News & Investment Updates From Hemlock Creek Wealth Management

Every June, we find ourselves doing the same thing: reviewing the first half of the year and comparing reality to expectations. Not because we believe predictions drive portfolios, but because the gap between what people thought would happen and what actually happened is often the most instructive part of the investing process.

Take small caps, international stocks, or interest rates — all areas where prevailing forecasts heading into 2025 have missed the mark.

Although we think they can be foolish, this isn’t necessarily a critique of the forecasts themselves. It’s a reminder that the most important thing in investing isn’t being right — it’s about having a process and being prepared regardless of what happens.

That’s why at Hemlock Creek Wealth Management, we design systems that can adapt to shifting conditions without relying on foresight. When small caps looked poised for a breakout, our models stayed cautious. When international equities still seemed out of favor, our systematic investing process told us to lean in.

In this month’s Note, we reflect on what’s unfolded so far in 2025 — not to pat ourselves on the back or call out misplaced predictions, but to reinforce the value of a systematic, long-term mindset in a world that keeps trying to throw curveballs.

But first, here’s a summary of the global asset classes utilized in our portfolios and their exposures for July.

One of the biggest misconceptions in investing is that the best system is the one that does everything. In reality, the strongest systems are those that do a few things well — and intentionally avoid the rest.

At Hemlock Creek Wealth Management, we believe the art of system design lies not in complexity, but in clarity and robustness. That means focusing on what works across a variety of market environments, not just what works in backtests or ideal conditions. It also means making tough decisions about what to prioritize — and being honest about the tradeoffs. Responsiveness might improve timing but increase taxes. Broader exposure might boost diversification but dilute conviction. There’s no free lunch.

Like all investment strategies, trend following comes with tradeoffs. But unlike many approaches that try to mask them, it brings those tradeoffs to the surface — where they can be understood, managed, and ultimately turned into strengths.

In this month’s Note, we explore how trend following, like life, requires choices. We also share how the current environment continues to highlight the importance of staying focused on what works — rather than trying to be everything at every time to everyone.

But first, here’s a summary of the global asset classes utilized in our portfolios and their exposures for June.