Portfolio update (May 2025)
A complete, transparent look into our portfolio, its value, and its performance in May and year-to-date.
"You have to have the fighting spirit. You have to force moves and take chances."—Bobby Fischer
Welcome back, Fluenteers!
The picture here might not tell a story to some of you, but others might immediately notice who these people are. On the right we have a young Bobby Fischer (a legendary Grandmaster in chess), and on the left we see Mikhail Tal (also a legendary Grandmaster in chess). This photo is from a tournament in Yugoslavia back in 1959. During this tournament, something extraordinary happened, which will summarize this month’s portfolio update.
He lost games during the tournament, notably against Keres and Smyslov, both of whom were considered favorites. Despite setbacks, he staged a stunning comeback, winning crucial games with tactical brilliance.
I might have hinted too much already, so let’s dive into this monthly update.
A Quick Reflection On May
May has been a true turnaround month in the market, if I must say so myself. We’ve endured the tariff-induced manic depression, and the market seems to be adjusting; some might even argue that the market has already adjusted.
In May, the S&P 500 rose ~6%, the Dow Jones by around 4%, and the Nasdaq by nearly 9%. This is the argument of many investors that the market is now accustomed to, or has adjusted to, the uncertainty in the market. I would still argue that investors need to be cautious about being optimistic. The fact remains that the market is still volatile and exhibits a certain degree of uncertainty.
May has been filled with improvements and setbacks:
President Trump's new tax bill introduced Section 899, potentially imposing additional taxes on foreign investments from countries with "unfair foreign taxes," including many EU nations, the UK, Canada, and Australia. This move has raised concerns about deterring foreign investment and increasing market volatility.
The U.S. Treasury announced a pilot program for a "fast-track" review process for foreign investments from allied countries, aiming to streamline approvals and encourage investment from trusted partners.
The European Parliament endorsed revised rules for screening foreign direct investments, particularly in sectors like critical raw materials and transport infrastructure. Member states are expanding their screening regimes to protect strategic industries.
India is working to enhance its appeal to foreign investors by streamlining regulations and promoting itself as a favorable destination amid global supply chain shifts. Former RBI Governor Raghuram Rajan emphasized the need for stable policies and proactive reforms to capitalize on this opportunity.
On May 28, the U.S. Court of International Trade ruled that President Trump had overstepped his authority under the IEEPA by imposing these tariffs, declaring them illegal. However, a federal appeals court granted a temporary stay the following day, allowing the tariffs to remain in effect during the ongoing legal proceedings.
After discussions between President Trump and European Commission President Ursula von der Leyen, the U.S. agreed on May 25 to suspend the proposed 50% tariffs on EU imports until July 9, allowing time for further negotiations.
On May 12, the U.S. and China agreed to a 90-day pause in their trade war, with the U.S. reducing tariffs on Chinese imports from 145% to 30%, and China lowering its tariffs on U.S. goods from 125% to 10%. This agreement provided temporary relief to global markets but left underlying issues unresolved.
Yes, there have been significant improvements, but there have also been setbacks.
I’m all for taking two steps ahead, one step back, and another two ahead. But, I would argue that we’re taking two steps ahead and two steps back as of late. Therefore, I’m slightly less optimistic than most other investors are currently.
Are investors optimistic? They are optimistic, yes.
Does this mean I'm bearish on the U.S. equity market or the global equity market? No, not at all. I’m a long-term bull on the global equities market, quite frankly.
However, I believe that the current optimism, hope, and ‘greed’ are not justified yet.
As companies and their stocks are soaring again, I’ve been cautiously sitting on the sidelines. I’ve been increasing my cash position in my portfolio, just to be sure. And, as mentioned in the previous portfolio update, I’m learning from my mistake by not having cash on hand to spend during market turbulence. We all know that turbulent markets tend to offer great opportunities, and next time I’m well-prepared for any ‘action’ that might occur.
"The single greatest edge an investor can have is a long-term orientation—and the liquidity to act when others panic."—Seth Klarman
Now, let's go over the fine details of my portfolio.
How Did Our Portfolio Perform In May?
Something funny happened…
In the last portfolio update, I said the following:
‘‘I honestly didn’t know how my portfolio performed in April until I started writing this update.’’
The month of May has been the complete opposite. I usually check my portfolio once or twice a month, to be honest. But this month, I must have checked it at least twice a week; that’s odd. During times of market turbulence and hectic periods, I refrain from checking my portfolio. But when the market starts soaring again, giving back the gains that’ve disappeared from our portfolio, I start checking again.
I learned something when I discovered this ‘flaw’ of mine.
Recency bias, hope anchoring, and loss aversion vs reward sensitivity.
During downturns, many long-term investors refrain from reviewing their portfolio to avoid emotional reactions (e.g., panic selling or stress). This is a protective behavior. When the market rises again, and especially when prior losses are being recouped, there's a dopamine-driven pull to check frequently, because it feels good.
You remember the recent pain of drawdowns. When green returns, you want confirmation: “Are we back to all-time highs yet?” or “Did I make the right decision not selling?” That curiosity becomes compulsive checking, especially when there's momentum.
Market volatility makes people feel helpless. When the market improves, checking your portfolio gives a sense of control, even though nothing has changed about the fundamentals or your long-term plan.
When the market crashes, we look away to avoid pain. When it recovers, we look often to enjoy the relief.
It reminded me how I’m human. However, recognizing it helps me stay mindful and keeps me on track.
Now, enough chatter about me, this isn’t about me.
Here are the numbers…