RZH Insights: The More Things Change, the More the Stock Market Stays the Same

It’s hard to believe, but it’s been a year since Donald Trump and Joe Biden stood on stage in Atlanta, on June 27, 2024, for what would become their first – and only – debate.

What followed reshaped the American political and cultural landscape in ways few could have predicted. Since then, the national conversation has been dominated by words like “chaos” and “turmoil”.  Cries of “this time it’s different” rained down from the pundits.  It’s easy to understand why many felt this way when you consider the myriad events during the past 12 months:

  • Joe Biden withdraws from the presidential election
  • Donald Trump survives two assassination attempts
  • A global stock market decline wipes out $6.4 Trillion1
  • Climate Crisis hits new highs with catastrophic global natural disasters
  • Ukraine–Russia conflict intensifies
  • Israel-Hamas conflict continues
  • Donald Trump decisively wins the presidency
  • AI reshapes business and threatens millions of jobs
  • Elon Musk and DOGE turn DC agencies inside-out
  • President Trump imposes unprecedented tariffs
  • The S&P 500 index falls 21% in less than three months2
  • President Trump calls for the removal of Federal Reserve Chair Jerome Powell
  • Moody’s downgrades U.S. debt rating as national debt levels hit all-time high3
  • ICE raids and deportations divide America
  • Active-duty Marines deployed on U.S. soil to manage riots in Los Angeles
  • Israel attacks Iran
  • “No Kings” Day protests sweep the country
  • America enters the Israel-Iran conflict by bombing Iranian nuclear sites

The uncertainty, fear, and alarming headlines have been so overwhelming that I felt compelled to reflect on their emotional and psychological toll – in this recent newsletter, where I wrote about the impact these events have had on our clients, on me, and on our firm.

And yet, over arguably one of the most chaotic, emotionally charged and unpredictable 12-month periods in recent history, the S&P 500 rose 13.3%!4  An annual return ABOVE historical averages.5

How is that even possible?

The answer, as I’ve said countless times, and with deep conviction, is remarkably simple:

This time isn’t different: stock prices follow earnings – not headlines.

Great companies adapt. They find ways to navigate challenges, innovate through adversity, and create long-term value for shareholders. Over time, the stock market isn’t reacting to the noise of headlines – it’s responding to the enduring profitability of the companies it reflects.

So, the S&P 500 rose 13.3%, care to take a guess as to how much corporate earnings rose?  Up 13.4%.6  Coincidence?  Hardly!

As evidenced by this chart, this dynamic has been true for over 80 years.  Stock prices follow earnings.  The market doesn’t rise because the world is calm – it rises because great businesses keep delivering results. That’s the power of disciplined investing. That’s the power of focusing on fundamentals and having a plan to carry you through.

In other good news, the past 12 months also saw positive developments in several other high-profile areas:

  • Overall Inflation (CPI) – down 27%7
  • Price of Oil – down 20%8
  • Price of Eggs – down 25%9
  • Average price of a Taylor Swift concert ticket – down 29%10
  • Price of Bitcoin – up 56%11

YOUR FUTURE IS OUR MISSION

All of us at RZH work tirelessly to protect you and your loved ones.  We will get through this together and continue to prosper.  We’ll continue to carefully manage your plan behind the scenes, so please try to live tomorrow like you lived today – you’ve earned and deserve it.

Best regards,

Carl J. Zuckerberg, CFP®, AIF®, CIMA®  

Principal, Chief Investment Strategist

[1] “$6.4 Trillion Stock Wipeout Has Traders Fearing ‘Great Unwind’ is Just Starting”. Bloomberg News. August 8, 2024.

[2] Performance of S&P 500 Index as measured from intraday high (6,147) on February 19, 2025, through intraday low (4,835) on April 7, 2025. Yahoo Finance. Investors cannot directly purchase an index.

[3] Moody’s downgrades United States credit rating, citing growth in government debt. CNBC. May 16, 2025.

[4] S&P 500 Total Return as measured from June 25, 2024, through June 24, 2025. YCharts.

[5] Historical annualized return of S&P 500 Index of 10.47% as measured from June 1, 1925, through June 1, 2025, assuming dividend reinvestment. DQYDJ.com.

[6] S&P 500 Trailing Twelve-Month (TTM) Earnings from March 31, 2024, through March 31, 2025. YCharts.

[7] “Current US Inflation Rates: 2000-2025”. Inflation decline measured from May 31, 2024, through May 31, 2025. US Inflation Calculator, CoinNews Media Group.

[8] Crude Oil Mercantile Exchange pricing measured June 27, 2024, through June 24, 2025. Yahoo Finance.

[9] “Retail price of eggs (grade A, large) in the United States from 1995 to 2024”. Statista. January 31, 2025.

[10] Average price of Taylor Swift ticket price as measured from June 2024 through June 2025 according to CW33.com and SimpleBeen.com.

[11] Bitcoin (BTC) return as measured from June 27, 2024, through June 24, 2025. Yahoo Finance.

Important Disclosures