In 1973, the United States was faltering. The president had just been reelected in a landslide but was presiding over an unraveling system: inflation was rising, wage and price controls were distorting the economy, the post-war global monetary order had collapsed, and public trust in government was deteriorating rapidly. By the end of 1974, markets had fallen sharply, and many predicted a long-term decline in American leadership. Sound familiar?
Today, in 2025, we find ourselves again in a moment where U.S. presidential decision-making is playing a central role in market turbulence. The S&P 500 has just posted its worst performance in the first hundred days of a presidency since Richard Nixon. Tariffs have been rolled out swiftly, in sweeping fashion, and with little coordination or strategic clarity. Business leaders are scrambling to reprice supply chains, and markets have responded with unease.
At Blair Hall Advisors, we take these developments seriously. We are global equity investors, and at the time of this writing, we are modestly underweight U.S. equities. Even so, U.S. stocks still represent more than half of the equity value in nearly every client portfolio. That positioning reflects a long-held view: for all its flaws, the American system is capable of self-correction.
History supports that belief.
The early 1970s were, in hindsight, a low point in American economic management. Nixon’s decision to end the convertibility of the dollar to gold (thereby dismantling the Bretton Woods system) was executed unilaterally and without a clear long-term framework. Wage and price controls, though briefly popular, were deeply distorting and failed to address the structural roots of inflation. The 1973 oil embargo only compounded the crisis. Markets were disoriented, policy credibility was weak, and Watergate was casting a long shadow over Washington.
And yet, within a decade, the U.S. economy had stabilized, reformed, and reasserted itself. New policy leadership emerged. Market-based reforms took hold. A wave of technological and financial innovation followed. From the early 1980s through the mid-2000s, U.S. equities led a remarkable multi-decade advance. American firms dominated global innovation. The dollar regained global primacy. Capital markets deepened and became more sophisticated. The story was not linear, but it was unmistakably one of renewal.
That pattern—of stumbling, self-inflicted wounds followed by reinvention—is deeply American. The U.S. system may appear chaotic at times, but it is unusually resilient, largely because it does not depend on any single leader or moment. Our public institutions bend under pressure but tend not to break. And markets, while reactive in the short term, eventually reward innovation, transparency, and legal reliability—areas where the U.S. continues to lead.
To be clear: we are not dismissing the risks. Policy error is a real and present concern. Trade disruptions can ripple unpredictably through supply chains, cost structures, and inflation expectations. Allies are reevaluating their reliance on American stability. But just as they did in the 1970s, these disruptions may also lay the groundwork for renewed U.S. competitiveness.
What does that mean for investors?
First, it reaffirms the importance of global diversification. We don’t assume any single country will dominate at every moment, and our positioning reflects that. Non-U.S. equities play a central role in our asset allocation.
Second, it argues for humility in market timing. While the market fell substantially in the mid-1970s, much of that period’s long-term damage was repaired in the years that followed. From 1975 to 1980, U.S. stocks rebounded sharply—and over the next ten years, including dividends, investors were rewarded with strong, positive real returns. Panic would have been costly. Perspective was more valuable.
And third, it reinforces our conviction that while leadership may falter, systems endure. The market isn’t pricing a single president—it’s pricing the long-term productivity of the American economy. That productivity comes from people, ideas, and institutions. Even when they are mismanaged, they remain capable of surprising strength.
We don’t know exactly how this period will unfold. But we do know that investors who kept their long-term focus through previous episodes of policy failure were ultimately rewarded for their patience.
If you’re feeling unsure about what today’s political and economic headlines mean for your portfolio, don’t hesitate to reach out. We are growing selectively, and we are always glad to hear from people who value thoughtful conversation and long-term perspective.
Warmly,
Tom and John
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