With everything going on in the world and the markets, we should talk about our second favorite word in the English language—diversification.
In 2025, investors who diversified their portfolios to include bonds and international stocks have reaped significant benefits compared to those solely invested in domestic equities.
Chastain Wealth’s philosophy is to provide our clients with the money they need to meet their financial goals with as little risk as possible.
The only way to do that is to diversify what you invest in.
- Vanguard Total Bond Market ETF (BND): As of March 14, 2025, BND has delivered a YTD return of 1.57%.
- SPDR S&P 500 ETF Trust (SPY): The SPY, representing U.S. large-cap stocks, has experienced a YTD decline of 4.06%.
- Vanguard Total International Stock ETF (VXUS): International equities, as tracked by VXUS, have a YTD return of 9.13%.
- Schwab U.S. TIPS ETF (SCHP): This fund, focusing on Treasury Inflation-Protected Securities, has achieved a YTD return of 2.65%.
- iShares Global REIT ETF (REET): Global real estate investments, represented by REET, have a YTD return of 2.02%.
- Risk Mitigation: Diversifying across asset classes and geographies reduces exposure to region-specific economic downturns. While U.S. equities have faced headwinds in 2025, international stocks have outperformed, balancing potential losses.
- Inflation Protection: These bonds are directly tied to inflation. When inflation increases so does the value of these investments thereby helping a consumer’s “purchasing power” to keep up with inflation.
- Income Generation: Bonds and real estate investments often provide steady income through interest and dividends.
- Time to Wait Downturns Out: Bonds also tend to hold their value or increase during stock market downturns. For our clients in or close to retirement this allows us to use those assets to provide the income they need. We aren’t forced to sell assets that are down in value.
It won’t always be the case that a diversified portfolio does better than a non-diversified one.
But our clients have all worked hard for their money and want to use it to live their best life and maybe pass some on to the ones they love.
A diversified portfolio is the most efficacious way to do that.