🚨🚨 In March, I recommend trades in four IVA Portfolios. You can read about the trades and reasoning behind them here.🚨🚨
If you’ve been following the headlines out of Washington, you might be dreading your quarterly account statement—and I don’t blame you. This quarter has been anything but smooth for investors.
The new administration has moved quickly, making changes on multiple fronts. Tariffs have been flipped on and off like a switch, with yet another round set to take effect within 24 hours. Government departments have been restructured (to put it mildly), diplomatic relationships are shifting, and the limits of executive power are being tested. I could go on.
Stock market investors, particularly those who backed the Magnificent 7 tech mega-giants, have experienced a swift reversal of fortunes.
Technically, the stock market is in a correction. 500 Index (VFIAX) fell 10.05% from its high on February 19 to March 13. After a whipsaw couple of weeks, the flagship index fell 5.6% in March to finish down 4.3% on the quarter—it sits 8.5% below its February high. I’d wager we are not out of the woods yet.
That said, diversified investors have less to fear when reviewing their account statements this quarter. Commodities, foreign stocks, bonds, real estate and cash have helped buffer the downturn in the U.S. stock market.
To that end, the IVA Portfolios have returned between -2.4% and 1.7% this year—see below for more details. I’m not jumping up and down with joy over those returns, but it’s a better result than you may expect and certainly better than the 4.8% decline for Total Stock Market Index (VTSAX) or the 15.7% drop for the Mag 7 (measured by the Roundhill Magnificent Seven ETF (MAGS)).
As I’ve said, diversification and discipline are the keys to a successful investment outcome. The best way to spend time in the market is with your money invested in a strategic mix of asset classes here and abroad.
Roundup
Here is the latest news out of Malvern:
- Vanguard resumed meeting with corporate executives—see here. (Mar. 5)
- The firm filed with the SEC to launch two new municipal bond ETFs: Long-Term Tax-Exempt Bond ETF and New York Tax-Exempt Bond ETF. (Mar. 6)
- Vanguard’s systems stop communicating with third-party software, like Quicken, Schwab, Northern Trust, Empower and Boldin. (Mar. 5, 12, 13 & 26)
- The firm’s third proxy voting pilot program started. (Mar. 5)
- A class action lawsuit is filed against Vanguard over the $100 account closure fee. (Mar. 12)
- Vanguard fired Baillie Gifford from International Explorer. (Mar. 17)
- Vanguard announced plans to launch an ETF version of Multi-Sector Income. (Mar. 24)
- The fund giant earned top ranking according to J.D. Power, but it’s too soon to declare that Vanguard’s technology is fully fixed. (Mar. 26)
Here are the IVA Research topics we discussed in detail this month:
- I answered a common IVA reader question: Are Treasury bonds still safe? [Spoiler: Yes.] (Mar. 4)
- Some funds pay out “supplemental” capital gains in March. I shared all the relevant details to help you navigate the springtime capital gain distribution season. (Mar. 11)
- My annual tradition of sharing my personal investment portfolio. (Mar. 18)
- As stocks entered correction territory, I hit the history books and analyzed the market declines over the past four decades to put the current drawdown into perspective—see here and here. (Mar. 14 & 25)
Finally, you can find downloadable versions of the Portfolios and Performance Review with data as of 3/31/2025 on their respective tabs (links provided).
Bonus Recommendation:
Over the weekend, I listened to a brief yet insightful podcast episode, Fees vs. Fines: The Cost of Admission in Investing, from the always-excellent Morgan Housel.
The key takeaway from this timely 13-minute episode is that volatility, corrections, and bear markets aren’t penalties—they’re the fees long-term investors must pay to compound their wealth over time. And as Housel emphasizes, it’s a fee well worth paying.
If the link above doesn't work, try here.
Portfolio Notes
As I said in the alert at the top, I recommended trades in four of the IVA Portfolios. The short story is that I added to foreign stocks under the logic that if we enter a new market environment, we should expect to see new market leadership emerge.