The Intelligent Investor's Almanac
Your Bi-Weekly Guide to Markets, Movements, & Money.
Presented By Ken Majmudar & Ridgewood Investments
Issue 2 • March 16 to March 31, 2025
Never miss another valuable edition of The Intelligent Investor's Almanac again.
Your TL;DR Institutional Intelligence
- Market insight: The recent market disruption is uncomfortable, however, history shows that similar downturns were eventually followed by strong recoveries.
- Strategic Opportunity: For long-term investors, this dip will likely create openings for buying high-quality stocks at better valuations than earlier this year.
- Risk Alert: Policy uncertainty from the Trump administration, the Federal Reserve’s higher-for-longer signalling, and worries about inflation pressures from the new tariffs are weighing on consumer and investor confidence.
- Action Point: Review your portfolio with a long-term perspective and consider whether you have the right combination of high-quality assets. Check if you are a potential candidate for a Cash Balance Plan (more on this below) for tax efficiency and wealth accumulation.
The Value Investor
Ken Majmudar, CFA & Founder of Ridgewood Investments
Since the November 2024 election, markets have experienced notable fluctuations. On Election Day the S&P 500 closed at 5,929.04 and reached a record high of 6,147.71 on January 23. However, as of March 10, it has declined to 5,614.56, marking a 9% decrease from its peak.
Consumer sentiment has also shown variability during this period. The University of Michigan’s Consumer Sentiment Index was 71.8 in November, rose to 74.0 in December, but then declined to 71.1 in January and further to 64.7 in February. This decline reflects growing consumer concerns about the economic outlook amid market volatility.
These movements underscore the dynamic nature of financial markets and consumer confidence, emphasizing the importance of a disciplined, long-term investment strategy.
It’s easy to say, “Buy when things are cheaper,” but in practice, it’s one of the hardest things to do. When markets are falling, fear takes over and bad news dominates. Valuations seem irrelevant, and the pain of further losses makes even great opportunities feel risky.
However, as Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.”
Value investing isn’t about chasing what’s popular; it’s about recognizing when quality assets are trading at a discount to their true worth. This is where having a coach or mentor can be invaluable: someone who provides perspective, reinforces sound principles, and helps you stay anchored in long-term thinking when the crowd is panicking. Those who master this don’t just survive downturns; they turn them into their greatest opportunities for compounding wealth.
As someone who has been practicing the value investing skillset for decades, here is something I suggest you do:
Take this moment to practice the value investing mindset — look for opportunities with long-term value and growth potential. You don’t even need to buy anything, the point is to build your skillset by keeping your eyes open for options others don’t see because the market is in a panic.
Recent Market Turbulence - Opportunity or Warning?
As mentioned above, the past few weeks have been volatile for the markets.
While unsettling, this is nothing new. Corrections like these have happened many times before and often reflect shifting investor sentiment rather than a fundamental breakdown. Tariff concerns, slowing job growth, and uncertainty over monetary policy have created a short-term pullback, but historically, markets have absorbed these shocks and moved forward.
Rather than signaling a broader crisis, this correction serves as a reminder that markets don’t move in a straight line. It presents an opportunity for investors to reassess risk exposure, focus on quality holdings, and remain disciplined amid uncertainty.
Why Markets Are Falling: Understanding the Key Drivers
1. Trump’s Tariffs and Their Market Impact
2. Inflation Stickiness and the Federal Reserve’s Next Move
3. Sentiment Shifts and Investor Psychology
Keeping This Correction In Perspective
1. It Prevents a Market Bubble
2. It Shakes Out Weak Hands
When stocks decline, short-term, speculative investors tend to panic and sell. This allows stocks to move into the hands of long-term and patient investors that create a more stable market foundation.
For instance, in the aftermath of the 2008 financial crisis, Warren Buffett’s Berkshire Hathaway invested $5 billion in Goldman Sachs and $3 billion in General Electric, securing favorable terms that later yielded massive returns.
Seth Klarman’s Baupost Group acquired distressed bonds, including CIT Group’s debt at 65 cents on the dollar, locking in high yields.
These cases illustrate how disciplined investors use downturns to accumulate quality assets at a discount, positioning themselves for large gains when markets recover.
3. It Creates Buying Opportunities
For disciplined investors, market pullbacks offer great entry points into quality businesses at better valuations. Many investors who stayed the course during previous corrections came out ahead.
For example, in 2022 the S&P 500 declined by approximately 25% from its January peak to its October low. Sectors like technology and growth stocks were particularly affected. However, long-term investors who maintained or added to their positions benefited as the market rebounded once inflation pressures eased and monetary policy stabilized.
Patience is Rewarded In Time
The US economy’s fundamentals remain very strong. The labor market has been resilient with unemployment at 4.1% and wage growth outpacing inflation since mid-2023. Consumer spending remains robust, and corporate earnings have not deteriorated significantly.
While it’s tempting to react to short-term noise, periods of downturn are a normal and necessary part of investing. Smart investors use these periods to rebalance their portfolios, add to high-quality positions, and prepare for the next leg of growth.
If you have any concerns about your portfolio, now is the time for strategic adjustments, not emotional decisions. As always, we’re here to help you navigate the markets with a long-term, value-driven approach.
If you are interested in a free Portfolio Review, click the button at the end of this newsletter to schedule a time to talk with us.
Dynastic Wealth – Tips on Preserving and Building Your Legacy
The Little Known Retirement Hack for High-Income Professionals
For many high-earning professionals such as doctors, lawyers, business owners, and consultants, retirement planning is about more than just savings; it’s about maximizing wealth while minimizing taxes.
Most professionals hit a ceiling with traditional 401(k) plans, which limit how much they can contribute each year.
Many don’t realize there is a way to save significantly more, reduce your tax burden, and accelerate your path to financial independence.
It’s called the Cash Balance Plan (CBP): a retirement strategy used by top professionals and business owners to build multimillion-dollar nest eggs while cutting their tax bills dramatically.
Why High-Earners Trust a CBP
If you’re making $300,000 or more per year, chances are your annual tax bill is a six-figure headache. While 401(k)s and IRAs provide some relief, their contribution limits are too low to make a significant dent in your taxable income.
A well-designed CBP offers an alternative by allowing you to:
- Contribute far beyond 401(k) limits (over $300,000 tax deductible contribution per owner in some cases)
- Take large tax deductions, reducing your taxable income significantly
- Enjoy tax-deferred growth, accelerating wealth accumulation
- Have asset protection against creditors under federal law
- Roll over assets into an IRA at retirement, providing flexibility
Setting Up a Cash Balance Plan: The Right Way vs. The Wrong Way
At Ridgewood Investments, we’ve helped many professionals and business owners strategically design CBP’s that fit their financial goals while remaining compliant with IRS rules.
- The Ridgewood Way: A well-structured plan that maximizes tax savings while ensuring flexibility for your future. It accounts for your business structure, cash flow, employee contributions, and investment strategy to create a plan that works for you.
- The Wrong Way: Many CPAs and financial advisors simply “plug in the numbers” without considering long-term implications. This leads to rigid plans, unexpected costs, or compliance headaches.
That’s why designing a customized, forward-thinking Cash Balance Plan is crucial.
Is a Cash Balance Plan Right for You?
- Reduce your tax burden
- Maximize your retirement savings
- Grow your wealth efficiently
Here’s to building lasting wealth,
Ken Majmudar, CFA
Founder & Chief Investment Officer Ridgewood Investments
P.S. If you’re ready to explore how our institutional-grade investment approach can work for your portfolio, let’s schedule a time to talk below.
Gain Industry – Level Intelligence For Your Investment Strategy
Transform your approach to wealth building with institutional-grade insights. Schedule a private discovery call with Ken and the Ridgewood team to:
- Analyze your current portfolio positioning
- Explore sophisticated investment opportunities
- Design your personalized wealth architecture
Building generational wealth requires institutional-grade thinking. Let’s discuss how our sophisticated approach can work for your family’s future.
Important Disclosure: Ridgewood Investments is a registered investment adviser. This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.