Past Performance & 2024 Newsletters

Looking Back to See Ahead: Lessons From Our 2024 Newsletters

When we revisit the newsletters sent to clients throughout 2024, a consistent theme emerges: caution in the face of historic market performance. At the time, we emphasized three critical points:

• The historical rarity of back-to-back years delivering +20% returns in the S&P 500.
• The growing probability of a meaningful market pullback.
• The importance of preparing for a transition from a “risk-on” portfolio posture to a more defensive “risk-off” stance.

Q3 2024 Client Newsletter: Stock Market Update & Economic Outlook

Going into the third quarter of 2024, four primary data points shaped my market view:

1. The interest rate environment and its trajectory.
2. The U.S. Presidential election cycle and associated policy risk.
3. The previous two years of S&P 500 performance, both delivering unusually strong returns.
4. U.S. labor market data as a leading indicator of economic resilience or weakness.

Special attention was given to studying prior market cycles—especially those leading into past recessions—where early warning signs were often ignored until well after market momentum shifted.

At the time, my stance was clear:

“I would rather be wrong for all my clients by missing out on a few more percentage points of upside—say +6% or +7%—while still having locked in exceptional gains, than be wrong about the market being ready for another sustained rally and end up riding a drawdown of -15% to -30%.”

The message was not about pessimism—it was about protecting capital after a period of outsized gains and positioning for asymmetric opportunities should markets reprice risk.

We also discussed a conditional shift from a risk-on to a risk-off allocation depending on evolving economic indicators. This was particularly relevant heading into Q4 2024, with some client accounts posting year-to-date gains exceeding +50%. The calculus was straightforward: preserving those returns was, in itself, a competitive advantage.

Q4 Quarterly Market & Economic Newsletter – December 29, 2024

By year-end, the following four factors dominated our market outlook:

1. The exceptionally rare +30% annual return in the S&P 500.
2. The state of market volatility, as measured by the VIX.
3. The Federal Reserve’s “higher for longer” interest rate stance.
4. Elevated investor sentiment, bordering on greed and euphoria.

My guidance was framed around scenarios:

“My prediction, for now, is that we will see markets continue to go risk-off throughout the early part of the new year. If we get initial policy changes with significant market implications, we will reassess portfolio positioning.”

For more balanced outcomes, we considered a “middle of the road” year—one defined by substantial swings but modest single-digit annual returns. In that environment, portfolio construction would emphasize tactical positioning to exploit volatility, rather than simply riding market beta.

April 2025 Market Crash – A Bottom Called with Precision

The April selloff became one of the most attractive buying opportunities of the past decade. It presented a rare moment when almost every category of investor—retail, institutional, and global—could add to or initiate positions across a wide spectrum of assets.

From the open on Monday, April 7, 2025, the S&P 500 rallied +28.98%. For perspective, since 1926, the index has only posted an annualized return greater than +28% 21 times. What made this surge remarkable was the speed: it took just 123 days to deliver what has historically been considered a full year’s extraordinary performance.

Key Takeaways

1. Historic Returns Breed Complacency – Periods following extreme market gains often invite overconfidence and underpricing of risk.
2. Volatility Creates Opportunity – Well-timed tactical shifts can capture asymmetric upside without exposing portfolios to unnecessary drawdowns.
3. Macro Still Rules – Interest rates, election cycles, and global policy shifts remain the primary forces shaping long-term return paths.

Our philosophy has remained consistent: capture gains when available, protect capital during periods of uncertainty, and position decisively when markets mis-price assets.

Disclosure Statement for The Grosvenor Perception

Last Updated: 08/02/25

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