Labor Day fell on the earliest day it can (September 1) this year and for some reason, I feel as though it cut summer short. Fall is upon us here in Wisconsin and we are now in the final stretch of 2025. Let’s take a look at the data that came out this week and consider what’s worth thinking about as we near the end of a wild year

Jobs Week

There was a decent amount of economic data during this shortened week, largely focused on the labor market. On Wednesday, JOLTS was published. This report (detailing the number of job openings in the US economy) revealed 7.18 million openings, lower than expected 7.37 million. This was seen as a potential warning sign of slower hiring. On Wednesday, the ADP non-farm payroll report showed 54,000 jobs added by private businesses, well below the 106,000 reported in July and the expected 60,000. Both of these reports seem to provide cover for the Federal Reserve to lower rates and markets moved accordingly (with equities rising and yields falling). As Schwab’s chief fixed income strategist Kathy Jones commented, “The (ADP) report should solidify the expectations for a rate cut later this month and increase the odds of another cut this year.“

August’s Non Farm Payroll report is set to be released on September 5th and will provide another look into the labor market. And next week’s inflation prints for August will give the final data points in advance of the next Fed decision.

Things that Never Change

I just started reading a wonderful new book by one of my favorite thinkers, Morgan Housel. The book, Same as Ever, is subtitled A Guide to What Never Changes. It’s a collection of short stories and anecdotes about human behaviors, instincts, and lessons that remain constant in an ever changing world.

I appreciate the premise of this book a great deal, especially against the backdrop of 2025 where it seems like there is a endless chorus of change and chaos on many levels of society. With 24/7 news and media, were are encouraged to focus on what is changing minute by minute. Look back over the first eight months of 2025 – it has been A LOT! What if we were to focus instead on what is not going to change? In some ways, that is the more useful question since the future has been and will always be highly uncertain. We can’t predict what will happen next. However, if we focus on constants (that hold true in any future fact pattern), we can better prepare for any eventuality.

With that framework in mind, let’s look at three things that won’t change to help you level set your perspective and financial situation for the final four months of 2025 and beyond.

Firsthand experience is the best teacher

“You might think you know how it’ll feel. Then you experience it firsthand and your realize, ah , okay. It’s more complicated than you thought” – Morgan Housel

Theoretical exercises and mind experiments are no match for the scar tissue we develop by living thru challenging events firsthand. 2025 was a great example of this when it comes to risk tolerance assessment and investing. When setting investment allocations and plans for clients, I often model out the likely drawdown in certain historical market downturns (ie: in 2008, a portfolio of this composition would have declined 30%). Saying you would be fine with that risk during that exercise is one thing – but living thru a time where your portfolio does in fact fall by double digits is quite another.

You may have already forgotten, but 2025 gave us a great example of this constant truth. As we move into the final stretch of 2025 with markets near all time highs, take some time and think back to how you felt in mid-April. What were you feeling? Were you worried about being able to continue on your current financial path? Were you considering drastic action (ie: selling out of your investments)? Or did you take it all in stride, even putting more money to work? Use that first hand experience as a teacher and consider adjusting your cash balances, portfolio allocation, sector concentrations, or other items accordingly.

Expectations drive happiness

“Your happiness depends on your expectations more than anything else. So in a world that tends to get better for most people most of the time, an important life skill is getting the goalpost to stop moving” – Morgan Housel

This concept is true in virtually every area of our lives – including investing. It’s incredibly easy (and enticing) to anchor your expectations for your investments and their return off an ever-changing (and ever-rising) benchmark. Maybe you see a return for an index on the news. Perhaps you hear a neighbor talk about how they doubled their money over night in a single stock. Maybe you see a friend buy a lake home and think you need more money so you can get one too. Perhaps you view a social media story saying that a new investment approach can earn you x% a year.

Expectations are easily developed and easily swayed – and can be very dangerous. Why? There is nothing wrong with motivation and aspirations. However, if you keep in mind that happiness = reality less expectations, a world in which your expectations are far outpacing your reality is one in which you will struggle to ever be happy.

In investing, expectations need to be anchored to a reasonable and relevant metric. For many investors, it’s most useful to determine a rate of return that is in line with your risk profile and will help you meet your near and long-term cash flow needs. Know where you want to go – and then figure out what will get you there. “High as possible” or “matching an index that doesn’t follow my risk profile” are not useful expectations.

Before you pass judgement on 2025 one way or the other, spend some time determining your individual and specific expectations for your investments.

Risk is what we cannot see

“We are very good at predicting the future, except for the surprises – which tend to be all that matter” – Morgan Housel

2025 has been full of predictions – whether it be assumptions of the market path given the new political regime, the outcome of geopolitical events, or the likelihood of a recession. All of that is well and good but it’s important to remember that the risk – the real risk that could present drastic hardships for investors – are the things we can’t see.

This may seem scary but in many ways, this truth presents a great opportunity to prepare for risk now. Risk becomes most dangerous when we think we need to wait for a specific forecast to appear before we prepare for it. It serves us better to remember it will arrive at some point and simply prepare for it now.

As noted above, April of this year was a good example of this. It seemed like few, if any, predicted the fallout of the initial tariff announcements. Or consider 2020, when the whole world changed that March. How prepared did you feel? How did you manage? Both of those periods were short lived but what it the downturns had lasted years?

How can you prepare now?

Look at your savings level. If it feels a bit excessive in good times, you’re probably doing things right but evaluate it in context of your non discretionary spending and ability to sustain that in event you lose your job.

Look at your leverage. If it feels about right, it likely should be a bit lower but consider if you could maintain the debt service if your income ceased.

Look at your insurance levels. If it feels you may be over insured, you’re likely on the right track but review it with your agent and ensure tail risks and low probability/high payout items are covered.

If you have available lines of credit with zero balances, you will have access to cash if your income stops.

Based on the above, if your investment portfolio is highly unlikely to be needed to fund your life (based on emergency savings, low debt, worst-case insurance coverage, etc), the appropriate allocation will be different than if you will more than likely need to start withdrawing from saved funds in a downturn. Adjust as needed while you times are calm. You will not regret being prepared when the time comes – and the time will indeed come.

2025 has been an interesting year, full of things that are constantly changing. It’s somewhat comforting to know that some things will forever remain the same.

Onward we go,