Stock Talk - You Get What You Pay For: Stock Market Update, Friday December 5, 2025

Episode Date: December 5, 2025

Market volatility isn’t a Black Friday sale, and in this video, I walk through why investors may experience drawdowns even during strong long-term markets like the S&P 500. I share historical context around common pullbacks, how different market “factors” such as growth, value, and momentum rotate over time, and why style shifts can make it difficult to “change horses mid-race.” I also review post-2020 index performance, recent sector moves, and the trade-offs between higher expected returns and higher volatility. My goal is to help you understand how risk and reward tend to travel together, and why having a plan that reflects your comfort level with downside swings may be important over a full retirement timeline.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy — with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, almost everyone I know loves the deal. Maybe it's a good Black Friday savings deal, maybe it's a 20 to 30% off sale or discount. Unfortunately, when it comes to the stock market more often than not, over the long term, you get what you pay for. While the overall SMP 500 is averaged around 10% per year over the last 100 years and around 15% per year, over the last five years, the annual return profile is far from linear each and every year. If you invest long enough, you're likely to endure unrealized losses and downside volatility of varied sizes each and every year if you're invested in the S&P 500 or any other index. The reward for investing in equities is the return. Investors, the risk is enduring the

downside volatility at times. Here's some great data from Charlie Beello on annual draw deals and their frequency. Look at that sharp. Minus 5% declines in the S&P 500 happens nearly every year, happens nearly every year, while a minus 10% decline happens twice that rate happens nearly every year and a half, every 18 months. The dreaded bare market decline of 20% happens a little over once every four years, while a recessionary decline of 30% plus happens one out of 10 years. Investors, you invests long enough, expect at some point to a year lifetime. The S.P 500 will lose over half its value. Given its rarity, let's call that one a generational decline. Even with the SAP, there is a wide discrepancy where this annual return comes from.

Over the fast few decades, higher quality, higher marginal return on invested capital companies that are growing faster or have more consistently tended to outperform lower growth, higher indebted companies. However, with this growth profile, often comes a higher level of annual variance in stock returns. We've seen this dynamic play out a lot over the past few years post-COVID shutdown. Many times clients and prospects have expressed, quote, all I want is higher returns with lower volatility. Yes, we have to educate them. That's not how investing in public equities work. I wish it was that simple. Unfortunately, but it comes to risk

measured by return volatility or reward measured by annual return over long time periods and get what you pay for. Yes, investors, there are times when the market shifts what it's rewarded from a style perspective. The new term that institutional investors call that is using factors. Sometimes it's pure price momentum is rewarded. That's when an investor buys a group of stocks because, well, other investors are buying those stocks and they are exhibiting price momentum versus the indexes. Investors, other times, investors are looking for accelerating fundamentals from a revenue and earning standpoint to buy. We've just been through a two-month period where there was a titanic short-term shift in what factor investors were rewards. Mid-October, the highest growth

equities have lagged the overall market at the expense of more GARP. That's growth at a reasonable price or even small cap value stocks being rewarded. Let's follow the data if you want a recent example of what I'm talking about. I'm going to use the return data since we exited COVID in the second quarter of 2020. So the data I'm presenting is from April 1st, 2020 through November 28th, 2025. I'm taking the S&P 500. Equity index is the base return because that's what most equity investors nowadays compares themselves to as over 50% of all flows into the stock market are in that. index. The growth equity vehicle I'm using is the NASDAQ composite. That's ticker symbol CCFP index. The more value biased index, almost everyone knows. I'm going to use is the Dow Jones

Industrial, which ticker is IND. Here's the absolute return detail of these three indexes over the post-COVID time period. Approximately five and a half great years for equities off the COVID lows. Here's that tickle. The annualized total return for all three indexes off the lows was greater than 17.5% per year. The SP500 return. turned 21.41 percent, the growth biased NASDAQ, 23.48, and the slower growth, but more value bias, Dow Jones, 17.7 per year. All great numbers, all not likely to be continued in 2006. However, to achieve the highest compounded annual return of the NASDAQ, one also had to endure higher downside volatility. For example, in 2022, the markets experienced an earning recession,

and the S&P 500 dropped minus 27 and a half percent for peak to trough. investors, higher growth NASDAQ, fell by even larger percentage during this time, falling by over 37.7% peak to trough, amounting to an additional loss of 37% versus the S&P 500's decline. Alternatively, more value biased and higher dividend yield, Dow Jones Index, declined as well, but it fell by less than the S&P 500. About minus 22% during this same time period, amounting to almost 19% less than the S&P 500's fall. Investors, while a lower magnitude, two difference, an investor will see a similar dynamic played out during this year's March April tariff teutum with the growth indexes following by a higher percentage than the S&P 500

and the value biased higher dividend yield indexes following by less peak to drop. Let's fast forward to this last November and get more granular on what happened in various indexes and sectors in the market during a volatile month to show you just how hard it is to change horses or styles mid-race. The SEP 500 in stock indexes were mixed during November. But it bounced hard over that last week, Thanksgiving week, over 3.5% just that week. So it finished up 0.1% for the month. And NASDAQ was down minus 1.6% while the Dow Jones was up about half a percent in a very volatile month. The main overall theme was big tech stocks and AI weakness in a rotation into defensive stocks.

Following a very strong year-to-date performance, tech stocks dropped minus 4.4% and they were the worst performing sector in the U.S. in the month of November. Of course, tech stocks have been the best performer year-to-date and the best group since the COVID low five and a half years ago. But that trend reversed sharply during November. Investors had the markets not rallied significantly over the last four days of the month, this weakness would have been even more apparent. How bad was November for year-to-date growth leaders. Well, AI-related stock baskets, including the neocloud groups, was down minus 19%. semiconductors were down minus 5.8%. Data centers were down minus 4% ending the month with big losses.

The Mag 7 stocks declined minus 3.1%. And that's even with Google being up almost 14% in November. Bessor's Nvidia declined over 12.5% weighing on the group despite strong earnings. Post that early tariff blow, leaders in the retail trading themes got punished even more in November with crypto down minus 17% and meme stocks down. minus 10.2%. Economically offensive stocks and cyclicals declined minus 7.4%, while more defensive equities, which have materially lagged year-to-date, as well as since the COVID lows, outperformed with a gain of up 11.2%. That was led by health care stocks, being up 9.1% in November, benefiting

from cheaper valuations and a tear of clarity. Wester's fault has said year to date, as of this variety, the growth-oriented NASDAQ was still up almost 21.75% year to date on completely price return. The core S&P 500 index was up 17.8% in total return split between about 16.5% price and 1.3% dividends, while the more value bias Dow Jones Index was up almost 13.9% and that's 12% in price and another 1.90% in dividends. But investors, remember, you get what you pay for and to generate the higher growth in the NASDAQ stock index, you had to endure much higher volatility in the form of larger downside losses during the April minus 21% selloff in the S&P 500, as well as November's brief decline of 6%.

Investors, what does this all mean to you? Our advice to viewers is to meet with your financial advisor determine how much risk or potential losses you're comfortable with over your given time investment horizon. From there, her advisor should be able to design a portfolio of investments blended from tools that weigh capital growth, capital preservation, or income generation that will best meet your needs over your retirement so long as you stick to your plan and you don't try to change horses or riders mid-race. However, investors, remember, there are no guarantees in investing in equities, even though over long time periods they've proven one of the best ways to save, compound wealth, and combat inflation. investors, whether you desire growth or income or a combination of both in your portfolio, the entire Oak Harvest team is here for our clients doing what we can to plan for you and your family's future, regardless, what stage you're at in your career or in your retirement.

All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not. not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Specific portfolio actions or strategies

discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.