2023: 26% 2024: 25% 2025: 17% – these are the annual returns in the US stock market over the past three years. Historically speaking, these returns are nothing short of exceptional. And yet, if you read or watch any news story over the past few weeks, it is a drumbeat of negativity.

Don’t believe me? Here is the latest fear/greed index – keeping in mind that US equity markets are still within striking distance of their all time highs.

What’s causing this rapid decline in sentiment and the wild swings in markets? There is a laundry list to choose from. Here are a few

*Geopolitical unrest – concerns over Venezuela, Greenland, and Iran

*US unrest – Civil unrest from a variety of topics, most notably ICE, immigration, and yet another government shutdown

*Currency movements – decline in the US dolalr

*Commodity gyrations – parabolic moves (in both directions) by gold, silver, and other commodities

*Crypto unwind – sharp decline in Bitcoin and other crypto currencies, leading to considerable leverage and margin unwind

*AI spending – earnings reports from hyperscalers continue to show incredible estimates of cap ex spending (as an example, there are only 59 other companies Google’s estimated $180 billion cap ex spending for this year couldn’t buy)

*AI disruption – concerns over which companies may be rendered extinct by AI (this week’s victims – software companies)

*Earnings – earnings have come in ahead of expectations. But good news is no longer good news. Many companies (of all sizes) have been decimated on earnings due to future guidance being good – but not good enough

*Interest rates – Trump’s pick of Kevin Warsh as Chairman of the Federal Reserve is leading to concerns of overly aggressive rate cuts (and the potential follow-on effects of a lower dollar and/or higher inflation)

Clearly, you don’t have to look too far to find something to worry about. Are these concerns unfounded? Absolutely not. But are there counterarguments to each and every one of them? Absolutely.

Instead of obsessing about every negative newsflash, I thought it would be more helpful to lay out five valuable reminders

Things are never as good or as bad as they seem – It’s important to always remember that markets – and investor sentiment – overcorrect in both directions. The straight “up and to the right” parabolic gains are just as concerning and the “elevator down” declines. Neither are signs of a healthy and well functioning set-up. Markets have always removed the froth, cleared out excess/leverage, and moved on. Don’t believe. Pull up at 20+ year chart of the S&P 500. You will see the line moves up and to the right – not in a straight line – but the trend is clear

Short memories work for and against us – You’ve been in situations like this before – you’ve just forgotten how they felt. Remember last year’s Deep Seek shock? How about the Liberation Day tariff sell-off? How about COVID correction? You may have already forgotten these times and that’s a blessing. Short memories make it easier to stay invested. But they can be a detractor when a new volatile moment arises. You’ve been in uncertain times before. History may not repeat but it rhymes

FOMO is dangerous – FOMO (fear of missing out) is a new dynamic in markets – and one that presents great danger. The recent price action in Bitcoin, gold, and silver are all perfect examples. These assets largely trade on sentiment – as more and more people want to own them, prices march higher. This sparks others to feel they’re about to miss a trade of a lifetime and they buy, leading others to buy – and a momentum-laced trade is off and running – until it stops and moves the other way (made worse by the interplay of leverage). Bitcoin has already unwound ($130K to under $70K as of today). Silver fell 40% in a day last week. Sure, they had large gains leading up to those declines but what about the people that bought at the peak? Buyer beware

Breathe in, zoom out – My favorite investing mantra. Our world encourages short term thinking and rapid decision. Our brains are being re-wired to be very short term. Fight against this. If you live a long life, you will likely be an investor for six or seven decades. With that backdrop, panicking about what a stock or index does in a given week is likely not all that productive. Pull up your investment balance from 2000 or 2020..my guess is you’ll feel better

You don’t have to act – When things start to swirl around us, we are hard-wired by our genetics to act (the good old fight or flight instinct). Just remember – you don’t have to do something. If you’re reading this, you likely have a well thought out and executed investment plan based upon your objectives. You have likely been investing for years – if not decades. The markets and its constituents will gyrate by the second. Let them be. You already know what to do.

Onward we go,