Compounding Requires Time, Stability, Patience
“The big money is not in the buying and the selling but in the waiting.” – Charlie Munger
Quiet markets can feel uneventful but oftentimes they’re when the real work of investing takes place. Compounding isn’t flashy. It requires time, stability, and patience. When volatility is subdued and trends are intact, progress builds quietly in the background, setting the stage for meaningful long-term results.
That doesn’t mean we’re idle. A systematic investing process doesn’t switch off when markets are calm; it keeps monitoring, measuring, and preparing. Calm periods are when discipline is reinforced, so that when conditions inevitably change, the system can respond with clarity instead of emotion.
In this month’s Note, we explore why periods of calm are powerful for investors — and why staying prepared, not passive, is the key to long-term success.
But first, here’s a summary of what transpired in the markets in August.
Disclaimer: This note is for general update purposes related to the general strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your exposure to any given asset class will depend on your goals, risk profile, and how tactical or static your risk profile calls for. Adjustments can vary across strategies depending on each strategy’s objectives. What’s illustrated above most clearly reflects allocation adjustments for the Growth Strategy. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth, please contact your advisor.
Asset-Level Overview
Equities & Real Estate
The S&P 500 fell 1.6% to start August, extending weakness from the final day of July. From there volatility declined with prices resuming their rising trend. In fact, by the mid-month, the benchmark index made new all-time highs, its 18th of 2025. As a result, trends across all timeframes remain positive and our portfolios will continue to be overweight.
The gap in 2025 performance between U.S. and international stocks — which has been slowly closing this summer as the U.S. has caught up — reopened in August, with both developed and developing markets outpacing U.S. Like U.S. equities, trends in international equities continue positive. Our portfolios will remain near their baseline allocations abroad, with a tilt toward developed markets.
Among the equity and quasi-equity allocations, real estate remains weakest. Price action is currently the epitome of rangebound, with year-to-date high and lows within about 5% of each other going back to the end of April. The outcome of such trendless conditions will be a continued allocation at the minimum in this asset class, with exposure previously being handed up to much stronger U.S. equities.
Fixed Income & Alternatives
At a high level, fixed income performance remains locked in the same pattern we’ve seen for several months. Short-term up to intermediate-term bonds continue to slowly churn mostly higher, while long-term bonds remain weak. This is generally the case whether one is looking at U.S. fixed income or abroad. The mixed results lead to a varied portfolio, with material exposure to the short-duration side of things and almost no exposure on the long end.
Within the multi-asset trend alternatives bucket, short-term fixed income futures and other related instruments remain the most significant in terms of allocation. Exposure to longer-duration bonds remains primarily in short positions. Commodities, such as gold and cocoa, also make up noteworthy positions. Meanwhile, the continued strength in stocks globally has caused net long exposure to increase there as well. The U.S. Dollar’s steady decline has caused this segment to increase allocations to foreign-denominated currencies.
Sourcing for this section: Barchart.com, S&P 500 Index ($SPX), 7/31/2025 to 8/1/2025; Vettafi.com, “S&P 500 Snapshot: The Jackson Hole Rally, 8/22/2025; Barchart.com, Real Estate Vanguard ETF (VNQ), 4/1/2025 to 8/26/2025
3 Potential Catalysts for Trend Changes
Inflation Data: Inflation held steady in July despite President Donald Trump’s tariff increases, which left a mark on some consumer prices and kept a Federal Reserve rate cut in play. Consumer prices were up 2.7% in July versus a year earlier, which is unchanged from June’s gain. Prices excluding food and energy categories rose 3.1% during the past 12 months, slightly above forecasts for 3%. Prices either fell or stabilized in categories consumers tend to pay the most attention to, such as shelter, energy, and groceries. This helped keep overall inflation in check. Energy prices declined, grocery prices were roughly flat, and rent growth was modest in July. The absence of exaggerated acceleration in price pressures removes a hurdle to lowering rates for the Fed, especially as there are growing concerns about a slowing labor market.
Jobs, Jobs, Jobs: The Labor Department reported that the size of the unemployed population hit a new recent high earlier in August. Continuing claims, which is an indicator of the size of the total unemployed population, came in at 1.97 million in early August. That is a new high since November 2021, evidence that slow hiring is frustrating job searchers. Additionally, a difficult jobs report from the Bureau of Labor Statistics included downward revisions showing the labor market was far less healthy this spring than previous reports indicated. Although hiring has stalled, recent initial-claims data suggest companies are not laying people off in volume, rather they are simply not bringing on new employees. One in five U.S. employers surveyed by the Conference Board said they plan to slow hiring in the second half of 2025; that is about double the rate of companies that anticipated bringing on fewer people at this time last year. It is currently taking the average worker 24 weeks to find a job after losing one, which is about a month longer than a year ago.
Housing Brightening: Sales of existing homes rose unexpectedly in July. The news increased hopes that the moribund housing market may be improving and that activity can gain more momentum this fall. Home sales were up 2% from the prior month to a seasonally adjusted annual rate of 4.01 million. The housing market is stuck in a third-straight year of depressed sales. However, some analysts say the fall season could see sales. Inventory of unsold homes – both new and existing – has also reached the highest level since November 2019, which is a positive sign for home buyers and a reason why the rate of annual price growth is slowing. More than 20% of listings had some kind of price cut in July, and average home sales prices are now falling in some parts of the U.S., especially in the Sunbelt. The median existing-home price in July was $422,400, a little lower than the record price in June, but still up 0.2% from a year earlier.
Sourcing for this section: The Wall Street Journal, “Inflation Held Steady at 2.7% in July,” 8/12/2025; The Wall Street Journal, “U.S. Jobless Claims Rose Last Week,” 8/21/2025; The Wall Street Journal, “More U.S. Companies Plan to Slow Hiring in Second Half of 2025,” 8/21/2025; and The Wall Street Journal, “Home Sales Surprisingly Rose in July While Prices Eased,” 8/21/2025
Calm Continues: When Stability Becomes the Strategy
“The stock market is designed to transfer money from the active to the patient.” – Warren Buffett
Another month has passed with little to report in markets — and that’s not a complaint. Despite a steady stream of economic headlines, major indexes barely moved in August. Volatility remained subdued, and our portfolios require no significant changes as a result. It’s a good reminder: investing success isn’t always about reacting. Sometimes it’s about the patience and discipline to let the work you’ve already done keep compounding.
Why a Quiet Market Can Be So Powerful
While it’s natural to associate tactical investment strategies with rapid response to market events, the reality is that periods of low volatility are often when they perform best.
When conditions are calm, compounding has room to work. Gains are less likely to be disrupted by sudden downturns, which allows progress to build steadily. Costs also stay low. Fewer trades mean fewer transaction costs and lower tax implications, preserving more of each dollar earned.
Additionally, trends can gain strength. Stronger segments of the market — which in 2025 have been areas like technology and growth-oriented sectors — have time to extend their leadership, which can enhance relative returns over more static approaches.
Prepared, Not Passive
Of course, stability today doesn’t guarantee calm tomorrow. Our process continuously monitors market conditions so that when the tone shifts, we’re ready to adapt. That readiness is key: markets don’t send calendar invites before they change direction, and protecting capital during drawdowns can have a dramatic effect on long-term outcomes. Avoiding a major decline doesn’t just save dollars in the moment — it shortens the time needed to recover and helps investors remain confident in their plan.
For now, however, the market environment is working in favor of long-term investors. The absence of major disruption means our existing positioning continues to serve clients well, and we are content to let this stability work on their behalf. At Spartan Planning Group, we believe successful investing is as much about restraint as it is about action. In quiet markets like this, restraint isn’t inaction — it’s strategy.
Disclaimer: this note is for general update purposes related to the strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your particular exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth please contact your advisor. This email and the data herein is not a solicitation to invest in any investment product nor is it intended to provide investment advice. It is intended for information purposes only and should be used by investment professionals and investors who are knowledgeable of the risks involved. No representation is made that any investment will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. While every effort has been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Historical data are presented for informational purposes only. Investment programs described herein contain significant risks. A secondary market may not exist or develop for some investments portrayed. Past performance is not indicative of future performance. Investment decisions should be made based on the investors specific financial needs and objectives, goals, time horizon, tax liability, risk tolerance and other relevant factors. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Investors should consider the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. The Advisor’s ADV, which contains this and other important information, should be read carefully before investing. ETFs trade like stocks and may trade for less than their net asset value. Spartan Planning Group, LLC (“Spartan” or the “Advisor”) is registered as an investment adviser with the United States Securities and Exchange Commission (SEC). Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the Adviser has attained a particular level of skill or ability. Indexes are unmanaged and do not incur management fees, costs, and expenses. Spartan’s risk-management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk. There are risks associated with any investment approach, and Spartan strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Spartan strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Spartan Strategies’ shorter-term tactical allocations, which can result in more concentration towards a certain asset class or classes. This introduces the risk that Spartan could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal. International investments may involve additional risks, which could include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks. Diversification strategies do not ensure a profit and do not protect against losses in declining markets.