In the August 2025 Trending Report, Kevin Roskam of USA Financial reflects on the persistent theme of uncertainty in the markets—a constant he has observed over more than three decades of watching the economy and stock performance. He notes that this uncertainty can stem from politics, pandemics, economic conditions, or other external events, and while the specifics may change, the emotional roller coaster it creates for investors remains the same. Kevin shares his personal experience of quickly shifting between fear and hope, emphasizing that even seasoned professionals are not immune to the pull of investor emotions. He points out that successful long-term investing requires not only a sound plan but also the discipline to stick with it despite short-term volatility, making only minor adjustments when truly necessary.
Kevin uses recent market activity to illustrate his point, highlighting that the S&P 500 is up around 9–10% year-to-date—an outcome most investors would have gladly accepted back in January—yet the path to get there was far from smooth. Volatility and quick shifts in sentiment have made it difficult for many to remain committed to their strategies. He compares this to his own family vacation in Northern Michigan, where days in the sun left him tired and more emotionally reactive, drawing a parallel to how fatigue and external conditions can amplify emotional responses in investing. Recognizing and managing these emotions, he argues, is key to making sound decisions.
Shifting to data, Kevin reviews fund flows for U.S. equity sector funds, pointing out the inconsistency in where money moves from week to week. For example, communication services saw large inflows recently after previous weeks of outflows, while U.S. large-cap funds experienced significant withdrawals. This movement reflects shifting investor sentiment, which can be as changeable as the news cycle itself. He also examines bond fund flows, noting that increased allocations to bonds often signal heightened uncertainty, as investors seek preservation over speculation. While observing these patterns can provide insights, Kevin cautions against letting short-term market moves dictate wholesale changes to a portfolio.
He stresses that much of the market’s movement this year has been driven more by anticipation of negative events than the events themselves. The tariffs implemented on August 1 serve as an example: the market dropped in advance due to fear of potential impact, but after they took effect, stocks recovered. This, he explains, shows how markets often react more strongly to expectations than reality. Long-term trends still support maintaining some exposure to equities, provided investors adhere to a disciplined, unemotional strategy.
Kevin closes by advocating for formulaic investing, which relies on market reactions rather than news headlines, and for using multiple managers with different approaches to weather various market environments. While such strategies may occasionally become defensive prematurely or hold that stance too long, the important thing is that they operate consistently according to their design. With several months left in 2025, volatility could still work to investors’ advantage if they trust their plan, avoid emotionally driven decisions, and remember that long-term success depends on resisting short-term impulses.
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The Trending Report is a monthly commentary series that explores topical trends taking place within the current market and economy. It aims to provide clarity and encourage Advisors and Investors as they navigate and make sense of current market conditions. The ongoing battle between short term emotions and the commitment to long term investing is real. This series seeks to help Advisors and Investors focus their energy on long term success. Hosted and published by the investment professionals at USA Financial, each episode offers valuable commentary and analysis into various economic factors and market movements. By tuning in, our host breaks down complex topics into easy-to-understand information.
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