Q2 2025 Market Reflections: Purpose, Planning, and Confidence in a Volatile World

As we step into the heart of summer and reflect on the journey through the first half of 2025, it’s safe to say this year has already been a whirlwind. If someone had left the financial world behind on January 1st and checked their portfolio again on June 15th, the surprise would likely be pleasant. Despite the noise, volatility, and uncertainty, the market has managed to stay afloat, and for many, that means gains and growth.

A Volatile Climb: The Market Snapshot

From a broad perspective, the S&P 500 is up over 2% year-to-date. That might not sound overly impressive at first glance, but considering the volatility we’ve faced — tariffs, a government shutdown, legislative wrangling over the so-called “big beautiful bill,” and other macroeconomic shocks — the resilience of the market is noteworthy.

But beyond domestic equities, something even more surprising has happened: international stocks have surged. After five to seven years of consistent underperformance compared to their U.S. counterparts, global markets have finally shown signs of life. The EAFE Index (which tracks developed markets outside North America) is up an impressive 16% year-to-date.

Bonds, too, are playing their expected role, offering a solid 2% return. For investors who prize predictability and stability, this behavior from fixed income is reassuring.

Still, as any seasoned investor knows, numbers only tell part of the story. What’s more important is how we interpret these numbers in the context of our personal financial goals, life values, and long-term plans.

The Real Investment Priorities: Freedom, Direction, and Confidence

At iWealth, we believe that successful investing isn’t just about chasing returns — it’s about aligning your financial decisions with your life’s purpose. As we navigate through the rest of 2025 and beyond, there are three guiding principles every investor should embrace: Freedom, Direction, and Confidence.

Freedom: Aligning Investments With Purpose

The first pillar is freedom — specifically, financial freedom that’s grounded in purpose. Rather than letting market performance dictate how we feel or act, we advocate starting with a meaningful conversation about what’s truly important to you.

Your investments should serve your goals, not the other way around. Whether you want to retire early, fund your children’s education, support charitable causes, or travel the world, those aspirations should shape your investment strategy. Freedom is not merely the absence of financial burden — it’s the empowerment to live a life aligned with your values.

As your financial partners, we’re here to help you clarify and refine those values, and then structure a plan that enables your investments to work toward that vision. Markets will always rise and fall, but your purpose is what gives your strategy meaning and stability.

Direction: Staying the Course With a Plan

The second pillar is direction. A well-crafted financial plan acts like a GPS — providing both a snapshot of your current location and a map toward your destination. Yet just like a GPS, your plan needs regular updates and recalibration.

Many investors drift off course because they respond emotionally to market swings. But with a strong plan in place, you can navigate the ups and downs without losing sight of your goals.

At iWealth, we see our role as more than just investment managers. We are your accountability partners, helping you stay on track even when the road ahead gets bumpy. That includes regular reviews of your financial dashboard — everything from portfolio performance and asset allocation to tax planning and life insurance needs.

If it’s been a while since you’ve reviewed your plan, now’s the time to do it. Use the summer as an opportunity to check in and make sure your direction still aligns with your long-term vision.

Confidence: Thinking Long Term in a Short-Term World

The third and perhaps most critical pillar is confidence. When the news is blaring headlines about economic uncertainty, policy disruptions, or geopolitical tensions, it’s easy to get swept up in short-term thinking. But as history has repeatedly shown, reactionary decisions often do more harm than good.

Some investors considered exiting the market when tariffs were introduced earlier this year. And who could blame them? The headlines were scary, the markets were choppy, and fear is a powerful motivator. But fast forward six months: the markets stabilized, portfolios recovered, and most investors who stayed the course are now sitting on gains of 2% to 10%.

That’s the power of long-term thinking.

Confidence comes from knowing that your financial plan is built for all seasons. It anticipates market corrections. It accounts for inflation. It incorporates risk tolerance. And most importantly, it’s customized to your unique needs and aspirations.

If you find yourself worrying more than usual or second-guessing your decisions, it might be time to revisit your plan — not to overhaul it, but to reinforce your confidence in it.

Diversification Still Matters

Although the U.S. market continues to be a stronghold for long-term investing, 2025 is proving once again that diversification matters. The unexpected surge in international stocks is a classic reminder of why we never want to put all our eggs in one basket.

It’s tempting to stick with what’s familiar — and for many investors, that means U.S.-centric portfolios. But spreading your assets across geographies, sectors, and asset classes not only helps reduce risk but also positions you to capture upside in unexpected areas.

We’re not suggesting a radical reallocation based on one strong year for international markets. Rather, we’re encouraging a thoughtful review to ensure your portfolio reflects both your goals and the evolving global landscape.

Summer Perspective: A Time to Reflect and Recalibrate

Now that summer is in full swing — especially here in Minnesota where lake days beckon — it’s a great moment to pause and reflect. The first half of 2025 has shown us that even in uncertain times, growth is possible. But more importantly, it’s reminded us of the importance of staying grounded in our values, our plans, and our long-term vision.

This season, we encourage you to:

• Schedule a review of your financial plan
• Revisit your personal goals and how your portfolio supports them
• Take stock of your investment allocation across U.S., international, and fixed income assets
• Reaffirm your confidence in your long-term strategy

And above all, enjoy time with friends and family. Purpose-driven financial planning isn’t about money for money’s sake — it’s about enabling the moments, relationships, and experiences that matter most.

Final Thoughts: Purpose Will Always Outperform Panic

As we move into the second half of the year, remember this: markets may fluctuate, but your purpose is your anchor. Don’t let short-term noise dictate long-term decisions. Stay focused on your plan. Trust the process. And lean on your financial team to help you stay aligned with what truly matters.

If it’s been a while since your last client review, let’s reconnect. Whether it’s refining your strategy, rechecking your financial GPS, or simply reinforcing your confidence, we’re here for you.

Here’s to a meaningful summer, steady progress, and a purposeful path forward.

Need to review your financial strategy or check in on your investment alignment? Contact our iWealth team — we’re here to help.