Current Market Activity
So far, through the beginning of March, the year has provided ups and downs in financial markets that continue to keep us on our toes.
Many companies that had seen their stocks rise nicely during 2025 have experienced descending prices this year. Such movement even brought one Wall Street analyst to remark that all the good companies are going down, and all the bad companies are going up!
This is especially true for tech stocks that center their businesses around software applications. Software applications are instructions that tell computers what to do to help us do things, such as plan our travel, keep our banking in order, and organize the world for us. The adjustment in stock prices relates to the fear that many of these software companies will be harmed by new artificial intelligence technology that reduces the need for their services.
We believe some of these fears are shortsighted. Dominant software companies, such as Microsoft and Google, and even those that rely heavily on software programming, such as Amazon, will continue to thrive and utilize artificial intelligence to their advantage.
There are also discussions about how artificial intelligence may reduce employment in the economy as companies replace their labor force (and their white-collar bosses) with computer programs that do the work just as efficiently, if not more so. Such revolutionary shifts have also caused unrest in the markets.
We believe that these fears are also overstated. Yes, we may have shifts in how labor is used, but we’ve seen such threats throughout history. Shrinking population growth may be an even more significant factor by creating a labor shortage. That is, will we have enough labor to do the jobs we need done? Surprisingly, it all may balance out.
As an example of some of the fluctuating software prices, Microsoft, a producer of software for everybody that uses office and computer storage applications, has seen its stock price drop 24% since October of last year. We believe this to be an incredible buying opportunity for such a quality company that continues to dominate its market. It will use AI to its advantage rather than being a victim.
We have come to site as an example of unjustified short-term fear by pointing out the story of Alphabet Corporation, which most of us know by the name, Google. This time last year many of the investment experts said that Google was behind in its software development and that it was losing touch in the market. As a result, during a six-month period the stock price dropped 27%. We realized that Google continued to be an excellent company with excellent leadership. We held steady. A short time later, when more information was available, the markets reignited their confidence in the company and the Stock climbed an amazing 108% from its 2025 low price.
There are many other companies that intend to use artificial intelligence to increase their bottom line, including insurance providers, travel companies, and medical services. The transition of a world moving toward more artificial intelligence will increase profits of many corporations but also result in labor cutbacks. Be prepared for many headlines and lots of discussion.
Iran War
The war with Iran has been another destabilizing factor in the markets. Although the markets initially reacted with relative equanimity after news of the invasion was broadcast, threats of oil shortages created a domino effect in oil prices, then, fears about rising consumer goods prices and reduced consumption, and even concerns about cruise ship profits.
Financial markets are driven by a combination of short-term emotions and short-term events. Oil prices have recently jumped related to the events in the Iranian war and the possible cut-off of oil supplies through important transportation routes. However, we believe these issues will be resolved, and that the overall ample supply of oil in the world will bring us back down to reasonable oil prices, and allow consumers to spend more of their money on other things besides gasoline.
Yes, we believe current price fluctuations are overstated. The future still portends a glut of oil in the world and therefore low fuel prices in the long-term.
Although we would never try to guess how prolonged the war will be or it’s many ramifications, if history is a guide, most economic effects will be short-lived and should not be a guide for long-term investing strategy.
Utility Companies Sector
One of the more interesting and fun sectors of the economy to watch in the investing world is that of utilities. Utility companies, such as Con Edison and Duke Energy, have historically been called grandma stocks because of their slow, but steady growth and history of paying pretty good dividends. About five years ago, many experts rang the death knell for utilities, claiming that we would all have our own home power generation, and that through other innovations, such as electric cars, we would have little need for utility companies.
It’s amazing how things can change in such a short time. Now we have come to realize that we need utility companies more than ever: for charging our electric cars, for providing reliable energy during bad weather, and to supply all the electricity needed by power-hungry artificial intelligence data centers, run by big computer companies.
As a result, not only do many utility companies still pay attractive dividend income, but the prices of their stocks have also appreciated very nicely, too. Such a component of a portfolio provides a nice opportunity for investors who fear significant volatility with their money to participate in asset value growth over time. Many clients have seen success pursuing this strategy.
Surprisingly, with profits of the utility companies continuing to rise, their elevated stock prices do not appear to be overinflated, and indeed still represent a good buying opportunity.
Bitcoin Cryptocurrency
The price of a leading cryptocurrency, Bitcoin, has been on a roller coaster for the last many months. Originally touted as a safeguard investment, like gold, it has generally moved with other financial markets, meaning that when investors get nervous, they sell bitcoin and when they feel confident, they buy bitcoin. Bitcoin shot up tremendously after the Trump election. We believe for two reasons. First, the people who supported President Trump thought that he was a big proponent of cryptocurrency and would help its price ascent. Second, the people who opposed Trump bought bitcoin as a safety net in case things fell apart. As it turns out neither side saw dramatic results on either front. So, by the end of last year, both sides began to sell some of their bitcoin interests to invest in other things such as gold, stocks, and bonds.
As a result, bitcoin ascended from $69,000 a coin right before the election in 2024 to a high of $124,000 in October 2025. But now it’s back down, way down, to about $68,000. Such large fluctuations make the general stock market, in contrast, seem like a smooth lake of stability.
We do not recommend cryptocurrency as an investment.
Bonds and Fixed Income
Meanwhile, for our clients who own bonds and other fixed income securities, which focus on preserving principle and paying steady income, you have done well. We have entered a cycle of stable interest rates and a relatively stable economy. We can find comfortable rates of 5% to 7% on such instruments, accomplishing this even when comparable yields that banks pay on CDs and money markets have declined significantly since the peak of interest rates.
Market Performance
| Sector / Asset Class | Year-To-Date Return |
| S&P 500 large stock bucket | +0.7% |
| Tech stocks group | -2.3% |
| Utility stocks group (ex. income) | +10.5% |
| Staples stocks (food, household) | +12.5% |
| Gold | +18.8% |
| Bitcoin | -15.8% |
| Bonds – Fixed Income (incl. income) | +1.2% |
| Preferred Stock (incl. Income) | +4.0% |
| CD rate, 1-year average | +3.8% |
We’d Love to hear from You
Besides preparing some tax returns for many of our clients, we are busy looking to take advantage of price bargains that currently exist in the market. If you would like to give us some of your input and reactions, even a short email, we would appreciate them very much.
The Dougherty Team
A Tradition of Excellence
4048 Deltona Blvd | Spring Hill, FL 34606
