With yields back on the rise, bonds are again worth considering for anyone with cash on hand. A seven-year ladder of investment-grade corporate bonds is paying close to 5% per year. For those who land in the top income tax brackets, a similar ladder of high-quality Minnesota municipal bonds has taxable-equivalent yields of more than 7%.
Tariffs remain front and center when it comes to short-term drivers of market performance. Markets dislike uncertainty, and a constantly changing wave of tariffs seems a perfectly unpredictable policy. President Donald Trump did grant investors a temporary reprieve by announcing a 90-day pause to the implementation of his “reciprocal tariffs,” then exempting certain products like computers and smartphones. But his administration’s long-term economic policy remains entirely unclear, and that lack of clarity means market volatility will likely remain elevated.
Policy is not the only culprit triggering volatility. Many of the mega-cap technology stocks with outsized market influence entered 2025 trading at especially rich valuations. Six of the “magnificent seven” tech stocks have lost more than the S&P 500 year-to-date. Federal government reform (think: Elon Musk’s DOGE) and lingering inflation concerns are playing a part as well.
As of Thursday, the S&P was down 14% from its February peak. It’s human nature to wonder if the benchmark might retest its recent low, but selling during times of extreme volatility rarely works out well. The best days and the worst days tend to cluster together, so trying to avoid the downside means you risk missing the upside, too.
Investors who feel compelled to “do something” should focus their attention on buying stocks while they are lower or locking in bond yields while they are higher. Right now, they have the opportunity to do both.
Ben Marks is chief investment officer at Marks Group Wealth Management in Minnetonka. He can be reached at ben.marks@marksgroup.com. Brett Angel is a senior wealth adviser at the firm.
