July 2025 Commentary

summer breeze

Powered by large cap tech names, stocks touched fresh all time highs in July (Nasdaq 100 +2.4%, S&P 500 +2.2% MTD) while low VIX levels and a steep VIX futures curve continued to signal consensus that for now, risk is greater in the future than the present (chart).

TCM Volatility Dashboard signals YTD 07/31/25. Source: TCM. Click for larger image

Avoiding hedges that are generally unprofitable under such conditions, TCM strategies had a solid month with all strategies seeing gains led by the tech-heavy Hedged Disruptor (+3.8% MTD, +22.1% YTD).  Continuing to outperform their respective indexes in a challenging year, Tactical Beta (+2.1% MTD, +9.3% YTD) and Tactical Q (+2.3% MTD, +11.6%) both reached all-time highs in July, helping keep the diversified Legacy Navigator (+1.8% MTD, +16.3% YTD) on track for its best year since 2020.   

With geopolitical tensions off the front page and the Fed once again on “pause” citing potential inflationary effect of tariffs, the broader macro environment was little changed in July.  However, heading into the seasonally more volatile fall months with tensions potentially resurfacing in Russia and reciprocal tariffs scheduled to take effect in August, the wind may be about to pick up once again.  As always, we will take our cues from the collective wisdom of the world’s premier hedging marketplace.

Thompson Capital Management is a registered investment adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.