IN-DEPTH ANALYSIS AND INSIGHTS DELIVERED MONTHLY

Artificial Intelligence is proving it will change the world, but one area AI cannot address is our emotions and behaviors as humans. “Robo-advisors” first popped up following the 2008 financial crisis and sought to leverage AI to offer low-cost financial advice and investment management. However, many people are uncomfortable with the idea of a robot advising them about something as important to their livelihood as their money. And like it or not, money is emotional.

Learn More from June 2025 Brief – Managing Your Money and Your Emotions

Tariffs have become the primary talking point when it comes to the economy and investment strategy in 2025. With news constantly shifting over which deals are on, or off, the table, one thing seems certain; foreign goods have been getting more expensive. As the hot summer weather approaches, it’s worth considering how these tariffs may impact something that helps you keep cool and entertained: your beverage of choice. Whether you’re lounging on a beach or hiding indoors with the AC on full blast, you might find your favorite CH₃CH₂OH-infused drink costing more this summer. One way to avoid many of these rising costs? Reach for good ol’ American-made products on the shelf.

Learn More from May 2025 Brief – Red, White, & Brew

The tariff shock continues to reverberate throughout the market with the Trump administration continuing to defend its actions, focusing on, “sometimes you have to take medicine” as they seek to rebalance trade deficits and re-shore manufacturing and production back to the USA. This is a rapidly developing situation that is likely to see further downside until we get some negotiations. Tariffs are likely here to stay, even if they are rolled back less onerous.

Learn More from April 2025 Market Brief – Anatomy of a Bear

With the tariff war heating up from a simmer to a boil, it’s a good time to take a step back and look at how the world has shifted in the last few decades. The trend of de-globalization and onshoring (or near-shoring) has been accelerating since the global financial crisis and moving even faster in a post-COVID world. The pandemic showed just how vulnerable far-flung supply chains can be to disruption, which caused many companies to begin building in redundancies and bringing manufacturing closer to home. We would argue that peak global trade happened in the early 2000’s and since then, the world has been shifting away from free global trade.

Learn More from March 2025 Market Brief – Divergent Deglobalization

As we kick off February, markets are weathering multiple assaults on their bull run. We should be rejoicing a pickup in profit growth across multiple sectors with the S&P 500 on pace for a 10% growth in profits vs. 7% anticipated. But earnings are taking a backseat to politics as the Tariff War 2.0 began in full 2/1/25. The opening salvos of Tariff War 2.0 began against Canada and Mexico with a 25% tariff on all imports from Mexico and Canada, exempting energy resources from Canada at 10%. China will also see a 10% tariff on all imports. Importantly, the US government is also suspending the “de-minimis” exemption for packages and shipments under $800 addressed to individuals. The de-minimis exemption has been a huge driver of global e-commerce – think Temu, Shein, or baubles from Esty international sellers. The point of the de-minimis exemption was to allow insignificant and small items to be disregarded for regulations, duties, or taxes in the context of international trade. Suspending this exemption makes international e-commerce exponentially more difficult and expensive.

Learn More from February 2025 Market Brief – The Uncertainty Premium

Markets are reacting sharply to a new potential threat: what if the USA is not the leader in AI technology and others have figured out how to do it better and more efficiently? That potential game-changing question was brought up by DeepSeek, a Chinese AI app that was recently launched in the US. DeepSeek is majority owned by Lian Wenfeng’s quant AI focused Hedge Fund, High-Flyer. They announced the development of DeepSeek in March 2023 and by all measures have exceeded expectations. This app was developed as a response to OpenAI’s ChatGPT, which launched in late 2022 and caused a large scramble to keep up by Chinese tech firms. DeepSeek is like ChatGPT but with a few noticeable differentiators. DeepSeek develops open-sourced free AI models, which means multiple developers can inspect and improve on the software. Their first opensource AI model R1 competes with ChatGPT in areas such as reasoning and code generation and has become the #1 download in the iPhone app store as an AI assistant App. In a very short time (days!) they have overtaken ChatGPT as the top-rated free app. China is flexing its AI muscles this week, and US tech companies seem to be on the back foot.

Learn More from January 2025 Market Brief – Game Changer?

Dear Santa,

I have been very good this year, with minimal volatility and producing 20% returns for the second year in a row! I included more friends in my rally this year, not just the Magnificent 7, and I brought along utilities, financials, and industrials. I even invited some of the old-school blue-chip names like WMT and AXP to join the rally party. I only dropped -8% one time all year, not even the normal -10% correction that would be expected. And with the VIX below 15, you can tell I have been consistent and upward trending. I was very nice this year, not naughty!

Learn More from December 2024 Market Brief – S&P’s Letter to Santa

October has garnered the reputation as a spooky month, and not just due to Halloween. The dreaded “October surprise” is typically a nasty political shock and the market has experienced extreme historical volThe election overhang is finally behind us, Q3 earnings season is about 90% done, and the bull market has survived its historically weakest period with nary a blemish. But even with all that noise comfortably behind us, there is a feeling now of, now what? And for many, the worry cycle has begun once again. The What-ifs are endless with a new administration looking to pivot policy and potential for unprecedented overhauls to government (DOGE- the Department of Government Efficiency) or the removal of the Fed’s independence loom in the distance. We often warn about waiting for disaster and betting on doom-and-gloom. And we caution investors about reading too deeply into geopolitical events as they are poor predictors of market directionality. atility in October’s past. But we view October through a more positive lens; we are about to enter the strongest 6-month seasonal period for equity markets. Even in election years, November and December are often very strong, typically powered by the Santa Clause rally to close out the year.  

Learn More from November 2024 Market Brief – Moving On

October has garnered the reputation as a spooky month, and not just due to Halloween. The dreaded “October surprise” is typically a nasty political shock and the market has experienced extreme historical volatility in October’s past. But we view October through a more positive lens; we are about to enter the strongest 6-month seasonal period for equity markets. Even in election years, November and December are often very strong, typically powered by the Santa Clause rally to close out the year.  

Learn More from October 2024 Market Brief – Spooky Season; A History of the October Surprise

Portfolio construction is a delicate balance of diversification vs. conviction. Often the proper allocation is driven by Modern Portfolio Theory (MPT) and an efficient frontier, which was developed in 1952 by Harry Markowitz in his dissertation on Portfolio Selection.

Learn More from September 2024 Market Brief – USA vs. Everybody Else