July 2025 Monthly Review

A Look Back

The iconic heavy metal singer, Ozzy Osbourne, released the above title as his debut solo single in 1980. The title was inspired by a malfunctioning effects pedal used by guitarist Randy Rhoads. He said the “chugging” sound it produced sounded like a “crazy train.”
The song went on to be famously associated with the former Black Sabbath frontman and is played at sporting events across the country. It’s opening line of “All Aboard!” is used to get crowds fired up and seems like a fitting tribute, as Ozzy recently passed away in July at the age of 76. It is that title and opening line that also fit in with the current market climate. Investors have absolutely gotten on board with large-cap U.S. stocks over the last three months. In fact, the S&P 500, up 2.24% in July, was up nearly 33% from the lows made in early April of this year…it’s been a little crazy. It’s not just that stocks are up…since tracking began, they are up around 70% of the time. It is that the latest surge in the S&P 500 is happening with economic uncertainty surrounding it. For example, the recent Jobs report not only showed a lower than expected 73,000 jobs added in July, but the May and June numbers were significantly revised downward. The actual unemployment rate remained steady, just ticking up to 4.2%. There has been some movement on many fronts regarding global trade, with the administration announcing deals with the Uk, China, Japan, South Korea and the European Union. We believe that much of the global trade reset will ultimately serve the U.S. well, but the uncertainty of the path has yet to deter stock buyers. Developed International stocks took a breather in July, down .08%, as Emerging Market stocks were up nearly 2%. Both have doubled the return of the S&P 500 so far this year with returns of 17.77% and 17.51%, respectively. Core bonds were slightly negative in July but are up a respectable 3.75% YTD. What really stands out in the table above is the 1, 3, and 5 year returns for the S&P 500. Remember that the long-term annual average for that index is around 10%. Although maybe not crazy…the five-year number is nearly 6% above the yearly average. A $1 million portfolio that grew at that healthy 10% a year for five years would be worth $1,610,510 at the end…at 16% it would be worth $2,100,341, or a difference of almost $500,000!

A Look Ahead

We look ahead with optimism for some of the long-term economic catalysts that are either in place or in the discussion mode. Americans have a long history of re-inventing, pivoting and coming out the other end. We have historically been best when capital is allowed to flow freely to the best and brightest ideas, all the while making sure that we remain a compassionate leader both here and abroad. American author and motivational speaker Zig Ziglar said that “difficult roads often lead to beautiful destinations.” It could very well be that some difficult roads may be in our short-term future as we navigate this global trade reset, a slowing economy and stubborn inflation. The Fed has been on hold all year with short-term interest rates, even as some have clamored for a rate decrease. It now looks like that rate cut could come as early as September. This year has truly shown the benefit of a well-diversified asset allocation approach as international stocks have provided a nice boost to overall performance. We believe that the trend can continue and remain slightly overweight. If the rest of the curve comes in as the Fed reduces the short part of the curve, core bonds can continue to act as a ballast for clients. We remain on the train, and recognize that, just like everyday life…it can get a little crazy sometimes!