How Astoria is Navigating Volatility

As of Friday, April 4th, the S&P 500 Index (SPX) has declined approximately 17% from its all-time high on February 19, 2025. Additionally, the Russell 2000 Index is down 25% from its November 25, 2024 peak. Astoria is proactively implementing the following firm-wide strategies in response to ongoing market volatility and increasing signs of economic contraction.

The firm is currently focused on:

1. Portfolio Reallocation – We are and have been actively reducing exposure to expensive and cyclical growth sectors and reallocating toward more defensive stocks. Notably, our portfolios were underweight the “Magnificent 7” stocks prior to the recent market downturn, which has contributed positively to our portfolios. Tilting away from the Mag 7 is why we want to use equal-weighted products. Past performance is not indicative of future results.

2. Tax-Loss Harvesting – We are systematically realizing losses where appropriate in order to enhance after-tax returns across client portfolios.

3. Fixed Income Positioning – Fixed income is expected to play a crucial role in the months ahead. Our allocations remain dynamic, with a current emphasis on higher-quality corporate bonds and U.S. Treasuries.

4. Ongoing Portfolio Evaluation – We continue to conduct thorough scenario analyses and portfolio reviews to ensure alignment with evolving market conditions.

   
   

We believe the current environment reflects more than a temporary growth scare; rather, markets appear to be increasingly pricing in the risk of a recession. In such a scenario, we estimate that the S&P 500 could face an additional 5%–8% downside. Equity valuations remain elevated, with the index trading at approximately 19 times forward earnings—only three multiple turns below its February peak. Should earnings decline by 10%, which is consistent with historical recessionary patterns, further market weakness is possible.

Considering that the average bear market typically spans nine months, and we are likely only 1.0 to 1.2 months into the current downturn, a continued period of volatility may lie ahead.

Please reach out if you would like to talk with Astoria’s investment team about any of these initiatives or anything else on your mind.

Best,

Astoria Advisors

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There are no warranties implied. Past performance is not indicative of future results. Information presented herein is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. The returns in this report are based on data from frequently used indices and ETFs. This information contained herein has been prepared by Astoria Portfolio Advisors LLC on the basis of publicly available information, internally developed data, and other third-party sources believed to be reliable. Astoria Portfolio Advisors LLC has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to the accuracy, completeness, or reliability of such information. Astoria Portfolio Advisors LLC is a registered investment adviser located in New York. Astoria Portfolio Advisors LLC may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.

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