📬 May “3 FOR 3” NEWSLETTER 

Because reacting emotionally is optional—but expensive.

1. The $265,000 Emotion Tax: Why Most Investors Underperform

Let’s start with the truth bomb that most financial firms would rather whisper about: the average investor consistently underperforms the market—not because of fees or bad luck, but because of poor timing.

According to the DALBAR Quantitative Analysis of Investor Behavior, over the 20-year period ending in 2022, the S&P 500 returned an average of 9.65% annually. Meanwhile, the average investor earned just 6.81%. That 2.84% annual difference may not sound devastating—but over time, it’s catastrophic.

💸 On a $100,000 investment over 20 years, that gap equates to about $265,000 in lost returns. That’s what I call the emotion tax—and it’s the cost of chasing hot trends, panicking during downturns, and letting fear (or FOMO) drive investment decisions.

And this isn’t a fluke. DALBAR’s data shows that this behavior gap is consistent year after year, driven by reactive investor behavior. Buy high. Sell low. Repeat. It’s not just underperformance—it’s a systemic investor psychology problem.

Now compare that with what we do at Alphavest. As I mentioned in our March newsletter, we’re proactive—not reactive. In 2024, we exited risky growth plays before the crowd, rotated into protective assets, and leaned into dividend-rich equities. That’s why our clients didn’t get steamrolled by the Magnificent 7’s volatility in Q1.

Want to see the study? 📖 DALBAR QAIB Report

This month, if you’ve been thinking about “getting back in” or “waiting for the right time,” I’ll say this: timing is the enemy of compounding. The best time to plant that tree? Twenty years ago. The second-best time? Now—with a plan.

2. Miss the Best Days, Miss the Point: How Timing the Market Backfires

Let’s play this out with real numbers.

A widely circulated analysis by Fidelity and confirmed by CNBC looked at the impact of market timing. Their findings?

If you miss just the 10 best days in the market over a 20-year period, your return drops from ~9.65% to 5.18%.

Miss the 20 best days? You’re earning 2.9%. That’s barely outpacing inflation—and nowhere near where you need to be for a comfortable retirement.

Now, here’s the kicker: six of the market’s 10 best days occur within two weeks of the 10 worst days. That means the same people who jump out during a crash almost always miss the recovery.

This is why market timing is such a seductive yet dangerous game. It feels logical—protect yourself, wait out the chaos—but the market rebounds fast and without warning. And when it does? It rarely sends you a calendar invite.

Most investors miss these surges because they act on emotion. They hear bad news, they remember 2008, and they hit sell. But the market is a forward-looking machine. By the time you feel comfortable again, the gains have already been made.

📖 CNBC: Why timing the market is so costly

At Alphavest, we don’t try to predict the next headline. We build portfolios that are ready for it. In March, we talked about positioning clients to buy market pullbacks—not fear them. That strategy is working. Because in times of uncertainty, you want to be strategic, not skittish.

3. Rules Over Reactions: Why Our Playbook Wins

What separates high-performing portfolios from the average investor experience?

Rules. Not reactions.

Our 2025 playbook (which I previewed in March) is built on logic, discipline, and repeatable actions—not vibes. Here’s what that looks like in practice:

• Structured Notes: These offer a blend of downside protection with market participation. They’re ideal in volatile or sideways markets—something most portfolios aren’t prepared for.
• Private Credit & Short-Duration Bonds: We’re using fixed income that actually pays, even in an elevated-rate environment. Say goodbye to 1% CDs and hello to tactical yield.
• Selective Equities: While others are chasing the next big thing, we’re focused on mid-caps, dividend growers, and real AI innovators—not hype plays.

This isn’t set-it-and-forget-it. It’s active, intentional management. It’s also why our clients are positioned for growth while others are crossing their fingers and hoping Jerome Powell doesn’t sneeze on a Wednesday.

In other words, we’re not waiting for opportunity—we’re building portfolios that seek it out, manage the risk, and stay disciplined regardless of noise.

“Trying to time the market is like playing hopscotch in a hurricane—you might land a square, but you’re more likely to end up in the bushes with a busted ankle and a 1099 you didn’t see coming.” – Cokie

🎯 Ready to Stop Guessing and Start Planning?

Let’s talk about your goals, your timeline, and how we build a strategy that works—no matter what the market throws at us.

📅 Book Your 3-6-10 Allocation Strategy Session Here

“It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals – to measure their investment “risk” by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk.”  

An excerpt from Warren Buffett’s 2017 letter to Berkshire Investors 

Market Update

Market Update:

Is the US Headed for a Recession? What Analysts Are Saying About Q1’s GDP Decline

The slowdown comes as US firms stock up on inventory ahead of Trump’s tariffs.

Sarah Hansen

Key Takeaways

• The US economy contracted at a rate of 0.3% in the first quarter of 2025.
• The slowdown in GDP growth was driven by a surge in imports, as US firms attempted to front-run tariffs.
• Analysts say the slowdown, while concerning, is not necessarily a sign of an imminent recession.

Worries that the US economy is headed for a recession thanks to President Donald Trump’s tariffs are mounting in the wake of new data showing the US economy shrank in the first quarter.

The 0.3% annualized contraction in growth domestic product was driven by a 41% surge in imports, the new data shows, as firms scrambled to get ahead of the Trump administration’s sweeping new tariff regime. The first-quarter decline marks a sharp turn for the economy after GDP grew at a healthy 2.4% annual rate in the fourth quarter of 2024.

The contraction is seen as an early sign that Trump’s levies, which have already stoked anxiety among investors and pessimism among consumers and businesses, are weighing on real measures of economic activity. While the import surge may be a temporary phenomenon, there are broader concerns that a more pronounced economic slowdown may be ahead.

Economists say the tariffs could weaken economic growth and stoke inflation, at least in the short term. Many forecasters have raised their recession odds in response to a newly uncertain outlook and mounting risks. Still, analysts say one quarter of negative GDP growth is not itself a sign that a recession is underway.

Here’s more on what analysts are saying about Wednesday’s data.

Preston Caldwell, senior US economist at Morningstar

“While Q1 2025 real GDP growth was negative, this doesn’t mark the beginning of a recession. The cause of the large negative figure is a surge in imports (subtracting from net exports), as companies raced to stock up on imported goods before tariffs hit. In principle, that should have been fully offset by an increase in other expenditures accounting for the use of the imported good. After a good arrives at the US and is counted as an import, it has to be stored or shipped (counted as inventory) or sold to its final customer (counted as consumption or private fixed investment).

“Given the timing, most of the imports should have flowed into inventories. But while net exports contributed negative 4.8 percentage points to GDP growth, inventory accumulation contributed just 2.3 percentage points. Hence, there wasn’t a full offset from inventories. This may be corrected in later upward revisions to Q1 inventory data. Alternatively, Q2 may register a large increase in inventories, even as imports subside, which means that Q2 GDP growth could look artificially strong, just as Q1 growth looked artificially weak. This sort of noisiness in the GDP data at a quarterly frequency is not unusual, which is why it’s important to look beyond the headline data.

“Final sales to domestic purchasers (which strips out both net exports and inventories) increased by 2.3% in Q1 2025, a seemingly solid result. But looking further under the hood, we see some room for concern. Personal consumption grew by just 1.8%, its slowest in nearly two years. Private fixed investment jumped by 7.8%, but this is likely to weaken drastically in coming quarters as businesses cope with tariff impact and uncertainty.”

Dominic Pappalardo, chief multi-asset strategist for Morningstar Investment Management

“This report did little to give any concrete clarity on what to expect going forward in a post-tariff world. If anything, it did confirm that tariffs will have a major impact on consumer behavior and economic activity. The shifts seen today cannot continue through the remainder of 2025.

“Next quarter’s GDP will likely tell a much different story as tariffs will undoubtably have a profound impact. From a mathematical perspective, the impact from imports should be reversed and flip to a positive contributor as import activity will almost certainly crater. Other than the tariff-specific activity, today’s report generally showed continued economic expansion, albeit at a slower pace. Once again, economic data remains wildly unpredictable given the elevated uncertainty around tariffs and other policies, which will likely lead to continued high volatility in capital markets.”

Tim Quinlan and Shannon Grein, economists at Wells Fargo

“The US economy is at a greater risk of recession now than it was a month ago, but this 0.3% contraction in Q1 GDP is not the start of one. It reflects instead the sudden change in trade policy that culminated in the biggest drag from net exports in data going back more than a half-century.

“In a nutshell, tariff disruption introduced a lot of noise into the headline Q1 growth number. The question is for how long consumers and businesses can withstand uncertainty. If Q1 growth was influenced by a pull-forward in demand to get ahead of tariffs, to what extent should we brace for a hangover effect in Q2?”

Oliver Allen, senior US economist at Pantheon Macroeconomics

“The outright fall in headline GDP was mostly due to an unprecedented pre-tariff surge in imports, which probably is being imperfectly measured. But we nonetheless see clear signs that the economy already was fundamentally slowing in Q1. A period of stagnation now likely lies ahead if the current set of tariffs is maintained, with recession the most likely outcome if the additional reciprocal tariffs are imposed in full in July.”

Michael Reynolds, vice president, investment strategy at Glenmede

“The fall in real activity and acceleration in prices from today’s GDP report hints at potential stagflation but is still more modest in outcome than dire projections. Tariff-driven inflation and impacts on business/consumer spending will likely add to this concern in the coming months.

“Q1 GDP reflects the state of the economy before the Liberation Day tariff announcements. Investors should keep a close eye on how consumers alter their spending patterns as the impact of tariffs starts to flow-through to retail prices. Whether they continue to consume through higher prices (as they did in 2022) or pull back on spending will be a key determinant of the fate of the ongoing U.S. economic expansion. The impact of tariffs should, at minimum, lead to a notable economic slowdown and runs the risk of creating a near-term recession.”

Sal Guatieri, senior economist at BMO Capital Markets

“The US economy’s modest contraction in Q1 was mostly due to temporary issues, but the trade war will weigh this year.

“Tariff frontrunning and DOGE-led cuts explain much of the economy’s rough start to the year. But weaker exports and intense uncertainty will hold the economy back in the next couple of quarters. Once the Fed gets more clarity on the situation, it will likely address the economy’s weakness by resuming rate cuts in July.”

Brian Rose, senior US economist at UBS Global Wealth Management

“We are not overly concerned about the negative GDP print. After all, the economy expanded 2.5% in 2022 as a whole despite the decline in 1Q22. What is more concerning is the potential impact of tariffs, which is likely to cause a more substantial economic slowdown in the second half of 2025.”

The author or authors do not own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.

Alphavest Model Update 2025 YTD:

Winners & Losers

30-day & YTD Portfolio Winners

30-day & YTD Winners:

Not many months of my 29 years in the field reveal stocks up 20%+…Alphavest 10 Year Model holding, NU Holdings is both our 30-day and our YTD leader of the pack.  NU has helped the 10 Year Model exceed benchmark returns since 3/2024 with YTD returns of +0.54% vs. S&P500 -4.92% and a 1 year return of 12.38% v. 12.10% . Kudos to Warren B. on this fintech stock pick.

Of further mention is GOAU, a Gold/Commodity position new to the portfolio this year. Boosting the tactical nature of our Alphavest Dynamic Equity Model, which is 50% of our 6 year Bucket in our 3-6-10 Allocation model, and is now currently 60% in cash and commodities given the move of commodities to the #1 Spot on the Asset line-up in January 2025.  Alphavest Dynamic Equity Model is down -2.20% YTD vs. S&P 500 -4.92% over the same period.

30-day & Portfolio Losers:

30-day & YTD Losers:

3-star oil & gas position, EOG resources boasting a 3.42% dividend will remain in the Alphavest Aristocrats Portfolio and despite its hefty 12% portfolio position, the Model is up 1.93% YTD vs. DJIA of  -3.92% YTD.

What’s NEW:

Fond Farewells to Donna Hightower and Meet Angela Thorn! 

With fond farewells, if we’re lucky enough, we get to welcome….Unicorns!

That’s right! Donna and I searched high and low for just the right person to augment our “Dream Team” and when we found Angela, we then knew that unicorns are, in fact, REAL!

After on-boarding Angela, Donna felt it was prudent to take a permanent leave from the workplace to manage family matters from home, in Georgia.

From Donna: 

Dear Alphavest Family,

I hope this message finds you all well. I am writing to share with you that I will be stepping away from my role at Alphavest in order to take care of some important family matters. While I’m looking forward to caring for my family, it is with a heavy heart that I must make this transition back to Georgia. No “goodbyes” just “see you later.” 

Working alongside Cokie and getting to know each of you has truly been joyful and a rewarding experience. I always say Cokie has the best clients! Your kindness will stay with me always. From conversations on the phone to client gatherings, you left an impression on me and for that I am grateful! 

I’m excited to introduce Angela Thorn, who has joined the team. I have full confidence that Angela will bring a wealth of expertise and a fresh perspective. Alphavest is in excellent hands, and I know that the team will continue to thrive under her guidance.

Thank you all for the memories, and for the opportunity to be a part of this incredible journey. I look forward to seeing all the great things that lie ahead for Alphavest.

Alphavest wishes to hold a farewell reception the next time Donna and family are back in the zipcode—stay tuned! 

NOW. Meet Angela! Here’s what she wanted to share…

…Born in North Carolina (forever a Tarheel fan) but lived in the Cleveland Ohio area for a long time. That’s where I met my husband Tim in 2005.  We’ve been in South Carolina since 2014. My son Hayden is 13 and there’s no bigger fan of him than me! It’s the biggest blessing of my life to be his mother! I’ve been in the financial planning field for 24 years.  It’s such a joy to connect and get to know clients and help them reach their financial goals. My dad was the best person I’ve ever known. I lean on his words often, “When the water is muddy, stand still.”

Angela, a fellow woman in the field with a successful Series 7 under her belt, and more Schwab experience than Donna or myself, brings a wealth of expertise with her. 

With over 20 years of experience in investment management and financial planning, Angela specializes in building customized portfolios tailored to clients’ unique goals with vast experience collaborating with advisors and asset management teams to design strategic investment solutions, execute trades, and optimize asset allocations. Angela’s deep expertise in portfolio analysis, market research, and manager due diligence, supports us greatly in our in-house customized asset management of Alphavest’s proprietary models and allocations. Angela’s longstanding commitment to client success makes her a trusted partner in navigating complex financial landscapes with a client-centric lens.

I daily feel supported by her low-stress-high-competency demeanor and approach to best client outcomes. THANK YOU for welcoming Angela—while Donna’s shoes are big to fill, I feel sure we’ve met that challenge!