Unprecedented Event
Why Today’s Reaction Could Be the Start to the Next “2008” or “Covid” Moment in the Markets
Today, the stock market experienced a dramatic and historic selloff—one that may ultimately be remembered alongside 2008 and the Covid crash of 2020. The velocity and magnitude of the decline left even seasoned investors stunned. While the specific catalyst is still being dissected, the overall message from the markets is clear: uncertainty has returned in force, and capital is running for cover.
This Is Not Normal. This Is a Shift Made by the US President.
Major indices plunged from the opening bell and never found footing. Breadth was overwhelmingly negative, volatility spiked, and sectors that had shown relative strength were suddenly caught in the storm. This wasn’t just a tech unwind or a rotation out of high-beta names—this was indiscriminate selling, and it often signals something deeper.
Our Strategy Was Working—Until the Game Changed
Our positioning heading into this event reflected a high-conviction, long-term thesis. Our recent additions of European defense contractors and German infrastructure companies had been performing well. These were selected not just for their fundamentals, but for their strategic value in a reshaping global landscape—rising defense budgets, EU-backed infrastructure upgrades, and a post-pandemic rebuild narrative.
And while we continue to believe these companies will deliver value over the long term, even the best strategies are not immune to the effects of a global trade war or financial panic. Today was a powerful reminder of that.
No Reason to Ride It Down
In volatile environments like this, the smartest position can be no position. We are choosing to sit on the sidelines, protect capital, and wait for confirmation that the market has found a bottom. Trying to guess where that bottom lies is a dangerous game. We have seen too many investors try to “buy the dip” during moments like this—only to watch it dip further, and harder.
Cash is a position. Patience is a strategy.
We will Be Watching Closely For:
- Capitulation signs—volume spikes, volatility blowouts, and technical washouts
- Bond market behavior—particularly credit spreads and liquidity gaps
- Policy response—whether central banks or governments step in
- Market internals—like relative strength, sector rotation, and breadth recovery
- Tarif negotiations
In Summary
Today changed the tone of the market. What started as concern may now be evolving into crisis—and while we are not sounding the alarm bells of a full-blown meltdown yet, we are adjusting accordingly.
We remain confident in our long-term strategy. The themes we are currently invested in are defense, infrastructure, and de-globalization—are not going away. But right now, capital preservation takes precedence. We will wait, observe, and act when the dust settles.
The opportunity will come again and just like it did after the 2008 collapse and just like it did with vaccine stocks and after Covid.
Hafnia Financial, Inc., is a registered investment adviser. Information presented is for educational purposes only and is not intended to make an offer or as a solicitation for the sale or purchase of any specific securities, investments, or investment strategies. 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. Past performance is not indicative of future performance.
