By Robert E. Quittner, Jr. CFP® & CMFC™
Investment Advisor Representative
[email protected]
Back in January, I wrote about keeping things in perspective when it comes to annual portfolio returns. In summary, coming off two great years of 20% returns I noted that we should temper our expectations for 2025 and an average year of 10.5% would be acceptable given historical norms. As I sit here writing this article on Thursday morning, the S&P is up 17.2% for the year and I am elated with the year so far. Still with two months to go anything can happen.
So why did I decide to write about market returns this week? I’ll circle back to that in a minute. In our country we are afforded a lot of freedom and choice:
- Choice of career or job
- Choice of education
- Freedom in marriage and relationships
- Lifestyle flexibility
- Freedom to travel and live where we choose
- Choice in healthcare
- Freedom in parenting
- Freedom to form and express personal beliefs
We also have the freedom to vote for our local, state and national representatives. It’s your choice and your opinion.
As “financial sherpas” we help individuals and families plan, manage and optimize their wealth—through good times and bad. Part of our responsibility is keeping you on track with your investment portfolio and helping you block out the noise from the daily news and chatter. Whether you lean left or right, blue or red, it makes no difference to us. Our mission is still the same.
At the start of the year, we heard both extremes—some clients eager to become more aggressive, and others worried about market direction and risk exposure. Both perspectives are understandable, but neither should drive short-term decisions.
While policies from the White House can influence markets, no administration controls them outright. The stock market is driven by many things: corporate earnings, global economics, interest rates (via the Federal Reserve), investor sentiment, international developments and technological change. The S&P 500 is widely considered a key barometer and tracks 500 of the largest publicly traded companies in the U.S. Even though they are based in the U.S., not all of their revenues are derived from U.S. Operations. According to data collected in 2023 about 28% of total revenues for S&P 500 companies come from outside the U.S.
In breaking the S&P down even further, many people look at the “Big 7” which comprises about 25% of a diversified 60/40 portfolio. Look at the chart below which illustrates the “Big 7’s” revenue breakdown and operations outside of the U.S. With over 50% of the revenue being generated from non-U.S. operations, the effects of White House decisions are muted even further.
| Company | U.S. | Non-U.S. | # of Countries They Operate in Outside the U.S. |
| NVIDIA Corporation | 44% | 56% | 35 |
| Microsoft Corporation | 51% | 49% | 186 |
| Apple Inc. | 43% | 57% | 174 |
| Amazon.com, Inc. | 69% | 31% | 100 |
| Alphabet Inc. | 49% | 51% | 50 |
| Meta Platforms, Inc. | 38% | 62% | 100 |
| Broadcom Inc. | 29% | 71% | 90 |
| Average Revenue Origin | 46% | 54% |
It’s important to remember that while political cycles and news headlines may dominate conversations, long-term market outcomes are influenced by many forces—most of which lie beyond Washington, D.C. Remember, long-term, corporate profits drive the market.
The best investment outcomes come not from reacting to headlines, but from maintaining perspective, balance, and trust in our recommendations.
The Birds have a bye this weekend and we get an extra hour of sleep on Saturday!
Enjoy the little trick or treaters!
Rob