As a younger person, I sought excitement, adventure, different experiences, people and places. However, now I almost yearn for predictable, comfortable, and sameness. Yes, give me that. The person who coined the phrase "may you live in interesting times" ... at times I want to beat with a large stick. I coined the phrase: "Old, dull and boring." Yes, give me that. The reality is that you are likely in life to have both at the same time... but you have to look for it.

During the past year, the following events took place:

• The stock of a leading U.S. computer tech manufacturer tripled.  This is crazy, not normal, and not a recommendation.
• The Fed reduced interest rates two times rather than the anticipated six times.
• The second Fed rate reduction in December (which everyone knew was coming) of 0.25% (or 25 basis points in financial speak) caused the stock market to go down almost 3%. Why?

 In truth, the rate cut did not cause the market decline but it was the comment from Chairman Powell, "due to the stickiness of inflation, the Fed may only reduce rates two times in 2025 rather the four times discussed earlier." This is what caused the market decline on that day.

• The VIX is a measure of stock market volatility and is commonly called the "fear index" by journalists. I think it would be better referred to as the "blood pressure index" since it measures both ups and downs in the market. In any case, one day last year the index went up one day by 175% -- if my blood pressure went up 175%, I would be "coding". Why the big change in one day you may be asking? You may not believe this, but the cause was, get this, the expiration of something called the "unwinding of a yen carry trade." If you understand, please explain it to me. This is NOT normal.
• And finally, the stock of a company that only invests in a certain cryptocurrency -and that is all it does, no products, no sales, no profits, it only buys and holds cryptocurrency - went up 480% during 2024. This also is crazy, not really normal nor is it a recommendation.
• Overall, both the stock and bond markets had stellar years - up from 10 to 23% depending upon the index--- despite the weakness during the weeks in December following the Fed meeting. So probably a great year for your accounts. This is not crazy good but NORMAL.

I could give you more details but I think you get the point. 2024 was filled with many surprises and disappointments that seemed to come out of the blue. But you know what? 2024 was really no different than most other years.

Can anyone remember 2022? Inflation went from less than 2% to 9%...not normal. This caused the Fed to implement the fastest, sharpest rate increases... not normal... that resulted in one of the worst declines for both stocks and bonds since 1937 --- this is not a typo. As an example, the S&P 500 was down almost 20% for the year... this is normal. Yes, it happens, not often, but it happens.

What about 2020? Markets start out the year reasonably well (as I was planning a trip to France) until a deadly hundred-year plague shut down the global economy followed by a 34% decline in the U.S. stock market in 33 days... not normal. Do you remember the comments about the VIX? During March of 2020, the VIX rose to 85. A normal VIX is about 13. Yes, this was crash cart worthy. WOW... that was crazy volatility. However, by the end of the 2020, the S&P 500 was up over 16% for the year - after going down 34% in March. Believe it or not, this is normal.

Layer on top of all these economic issues the massive political / geopolitical shocks:

• The war in Ukraine.
• Hamas's invasion of Israel and their response throughout the region.
• Sudden and total collapse of the 50-year regime in Syria.
• A sitting U.S. president steps down from a reelection campaign on grounds of reduced capacity 100 days before the election.
• The resounding presidential election of an individual awaiting sentencing in felony convictions.

In summary, over a short five-year period, the market crashed two times, inflation exploded to 9%, followed by unprecedented Fed rate increases, during a global pandemic, and massive unemployment, all the while, the S&P 500 (i.e. stock market) grew 81% (Dec 31, 2019 to Dec 31, 2024)... yes, rather normal. Never guaranteed... But normal.

One could go on and on. However, the take aways here are that:

1. The economy, markets, politics and geopolitics are for practical purposes unpredictable. The only constants are change and unpredictability. This is NORMAL.
2. If random, unpredictable events of any kind cause you to change your investment plan and therefore your financial plan, you never really had a plan and are inevitably doomed to fail as an investor. 

With the beginning of the new year, our suggestion is to meet or at least talk to us about your plans for the next year or two. How much money, if any, will you need from your accounts during 2025 and 2026. In other words, control what is controllable! Sell when markets are up to fund your cash needs for two years. Then allow the uncontrollable to flow around you but not overwhelm you.

Historically, (disclaimer, past performance in not an indication of the future) the stock market goes up 4 out of 5 years or put another way, 8 out of 10 years. Since we have no control over when those "bad years" will be occurring, the only way to financially thrive through down markets is to not overact and stick to your plan.  Accept that down-markets occur from time-to-time. Accept you cannot control or predict their timing. Plan your cash flow. Have cash / money market to fund your spending needs for two years. And position the remaining investments to grow to fund future needs, give to charity, or pass on to people you care about.

Allow me say what I just said in another way. The stock market is very predictable (never guaranteed) for investors that follow a disciplined approach of consistent investment over time. It has always gone up... just not every year. When it goes down... and it occasionally will go down... rest assured it will go back up and then higher again (my opinion based on historic evidence).

When you have stopped receiving a paycheck and you are relying on your investments for cash flow, the stock market is again predictable (never guaranteed) to make money for investors that follow a disciplined approach to control the things they can control. What can you control? How much you spend and when. Plan your spending two years in advance if / when you can. Sell when the stock market is up and replenish your spending pool. When markets go down... because it will occasionally... , don't do anything (or at the most, small / tiny adjustments to profit from the market decline).

Control the controllable. Recognize the normality of change. Yes, change is really normal. As much as I yearn for "old, dull, and boring" it is never going to happen. Take a deep breath. Life is journey so it is best to enjoy it. Call us or schedule a meeting. We would love to hear from you.

Wollman Wealth Designs, Inc is a financial planning and investment advisory firm in Escondido, CA partnering with families, friends and clients in San Diego County and around the country. Please visit our website, call the office or send us an email with your comments or questions.

Securities and advisory services are offered through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker-dealer and registered investment adviser. Cetera is under separate ownership from any other name entity. CA Insurance License #0604093 

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results. For a comprehensive review of your personal situation, always consult your legal advisor. , Neither Cetera Advisor Networks LLC, nor any of its representatives may give legal advice.

(Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Past Performance does not guarantee future results.