This Week’s Blog Is Written By Scott D. Heins, CFP®, IAG Chief Investment Officer
October 8, 2025

Welcoming a newborn child to your family is an amazing experience. They are so small and fragile, unable to communicate except through wails, and entirely dependent on you for food, love, and hygiene.

By the time your little one turns one, they have undergone an amazing amount of growth both physically and mentally.

By the time they mature to the terrible twos, they have attained fearless mobility and the ability to communicate their thoughts and feelings. However, their emotional and intellectual regulatory processes have not quite developed which can lead to frustration for both child and parents.

And then there are the threes. Three year-olds have confidence beyond their years. They develop their own opinions, expand their independence, but still struggle with holding it all together when things don’t go their way.

This coming Sunday, our toddler bull market will turn three years old. Will it act like a threenager over the next 12 months or will it peacefully mature into a healthy and “mature” four-year old?

On October 12, 2022, the S&P 500 Index (representing a basket of large U.S.-based companies) closed over 25% below its previous record high on January 3, 2022. At the same time, the bond market was also feeling significant pain as the Federal Reserve rapidly raised their overnight interest rate.

The only investment that felt safe at the time was cash, and many impatient traders fled from their long-term investments to embrace the “safety” of cash — which was suddenly earning over 5% thanks to the Fed’s rate hikes.

Fast forward three years and we find that those who abandoned their long-term investments have earned a positive nominal return. Over those three years, the newly-minted cash aficionados likely earned about a 12%-14% total return and feel pretty good about it. Unfortunately, inflation was roughly the same as their return over that time period, so on an after-tax basis they actually lost purchasing power.

For the patient investors who in adult-like fashion ignored the 2022 temper tantrum, U.S. large cap stocks have provided approximately an 88% return since the bull market’s inception (based on the S&P 500 Index). The visionaries who recognized that low(er) stock prices have the potential for future high(er) returns and acted upon that intuition likely posted even higher returns. Their purchasing power increased – not by working harder, but working smarter.

Bull markets are always born with pain and screaming. Screaming headlines of negativity, painful account statements (if you dare to look), and a general absence of hope.

Yet, one random day the markets take a turn for the better and a small, fragile ray of positivity flickers in traders’ minds. This bull’s flicker came on October 13, 2022, and it has been maturing ever since. Be sure to celebrate its incredible growth thus far on Sunday.

But we also know that the odds of peaceful maturation to a four-year old is unlikely. Threenagers tend to make the terrible twos look like a walk in the park. Always be prepared to respond appropriately to the bubbly emotions of your threenager, even if it is a bull.

Quote of the week: Shelby Cullom Davis: “You make most of your money in a bear market, you just don’t realize it at the time.”

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

ART: 808036

Photo Credit: iStock 2188931699