Pain is Sometimes the Path

Six Things You Should Know

1. Equity Markets – were up this week from last Friday’s close with U.S. stocks (S&P 500) increasing +3.43% while international stocks (EAFE) rose +4.52%.
2. Fixed Income Markets – also ended up this week with investment grade bonds (AGG) gaining +0.70% and high yield bonds (JNK) rising +1.12%.
3. Deficit Shrinks – The trade deficit came in at $57.3 billion in February despite expectations of $60.6 billion. Over the last 12 months exports are up 12.2% while imports have fallen 7.1%, resulting in a monthly trade deficit that is $62.5 billion smaller than where it was a year ago. The report also showed in dollar value that U.S. petroleum exports outpaced imports for the 48^th consecutive month.
4. Gas Prices – The average price of gasoline in the U.S. topped $4 a gallon this week for the first time since 2022 as consumers continue to feel the pain at the pump from ongoing conflicts in the Middle East. President Trump in his address to the nation this week regarding updates to peace talks, did little to alleviate concerns that resolution talks may continue to drag into May or beyond. 
5. Cybersecurity Reminder- Scammers are increasingly using Remote Access Tools (RATs) along with phishing emails or texts to take control of devices like phones, tablets, and computers. Once installed, these tools can give cybercriminals access to sensitive information, including your Schwab accounts. These attacks can be hard to spot, so if something doesn’t feel right- like unusual account activity or suspicious messages- trust your instincts. If you sense suspicious activity, please call us immediately or report any concerns to Schwab at 800-515-2157. 
6. Key Insight – [VIDEO & ARTICLE] None of us like to experience, let alone endure, pain and yet so many worthwhile things in life require discomfort. We share one market commentators 100pound weight loss journey and what investing lessons he took from that, along with why selling and waiting for things to “calm down” costs far more than many realize. 

Insights for Investors

By Tim Mitrovich

When Avoiding Pain Results in Unknowingly Embracing Danger

There are lots of analogies to use regarding endeavors that require discipline, patience, and yes, even pain in order to achieve one’s goals. And while it is easy to be dismissive of the lessons and truths, surrounding those analogous paths they are no less important or true. 

Market commentator and award-winning researcher, Michael Gayed shared a great post regarding this concept this week while discussing his recent 100-pound weight loss. He stated in his LinkedIn post, “Q1 was painful. Worst quarter since 2022. $4.5 trillion in market cap erased. Every rally attempt failed. I’ve also been on a personal journey — losing 100 pounds through fasting. These two experiences taught me the same lesson. When you fast, the hunger doesn’t kill you. The discomfort is real. The urge to break is constant. But if you sit with it — without reacting — something shifts. The hunger plateaus. You realize the pain was never the danger. The panic response was. Markets work identically. The drawdown doesn’t destroy you. The panic sell at the bottom does. The forced rebalance at the wrong moment does. The decision to “stop the pain” by locking in the loss does. Discipline isn’t about ignoring pain. It’s about not confusing temporary pain with permanent danger. I’m not saying hold forever. I’m saying know the difference between a signal and noise. Know whether your body — or your portfolio — is genuinely threatened, or just uncomfortable. Most losses in fasting and markets come from reacting too quickly. The body wasn’t dying. The market wasn’t broken. We just couldn’t sit still.” (Source: Michael Gayed, LinkedIn, 3/31/26) 

I particularly loved the part of the post/quote above that too often we as investors fail to understand that “Discipline isn’t about ignoring pain. It’s about not confusing temporary pain with permanent danger.” 

I’ll often tell people that selling during a market panic does take away the pain of volatility, but in so doing you almost inevitably suffer the real danger of permanently impairing your net worth. It’s like jumping off a ship in a storm because it’s “calmer” underneath the ocean than rocking in the waves above the surface – true, but a temporary fix that brings even greater danger. 

What danger? Consider the chart below that speaks to what I have found to be a very real phenomenon, which is that beginning with a 5% decline in market investors and the media begin to get very nervous and tempted to bail/pullback on their investments to avoid “the next big selloff” with promises to come back “once things calm down.”  

That all sounds very logical, but a) presupposes that the market is in fact going to keep selling off, and b) that buying back in “when things calm down” will be lower than the price at which you sell. As you can see below, that has historically been a recipe for significant loss of one’s potential returns versus staying the course, or even better rebalancing/buying into the declines. 

The same goes for those people that never mount the courage to invest at all. Investing is too risky they argue, better to just put it in the bank where the balance never fluctuates and they can ignore all the market headlines that are now no longer relevant to them. Yes, they avoid the pain of volatility, but in so doing, guarantee true losses to their purchasing power from the erosive effects of inflation as the next chart shows. (Source: TEN Capital) 

If We Stay with the “Ship” is there Hope the Storm will abate? 

No offense to your local weatherman, but predicting markets is about as foolhardy as predicting the weather, at least if one is not prepared for surprises and frequent changes to the forecast. Neither is fatal, but both require some preparation and flexibility. 

Just like rain/storms, the market has its moments of “bad weather” as well. We KNOW this, and yet investors still seem to be surprised when markets are anything less than “sunny.” Historically, roughly 45% of trading days are negative and 33% of calendar years and yet the long-term of average of the US equity market is approximately 10% historically (Sources: Crestmont Research 12/31/25, Capital Group 12/31/25; and Fidelity 12/31/25) 

And yet, while storms may be inevitable, they are not endless, thus the historic resiliency and strength of the US economy and markets.  

What signs of “sun” and strength may be on the horizon during this difficult start to the year? 

First, a quick recap of exactly what all the market has endured to date. As summarized by Joason De Sena Trennert of Strategas, “Well, what can one say about a quarter in which the U.S. decided to engage in not one, but two, major significant military “excursions” – Venezuela and Iran?  And don’t forget about our relatively brief flirtation with Greenland.  Add to that a criminal referral of the sitting Chairman of the Federal Reserve, a government shutdown, growing concerns about the private credit industry, and, if that wasn’t enough, existential questions about software as service companies, and it’s somewhat surprising in a way that the S&P 500 was only down -7.1% in the quarter.  Of course, that’s nothing to celebrate, but it could have been a lot worse for a market trading at 23x earnings after three strong years for the Index.” (Source: Strategas, 4/1/26) 

He went on to highlight some bright spots both currently as well as looking forward noting, “If there is good news, it is that fourth quarter 2025 earnings as reported early in the year were strong – up +14.0% year over year.  More important, earnings expectations are currently lamped at +14.3% y/y in 1Q 2026 and up +14.1% for 4Q.” (Source: Strategas, 4/1/26) 

Tom Lee of Fundstrat, also shared four reasons from his perspective for optimism in the face of $100 oil: 

1. WTI oil at $100 a barrel adjust for inflation is actually lower than the average price of oil over the last 25 years 

2. US war spending is stimulating the economy and adding as much as $20-30 billion to GDP per month, offsetting higher oil 

3. Oil would need to average $125 per barrel to offset GDP impact 

4. Equity markets historically bottom with the first 10% of the duration of a war’s length 

Source: Fundstrat, 3/30/26 

The above will strike many as insensitive amidst the realities of the current war, but as we shared before in our piece entitled The Uncomfortable Truth About Mr. Market (see 2/21/25) the market is a calculator not a human and as such often views realities far differently than our sensibilities would have us do. 

The last major point of optimism is the continued strength of the consumer, especially in light of the impending level of tax refunds hitting as we speak. As the team at Strategas noted, “the average tax refund will accelerate on a year-over-year basis due to the increase in the State and Local Tax Deduction from $10k to $40k. March has been a strong month for tax refunds, growing at a 19 percent clip compared to last March and increasing in size relative to February. This bodes well for Strategas’ Consumer Stimulus Index, which uses four government aid programs to forecast retail sales (tax refunds, food stamps, Medicaid, and student loans). If the month ended today, the $20 billion increase in consumer aid would be one of the largest non-COVID months on record. Our stimulus indicator works with a lag, so while consumers tell pollsters they will save their refunds, history shows they spend that money eventually.” (Source: Strategas, 3/24/26) 

The strength of the consumer and private sector was also called about by Apollo’s Torsten Slok in recent commentaries.  

First, he noted the strength of private balance sheets, calling out that “The private sector in the US is in really good shape. Households have been deleveraging since the 2008 financial crisis, see the first chart. The corporate sector has been deleveraging since COVID.” (Source: Apollo, 2/19/26) 

Second, in response to the market concerns caused by recent consumer sentiment readings, supposedly due to the conflict in the Middle East, Slok pointed out that, “…there is a difference between what consumers are saying and what they are doing … Markets are overreacting to what will likely be a 4- to 6-week period of volatility, which will ultimately result in 50 years of stability in oil markets, supply chains and geopolitics …The bottom line is that the Iran shock is not big enough to offset the strong tailwinds to the US economy from AI spending, the industrial renaissance and the One Big Beautiful Bill.” (Source: Apollo, 3/27/26) This view was supported by this Wednesday’s Retail Sales Report that showed sales rose by 0.6% in February. (Source: Bloomberg, 4/1/26) 

Throw in additional economic readings such as an increase in ISM Manufacturing readings to 52.7, its third month in a row registering growth and the “everything is bad” narrative gets harder to buy into. (Data Source: Bloomberg, 4/1/26) 

In Closing 

Market “storms” are inevitable and so are ever-present challenges to be overcome. Fortunately, history has shown that the innovative companies that make up the economy and markets have proven their collective resilience and ability to overcome time and time again – regardless the set of particular circumstances at any given point in time. 

The pain from headline scares and/or market volatility is real but it, by itself, is not fatal – what can be fatal are the many ways investors attempt to avoid that temporary discomfort. 

If you need help mapping your plan and finding a partner to help you navigate the storms to the destinations reflected in those plans, we are always here to take that journey with you. 

Have a wonderful Easter weekend, 

Tim and the team at TEN Capital

Data, Just the Data

• U.S. Manufacturing PMI – held firm at 52.3 in March. Business confidence dipped slightly as firms expressed concerns over rising energy prices and tariffs.  
• U.S. Consumer Confidence – the University of Michigan’s consumer sentiment index fell sharply in March to 53.3 from February’s 56.6. Forward looking inflation expectations rose 3.8%, the largest monthly increase since April 2025.  
• U.S. Retail Sales – rose 0.6% month-over-month in February for the strongest monthly expansion in 7 months. Year-over-year sales are now up 3.7%.  
• U.S. Jobless Claims – initial claims fell by 9,000 last week for a total of 202,000, nearly tying the 2-year low of 201,000 from the first week of January. Continuing claims edged higher by 25,000 to 1,841,000.