar Headwind with New Implications

Tariffs are once again making headlines — and history offers important perspectives. In 2018, during the first Trump administration, when tariffs were first introduced on a wide scale, markets reacted with caution but quickly digested the implementation once the total amount was clearly defined. Today, a similar narrative is unfolding, though this time the effects are more pronounced — not because tariffs have been enacted, but because of the uncertainty on the final outcome this past month.

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Topics: Market

Tax Season Prep: Planning Before the Deadline

Posted by Carnegie Investment Counsel on Mar 18, 2025 2:51:39 PM

As the April 15th tax filing deadline approaches, March is the ideal time to revisit your tax strategy, especially for families with trusts or more complex financial situations. By proactively addressing key tax areas, you can potentially reduce your tax liability and better position yourself for future financial success. Here are five essential tax strategies to consider this season:

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Topics: Financial Planning

Monthly Market Commentary: March 2025

Posted by Carnegie Investment Counsel on Mar 3, 2025 9:30:00 AM

One of the most anticipated aspects of President Trump’s proposed tax policies is curtailing taxes on Social Security earnings, tips, and overtime pay. The proposed budget makes no mention of these structural taxation changes for these income streams, and it remains to be seen if it is addressed in the upcoming negotiations related to the extension of the Tax Cuts & Jobs Act provisions.

President Trump’s tax plan proposes favoring specific forms of income. Initial projections from the Institute on Taxation and Economic Policy (ITEP) group show the upper two brackets of earners will benefit, as these households are more likely to take full advantage of the carve-outs. Meanwhile, lower- and moderate-income households may see little benefit due to existing exemptions and the progressive tax structure. While details remain subject to legislative negotiations, these potential changes will be closely watched to assess their long-term implications. Source: https://itep.org/a-distributional-analysis-of-donald-trumps-tax-plan-2024/ 

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Topics: Market

2025 Heckerling Insights

Posted by Carnegie Investment Counsel on Feb 25, 2025 3:28:34 PM

The Heckerling Estate Planning Institute, sponsored by the University of Miami (Coral Gables) School of Law, was held in Orlando, FL, the week of January 12th. This was the 59th consecutive year of the conference, bringing together more than 4,100 attendees, consisting of wealth managers, probate attorneys, accountants, life insurance professionals, trust officers, charitable planned giving officers, financial planners and IRS Estate and Gift Tax Agents. Heckerling is the largest such gathering and has long been regarded as the Platinum Standard for practitioners representing clients throughout the U.S. and abroad. Each session is conducted by a distinguished probate practitioner or law school scholar. Discussed below are some of the current pressing topics of interest to clients served by Carnegie Investment Counsel.

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Topics: Financial Planning

Federal Solar Tax Credit for Savvy Investors: Save With the Sun

Posted by Carnegie Investment Counsel on Nov 1, 2023 9:00:00 AM

As the world increasingly embraces sustainable energy solutions, the popularity of solar panels has soared for both residential and commercial energy generation. Beyond the environmental benefits, solar energy offers a plethora of tax incentives , like the federal solar tax credit, that can significantly bolster the financial position of savvy individuals. 

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Topics: Taxes

Successful Financial Planning During Divorce: Building a Secure Future

Posted by Carnegie Investment Counsel on Oct 18, 2023 9:30:00 AM

Divorce can be emotionally and financially challenging, but with careful financial planning during divorce, you can navigate this difficult phase with confidence. Here are the financial strategies you need to get through this arduous time and build a secure future.

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Topics: Financial Planning

Are You Raising Financially Responsible Children? 6 Tips to Empower the Next Generation

Posted by Carnegie Investment Counsel on Oct 4, 2023 10:00:00 AM

As a parent, you want to prepare your children to navigate the world confidently, and that includes the world of money. Instilling healthy financial habits from an early age will help set them on the path to being financially responsible children. But how do you know if you’re instilling those essential habits? Here are six tips: 

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Topics: Financial Planning

Early Retirement: Strategies and Factors to Consider

Posted by Carnegie Investment Counsel on Sep 6, 2023 1:37:00 PM

Early retirement can be an enticing idea, but it requires careful consideration and planning.

Retirement…the golden phase of life that many of us aspire to achieve, where we can bid farewell to the daily grind and embrace the freedom to pursue our passions. Yet there is a lot to consider before making the leap, even if you have the financial resources available. 

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Which Retirement Savings Account Is Right for You? Optimizing Retirement Savings

Posted by Carnegie Investment Counsel on Aug 25, 2023 9:45:37 AM

What do you see when you envision your retirement? Are you on a sailboat in the Mediterranean? Baking cookies with your laughing grandchildren? Starting up that small business you were always passionate about? Writing that book like you always wanted? Realizing your dreams requires financial resources and a well-structured plan that optimizes savings and minimizes tax burdens.

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