Honoring Mothers and Resilience through the Emotional Waves of Market Cycles  

Five Things You Should Know

1. Equity Markets – dropped slightly this week with U.S. stocks (S&P 500) down -0.44% and international stocks (EAFE) down -0.15%.
2. Fixed Income Markets – also slightly down this week with investment grade bonds (AGG) down -0.19% and high yield bonds (JNK) remained flat.
3. Tariff Updates – The economy welcomed news this week of a tentative trade agreement between the U.S. and the U.K., sparking optimism that deals with other global powers may be on the horizon. The announced bilateral agreement will leave the 10% tariff on British exports in place, but it expands agricultural access for both countries and lowers proposed U.S. tariffs on British car exports. President Trump has also stated a willingness to lower tariffs on China pending their meetings over the upcoming weekend.
4. Federal Reserve – As generally expected, the Federal Reserve announced to leave interest rates unchanged at 4.25-4.5%, with the committee noting that “the risks of higher unemployment and higher inflation have risen”. Also to combat recent pressure from President Trump, Fed Chair Jerome Powell noted that the central bank still wants to see the longer-term impact of tariff decisions and that “it’s not a situation where we can be preemptive, because we actually don’t know what the right responses to the data will be until we see more data.”
5. Key Insight – [VIDEO] This week, Amy Jo and Maddy take a moment to honor Mother’s Day and remind us to focus on the things we can control both in our portfolio and our mindset. [ARTICLE] Behind every market dip and recovery is a story of the emotional journey investors experience during those time periods. This is where the data (math) intersects with human behavior (emotions). Recognizing that there are cycles helps investors step back from emotional reactions and make decisions rooted in discipline, not fear.

Insights for Investors

By Amy Jo Van Lierop & Maddy Underwood 

Resilience through Market Cycles and Emotional Waves 

Over the decades, the stock market has demonstrated remarkable resilience, rebounding time and again from crisis, corrections, and uncertainty.   These historical and dramatic downturns felt like the end of stability. Yet, despite wars, recessions, inflation spikes, oil crises, tech crashes, pandemics, and countless geopolitical events, the market recovered, maintaining a consistent upward trend over the long term.  See how the chart below highlights the market’s resilience and the potential benefits of a patient investment strategy.  

The pattern of setbacks followed by recovery isn’t accidental – it’s structural.  Markets adapt, companies innovate, and economic progress resumes.  The resilience of the market isn’t wishful thinking – it’s historically grounded. 

The above chart tells a visual story of long-term growth, but beneath that line lies something more personal:  the emotional journey of the investor. That journey is less visible, but equally important. Behind every market dip and recovery is a story of the emotional journey investors experience during those exact same time periods. This is where the data (math) intersects with human behavior (emotions). Just as the market weathers storms and recovers, investors must cultivate their own form of resilience: the ability to remain steady, thoughtful, and long-term focused in the face of short-term volatility.

The parallel is clear – market resilience and emotional resilience are not only connected; they’re essential to one another. 

Markets move in cycles, and so do emotions.  The same events that drive market volatility can stir up powerful feelings in investors. The next chart – the emotional cycle of an investor – helps us understand not just what happened in the market, but how it felt to live through it.  It reminds us that resilience isn’t just something markets demonstrate, it’s something investors must develop. 

Most investors, regardless of experience, go through emotional highs and lows that follow the market. 

These stages are: 

• Optimism:  At the start of the bull market, hope and enthusiasm grow.  We expect a reward for the risk of investing and that things will go our way. 

• We get excited in anticipation that a success story is in the making and thrilled with our decision to get in the market! 

• Euphoria:  At market peaks, confidence turns into exuberance – sometimes even denial of risk. We fool ourselves into believing that excessive returns are commonplace. This marks the point of maximum financial risk. 

• Then the market stops meeting our lofty expectations and begins to turn.  As markets decline, optimism fades.  We anxiously watch the market, and our long-term view now shortens to a near-term hope of improvement.  Fear and denial creep in as the value of our investments decline. We start feeling a little desperate and contemplate switching out of riskier assets to more defensive investments.  Many panic, which is the most emotional period by far. 

• Capitulation:  Investors may sell in despair – often near market bottoms – to avoid bigger losses. After exiting the markets, we do not want to buy stocks ever again.  However, this rare time marks the point of maximum financial opportunity. 

• Those who persevere become despondent and wonder whether markets are ever going to recover.  We cope with the feeling of depression, looking back on what went wrong. 

• Hope, Recovery & Relief: Eventually, markets stabilize, and we realize that the market has defined and specific cycles. When markets turn positive again, we regain faith in our investment strategy and are relieved to see our investments come back around 

• And the cycle starts all over again. 

The following are some examples of how investor sentiment tends to move through optimism, fear, and recovery in response to market events, detailed in the S&P 500 (1970-2022) chart above: 

1. The Dot-Com Bubble (1995-2002):  

• Optimism to Euphoria (1995-1999) As tech stocks soared, investors poured money into the market with confidence and excitement.  Many believed the internet was rewriting the rules of investing. 

• Anxiety to Fear (2000) When the bubble burst, valuations plummeted. The Nasdaq fell nearly 80% from its peak, and the S&P 500 declined sharply as well. 

• Despair and Capitulation (2001-2002) Many investors gave up, convinced that markets wouldn’t recover.  Selling at the bottom was common.   

• Recover and Hope (2003-2006) The market began to rebound steadily, and investor confidence slowly returned. 

2.  The Global Financial Crisis (2007-2009): 

• Optimism (2006) Housing markets were strong, the economy was humming, and markets reached new highs. 

• Fear and Panic (2008) The collapse of Lehman Brothers and banking failures triggered extreme fear. The S&P 500 fell over 50% and investors rushed to cash. 

• Despair (Early 2008) Pessimism peaked.  Many believed the financial system was fundamentally broken. 

• Recovery (2009-2012) The market began one of its longest bull runs in history, fueled by central bank intervention and slowly improving fundamentals. 

3.  COVID-19 Crash and Recovery (2020) 

• Confidence (2019-2020) Investors appeared optimistic about the economy and corporate earnings. 

• Shock and Panic (March 2020) The pandemic triggered the fastest bear market in history.  The S&P 500 dropped -34% in just over a month.  Fear and uncertainty were widespread. 

• Hope (Late 2020) Government stimulus, Federal Reserve support, and early vaccine news began to stabilize investor sentiment. 

• Renewed Optimism (2021) Markets recovered rapidly, reaching new highs, and investors returned with a “risk-on” mindset. 

In each one of these cycles, the emotional journey closely tracked the market movements, peaking in confidence just before declines and giving in to despair just before rebounds. Recognizing this pattern helps investors step back from emotional reactions and make decisions rooted in discipline, not fear. 

MARKETS RECOVER – AND SO CAN WE!! 

Closing Thoughts: 

We share the emotional cycle of an investor alongside the historical performance of the S&P 500 so you can see what many investors miss:  that emotional reactions often mirror market movements, but, when acted on, rarely lead to the best outcomes. When fear or euphoria drives decisions, long-term strategies can be derailed. By recognizing these emotional patterns and seeing how markets have historically recovered from difficult periods, we hope you are better equipped to stay focused, avoid costly mistakes, and make decisions from a place of perspective, not panic. Please remember, your team at Ten Capital is here for you through each phase of these market and emotional cycles and we encourage you to call, email, or connect for a meeting. 

We share in this week’s video commentary the Tale of Two Wolves, and how that correlates to investing:  The “Fear Wolf” and the “Wisdom Wolf”.  The challenge is to ask yourself, “Which wolf am I feeding right now?”  Are you reacting to short-term fear, or responding to long-term wisdom?  Are your financial decisions reflecting your values, and not your fears? 

The quality, joy and impact of our lives are directly related to how wisely we use the time we’ve been given. With Mother’s Day coming up this weekend, it is a perfect reminder to let go of the things that are outside of our control and use our time focusing on the people we love and the many blessings we have.  

Happy Mother’s Day! 

Amy Jo, Maddy, and the team at TEN Capital 

Data, Just the Data

• U.K. Composite PMI – fell to 48.5 in April, marking the first contraction for the index since October 2023. Both the services and manufacturing components fell, with forward-looking business confidence at its lowest level since 2022. 

• Eurozone Retail Sales – fell 0.1% month-over-month in March and came in below expectations. Year-over-year retail trade growth has now slowed to 1.5%, the weakest pace since July of last year. 

• U.S. Jobless Claims – initial claims fell by 13,000 to 228,000 last week, beating expectations of 230,000. Continuing claims also saw a retreat of 29,000 for a total of 1,879,000.

• Japan Household Spending – grew by 0.4% in March following February’s strong 3.5% growth. This put year-over-year spending at +2.1%, the strongest growth rate since December.