As we close out 2024 and step into 2025, many investors are asking what kind of year lies ahead. With the S&P 500 delivering over 20% returns for the second consecutive year, history suggests caution may be prudent.
Past instances of back-to-back 20%+ years have often been followed by sharp drawdowns, averaging over 20%, as highlighted in the accompanying chart.
While history doesn’t guarantee the future, it reminds us that markets can shift quickly. This is why we take a RiskFirst® approach to navigate potential volatility while preserving long-term opportunities.
Third Time’s the Harm
Max Drawdown in Year Following Two Consecutive Years of 20% + Market Gains
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: January 6, 2025
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
Best Invest Advise EVER!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.
