2025 Mid Year Market Commentary

It’s my pleasure to report on the rather tumultuous first six months of this eventful year. We have found that restating our philosophy every 6 months in these letters and during our annual reviews allow customers to be better prepared for the annual volatility of the market and hopefully resist the impulse to over-react to the fluctuations that seem to follow every headline.

As always, let’s first remember a handful of the timeless truths about historically fundamental investment principles that guide our work together, toward your goals.

General Principles of the Dave Christy Investment team:

Investing should be goal focused, and plan driven. Your investment choices are derived from, and driven by, your most important lifetime financial goals, not any view of the economy or the markets. The economy cannot be consistently forecast, nor the markets timed. Therefore, it is not possible to gain any advantage by going in and out of the equity market, regardless of current conditions.

The most efficient method of capturing the full premium compound return of equities is by remaining fully invested and continuing to invest. Historically, this means to earn the long term returns the market has delivered, one must also participate in the frequent, temporary declines.

The first rule of compounding: “Never interrupt it unnecessarily" is a famous quote from Charlie Munger, the former vice chairman of Berkshire Hathaway and Warren Buffett’s longtime partner.

Current Commentary:

During the first 6 months of 2025, if this letter is prompting you to look at your account values for the first time this year, you may come to the conclusion that not much happened and your equities are up from where you started on Jan 1. (depending on your allocation) Nothing could be further from the truth.

The S&P 500 Index1 made a new all-time high on February 19th. By April 8th, it had closed 18.9% lower. And even that doesn’t express the degree of sheer panic— there’s no other word for it—that enveloped the markets upon President Trump’s announcement (on April 2) of a dramatically increased tariff protocol.

The panic ended just as abruptly after The President announced a 90-day postponement of most of the new tariffs. And in the seven weeks or so since then - buoyed by continued strength in the economy and signs that inflation may be continuing to moderate—the Index returned to the neighborhood of its early January levels.

Continuing to work, your plan is key to meeting your financial goals especially during periods of market volatility. (Please don’t mistake this for an economic or market outlook. We have no such forecast for the next six months, any more than we did on January 1.)

Publicly traded companies will go on innovating over time, attempting to increase their earnings, and trying to grow shareholder value.

Panic doesn’t often seize the investing public as suddenly as it did in the first week of April, nor vanish as suddenly as it did the following week. Still, this episode can and should serve as a kind of tutorial.

It’s lesson: investors succeed over time by continuously working their plan regardless of the current “crisis.” Others fail by reacting to negative events and liquidating even the highest quality equities at panic prices.

Investing is a choice. Our mission is to educate and help you make informed decisions regarding your investment plan.

Thank you, as always, for being our customer. It is a privilege to serve you.

Sincerely,

Securities available by State Farm VP Management Corp. Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.The S&P 500® Index tracks the common stock performance of 500 large U.S. companies. Neither State Farm nor its agents provide tax or legal advice. State Farm VP Management Corp. is a separate entity from those affiliated and/or unaffiliated entities which provide advisory services, banking products and insurance products AP2025/07/1119

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1 www.stern.nyu.edu