January 6th, 2026
“While we have referenced ‘correction’ several times of late, we continue to remain constructively bullish on the markets and the economy. We have used the market rally to take some profit and redeploy capital in laggard individual companies and/or specific industries via Exchange Traded Funds. We believe investment rotation into these areas will prove rewarding in the future.”
From Q3 Newsletter
Market Overview
Q4 2025 is in the books! 2025 returns are as follows:
DJIA 13%
S&P 500 16%
NASDAQ 20%
FMG CORE 20%
2025 is done and in the books! And what a year it was. Not since the year of the pandemic had we seen the level of volatility that we witnessed in 2025. I suggested that “this was the most volatile quarter we have seen” every quarter last year. Having said that, it is difficult to complain about a bumpy ride as long we landed safely….and profitably. And that we did. Let us take a look: Q4 started hot out the gate continuing the rally from Q3. Upbeat earnings reports from the mega Tech sector and a flurry of announced AI transactions powered the NASDAQ to its seventh consecutive monthly gain, the longest streak since 2018. Speculative trades such as crypto currency, silver, and gold benefitted as well. Even the “meme stocks” made a comeback! We suggested that market participants were beginning to show signs of what is known as “irrational exuberance” by chasing the markets higher in fear of missing out (FOMO). While we may have been a bit early on the call for a correction, other firms and market prognosticators began to follow suit. Our politicians created additional fear in the markets when the two parties could not come to a budget agreement, and the government shut down. We began to see additional cracks in the market as the word “bubble” was being tossed around quite a bit. The average investor, and even most prognosticators, could not wrap their heads around the monetary size of all the deals being announced in the AI space. Still, in the face of these red flags, the mega caps - in the likes of NVDIA, Google, Meta, and Apple - all hit new highs while pushing the markets to historical levels. To add to the enthusiasm, the Federal Reserve announced another twenty-five-basis point cut in interest rates in the last week of October. Again, although we suggested the markets were trading high, we were reminded of the old Wall Street adage: “Don’t fight the tape.”
The markets stumbled out the gate in November. Market participants began to take heed to the calls for an overdue correction and warnings of an AI bubble. AI stocks, crypto currency, gold, and meme stocks showed signs of weakness. Was this a precursor? Also, the government shutdown was starting to negatively impact the overall economy with government employees missing checks, food stamps being cut off from needy recipients, and airlines cutting back on flights. Consumer sentiment plunged to an all-time low. The markets were further negatively impacted when October employment reports came in showing the largest number of layoffs in 22 years. Adding fuel to the pullback was the revelations that famed fund manager, Michael Burry had put a large short position (bet that stocks would go down) on the AI sector. This sent tremors through the market as Burry got his fame for calling the 2008 meltdown resulting in the Great Recession. The market received a short-term reprieve in the second week of November when the government finally reopened, bringing the longest running government shutdown to an end. The markets rallied briefly, sending the DJIA above 48,000 for the first time. We then began to see a divergence in market activity. The Tech heavy NASDAQ began to pull back, paying homage to the calls of a Tech bubble, however, the DJIA, and to some extent, the S&P 500 held steady. Why? As we intimated last quarter (see the quote at the top of this Newsletter), sector rotation was starting to happen. Meaning, money leaving the Tech sector was being redeployed into Value stocks and other individual companies and sectors that had been lagging. The rationale is that these companies and industries were inexpensive and were beginning to play catch up. Having said that, the markets rallied into the last week of the month.
December started like that of November, in a downward spiral. Bitcoin and the Tech sector led the way as investors began to dial back on their speculative furor. Pessimism about the overall market and the economy continued to weigh on investor psyche. The market received some reprieve early in the month, but not for good reasons. November job figures came out again showing weakness in employment. The following day, the inflation report – CPI – proved that inflation has remained tamed. The market bounced higher on these two reports as it set the stage for the Federal Reserve to cut rates at the December meeting. On December 10th, the Federal Reserve did just that, cut interest rates by one quarter of one percent. Unlike other rate cuts, this one did not move the markets as it was widely expected. With the downward spiral of the markets, and negativity abound, the markets were looking for a reason to end the year on a bright note. Then alas, a few days before Christmas came the much talked about, “Santa Clause Rally.” After 4 straight days of rallying, the S&P notched yet another record for the year.
So, we closed out one of the most volatile economic years on record filled with trade wars, market gyrations, and the longest Govt. shutdown in history. Yet again however, our economy, the markets, and our nation demonstrated its collective resiliency. We do see caution ahead. The rallying cry in the country is affordability, or lack thereof. The rising cost of healthcare continues to haunt and tariff expense are beginning to show at the consumer level. The national debt is at an all-time high and political division is at its recent worst. While we are consummate optimists, we are also realists. While we hope we are wrong, we believe challenging times await us. We will govern ourselves accordingly in our market activity.
The Way Forward
We enter the new year with the markets trading at historical highs and the engine driving the markets – AI/Tech industry – in bubble territory. As we mentioned earlier, we believe that there are challenges ahead that may create additional strain on the markets, but do believe that our collective resiliency will kick back in. We see that the broadening of the market rally that we have been calling for is finally coming to fruition. Value stocks, “Dogs of the Dow” and other market rotation theories will cushion any downside, while leading the way up post correction. We believe the benefits of AI efficiency will begin to show in corporate earnings. We believe that these strong earnings coupled with falling interest rates will deliver yet another positive year. I would be remiss were I not to mention the threat of continued international strife. While we are cognizant of it, and will govern ourselves accordingly to protect portfolios, it is not something that we can quantify.
As stewards of your capital, it is our objective to preserve your wealth while delivering returns that, over the long term, will enable you to meet and exceed your financial goals. That has not and will not change. As always, feel free to contact us to discuss your specific portfolio(s) and financial situation. We appreciate your vote of confidence and thank you for allowing us to serve you.
Ivan Thornton
Managing Partner, RIA
______________________________________________________________________________________________________
October 6th, 2025
“To be clear, we continue to remain constructively bullish on the markets and the economy, with good reason. We do believe that there will be an interest rate decrease this year, which will bode well overall. We believe the market rally will continue to expand beyond the AI-specific companies, and other industries will begin to catch up”.
From Q2 Newsletter
Market Overview
Q3 2025 is in the books! YTD returns are as follows:
DJIA +9.36%
S&P 500 +13.66%
NASDAQ. +17.11%
FMG CORE +19.70%
Q3 started off where Q2 ended, on a tear! Many investors put money to work out of FOMO (Fear of Missing Out) and pushed the markets higher early on. Soon, the markets calmed down in anticipation of Q2 earnings reports to come out. This was difficult to project given that it was the first quarter to report on the impact of tariffs. In the last week of July, it was reported that GDP grew at a rate of 3% in the second quarter. This was good news that provided market participants with a reason to cheer. Why? Because Q1 GDP recorded that the economy had retrenched. Remember, two straight quarters of negative GDP is the definition of a recession. Many market participants – present company included - had been expecting the economy to retrench once again given the prospects of the potential negative impact of tariffs. We dodged that bullet. Consumers continued to consume, and the tariff hit was not as bad as expected. However, what was reported was that employment contracted at an alarming rate. Also, when corporations reported Q2 earnings, many were muted about what they saw going forward as the threat of tariffs continued to haunt them. Well, these two pieces of information spooked the markets, sending them lower. Soon after, President Trump went on the warpath with Federal Reserve Chairman, Jerome Powell when he once again failed to lower interest rates, particularly given the weakness reported in employment numbers.
In the beginning of August, the markets traded wobbly seeking direction. Was this the beginning of the seasonal summer slowdown, or would stocks rally given that earnings reported in July prove to power through the projected negative impact of tariffs? By the second week of the month, “FOMO” momentum took hold as investors began “chasing” stocks higher. This rampant buying sent the indices to all-time highs. Much of the excitement was caused by a weak employment report. Many concluded that the Fed would finally cut rates at its next meeting. At that time, we cautioned that market was “extended” meaning that, in our estimation, the markets were setting itself up for a pullback. While August added to equity markets’ YTD performance, it did so with the markets trading at their most expensive valuation….ever! Again, we reiterated that the growth/Tech momentum was peaking, and the Bull run was getting tired. While we do not fear market corrections, we do believe that taking some profit to rebalance portfolios is prudent.
September started on a negative note. No surprise here given that inflation had reared its ugly head again and the markets were looking to consolidate July and August gains. As well, investors were waiting for what has historically been the worst performing time of the year for equities, August - October. Then came the turn of events. Employment numbers came in very weak, suggesting that the economy was softening. Could it be that the Federal Reserve would finally cut rates to boost the economy? Investors certainly thought so and thus sent the markets on a record run with the Dow surpassing 46,000 and the S&P surpassing 6,600, for the first time. Though we enjoy a market rally like everyone else, we were cognizant that the markets were already overvalued. A proverbial tug of war between the Bulls and the Bears ensued. The decisive moment came in the third week of September when, alas, the Federal Reserve finally cut rates by one quarter of one percent. Unlike other rate cuts, this one hit with a thud as it was anticipated. FOMO once again kicked in and by the end of the month, the Bulls had taken charge and the markets resumed their upward trajectory. In the end, the markets wrapped up on a strong note with the month of September giving its best performance in 15 years. Though we had been, and continue to suggest that a near term, seasonal correction was forthcoming, we enjoyed the ride as we were reminded of the old Wall Street adage: “Don’t fight the tape.”
The Way Forward
While we have referenced “correction” several times of late, we continue to remain constructively bullish on the markets and the economy. We have used the market rally to take some profit and redeploy capital in laggard individual companies and/or specific industries Financials, Pharmaceuticals, Retail, et al. We believe investment rotation into these areas will prove rewarding in the future. Stay tuned.
As stewards of your capital, it is our objective to preserve your wealth while delivering returns that, over the long term, will enable you to meet and exceed your financial goals. That has not and will not change. As always, feel free to contact us to discuss your specific portfolio(s) and financial situation. We appreciate your vote of confidence and thank you for allowing us to serve you.
Ivan Thornton
Managing Partner, RIA
April 1st, 2025
“This bullish sentiment going into the new year can very well be undermined by the increasing international discord given the challenges in the Middle East, China, Russia, Iran, etc.”
From Q4 Newsletter
Market Overview
Q1 2025 is in the book! Good riddance! The returns are as follows:
DIJA. (.92)%
S&P 500. (4.37)%
NASDAQ. (10.28)%
FMG CORE. (6)%
Are we having fun yet? The year started off on a downward trend following the year-end selloff. As we said then, the markets were experiencing a post-election hangover, as well as investors repositioning portfolios to reflect the new world order. Market participants had grown tepid once the realities of many of the Trump proposals were thought through (more on that later).
Markets finally bounced in the second week of January when economic reports indicated that inflationary pressure appeared to have subsided at the consumer level. This information provided the catalyst the market was looking for and we got the market bounce we needed. Then came DeepSeek sending NVDIA, Broadcom, and every company with AI affiliation spiraling, resulting in the worst one-day Tech industry performance in three years. NVDIA shed some $600 Bil in value alone, the largest one-day devaluation in history. DeepSeek? What the heck is that? As it turns out, DeepSeek is a Chinese based AI start up that announced a revolutionary AI process and product. Accordingly, this product will do what all the AI companies are racing to do quicker and more powerful, utilizing less energy at a cheaper price. Lions and Tigers and Bears, oh my! How can some no name startup create such a stir? Welcome to the world Tech industry investing. It is not for the risk averse or fainthearted. As typical, the markets overreacted on the downside. Most stocks snapped back once there was a better understanding of DeepSeek and how it would impact the rest of the AI companies. However, Nvidia continued to trade down as it has the most exposure to the DeepSeek threat. Stay tuned.
To add to the market volatility created by the AI scare, newly minted President Trump came out swinging, post inauguration. In his “Shock and Awe” strategy, President Trump signed a litany of Executive Orders – over two hundred of them – that caused heads to spin. His actions sent the message that there was a new sheriff in town. Between his attacks on illegal immigration and DEI, his intense interest in Greenland and the Panama Canal, and the aggressive endorsement of crypto currency, chaos was the call of the day. Then, in the last days of January, the President lived up to his promise and announced that he was imposing tariffs – a tax on imported goods - of 25% on Mexico and Canada, and 10% on China. This was not received well by Mexico, Canada, or China, but even less so by the investing public. Mexico and Canada immediately responded with retaliatory tariffs sending the market into a tailspin. Any basic course in economics will conclude that there are no winners in a trade war, however, there are two guaranteed loser: consumers and market participants! Signs of inflation came roaring back in mid-February when the CPI ticked up, all but dashing the hopes of an interest rate cut happening anytime soon. And, with the constant threat of tariffs waiting in the wings – which would clearly be inflationary – even the thought of an interest rate hike was starting to be discussed. The fears of what is yet to come by the impact of tariffs came when Walmart, long considered the thermometer for the American consumer, provided the first shot across the bow when it reported earnings in the third week of February. Though they reported stellar earnings, they spooked the market with their “going forward” statements. The company strongly suggested that future earnings would be adversely impacted by the new expense structure created by the forthcoming tariffs. Walmart sources much of its products from Mexico and China. Tariffs would be a double-edged sword of damage as costs of goods would increase by the amount of the tariffs which would hurt their profit, and as well, they would need to pass on some of the higher prices to the consumer which would of course, be inflationary. Soon after, a consumer sentiment report came out, and to no one’s surprise, it was weaker than expected. In fact, it was the lowest level in four years. The markets responded accordingly and went into a downward spiral, recording the worst week of the year and thus erasing all the year-to-date gains. The month ended with the worst performance since April. Between the threat of a trade war, Federal employee mass layoffs, geopolitical unrest, and uncertainty with the direction of the new Administration, confusion ran amok. The Trump Bump got bopped!
March began with more negative announcements coming out of the White House that negatively impacted the markets. First it was announced that the Administration will further crack down on technology chips sold outside of the U.S., sending the Magnificent Seven into correction territory. Next came an announcement of across-the-board tariffs on Mexico, Canada, and China that would have negative impact on agriculture, the auto industry (steel), housing (lumber), and retail (clothing), just to name the most impactful. When President Trump provided details of his plans as it relates to the trade war, tariffs, and proposed tax cuts, anyone with knowledge of economics and finance came away with one word: Stagflation.
Stagflation is the combination of stagnant corporate earnings growth and price inflation. Stagnant growth and inflation separately are two of the most vicious culprits of the economy and market performance. Put them together at the same time and you release a two-headed monster. That is what is wreaking havoc on the economy and the markets. Tariffs will cause US companies to pay higher prices for foreign goods. These tariffs will hurt corporate earnings as they will not be able to pass on all the additional expense to consumers, thus hurting their profits (stagnant growth). The consumer will now be faced with higher prices (inflationary). The net result will have a negative impact on the economy and the markets. With that said, the markets continued to plunge with the NASDAQ entering correction territory (down greater than 10% from its high), with the S&P and DJIA approaching it. March was the worst monthly performance for the markets since 2022, driven by tariff uncertainty. Not a pretty picture.
The Way Forward
As we have said many times over, markets often move to excess both on the upside and the downside. We are not there yet (on the downside). Given all the noise in the first quarter surrounding tariffs, debt ceiling, international strife, Govt layoffs, etc., one would think that the markets would be down even further. As we go to print, President is officially rolling out his Tariff strategy. To no one’s surprise, the markets are tanking. We believe one of two things will occur: The Administration will continue to push the tariff strategy until the markets breakdown and force the Administration to retreat, or the Administration, Canada, Mexico, China and others will come to realize that this battle is putting the global economy at risk and come to acceptable trade agreements between the countries. We think the ladder will occur. And until it does, we believe that the near-term environment will continue to be gloomy. Should the market weaken enough to create opportunities, we will take advantage of it. Should this conundrum threaten the portfolio, we will move to protect. Stay tuned.
As stewards of your capital, it is our objective to preserve your wealth while delivering returns that, over the long term, will enable you to meet and exceed your financial goals. That has not and will not change. As always, feel free to contact us to discuss your specific portfolio(s) and financial situation. We appreciate your vote of confidence and thank you for allowing us to serve you.
Ivan Thornton
Managing Partner, RIA
_____________________________________________________________________________________________________
January 4th, 2025
“As we go to print, the Wall Street Journal is running a series on the optimism surrounding the U.S. economy that is sweeping markets higher. This and other bullish sentiments on display give us pause.
While we remain long-term bullish, we are cautious in the near term……we believe that this market needs time to digest the many headwinds that exist.”
-FMG Q3 Newsletter
Market Overview
2024 is in the book! The returns are as follows:
DIJA +12.9
S&P 500 +23%
NASDAQ +28.6%
FMG CORE. +35%
Certainly no one could be disappointed with this performance. Looks great, but as we all know, it didn’t come easy. Though the bull market was still intact at the beginning of the fourth quarter, our concerns of difficult “headwinds” we referenced above reared its ugly head. At that time, the Middle East was just starting to take a dangerous turn and U.S. dockworkers voted to strike. Oil prices shot up – the largest component of the inflation calculation - (because of the crisis in the Middle East) and interest rates jumped higher. Add to that, the official launch of the most divisive presidential campaign in modern time. Undoubtedly, these occurrences sent the market into a tailspin as we suggested would be the case. Fortunately, the headwinds we warned about were short lived and didn’t have the negative impact as expected. The markets quickly calmed down. Otherwise, the month of October is a blur in memory compared to what was to follow in November and December. The markets seesawed back and forth during the month with the nation focused on the political environment both in D. C. and abroad.
We all held our collective breath heading into the month of November as we approached what had been built up as the most consequential presidential election in recent history. Volatility runs amok! Market direction changed with the daily results of different election polls. Some of the volatility could be blamed on institutional “gamblers” however, some of the volatility can be explained by investors desire to get ahead of, or out of the way of the Trump Trade. Labeled the Trump Trade because positive or negative polling for candidate Trump would move selective industries accordingly. Positive polling sent Energy, Crypto and military stocks higher - industries that candidate Trump favors. Conversely, it sent Green Energy, Healthcare and China related stocks lower as these are industries that would feel his rath. Though volatility at times is unnerving, we utilize these market swings to take advantage of the opportunities it creates.
Better market entry points are created when volatility sends stock valuations lower. Better market exit points are created when the market proves too exuberant.
The election came and went, and our great country remains intact. Post-election results provided the largest one-day gain since 2022. Excitement in the markets was led by the notion that under the new Administration 1) expiring tax cuts would be extended, 2) additional tax cuts would be forthcoming and, 3) a more business friendly regulatory environment would soon be ushered in. To add fuel to the market momentum, two days after the election the Federal Reserve cut interest rates another one quarter of one percent. Given these two events, the markets responded by posting the best week of the year leading to historical highs. The post-election rally lasted exactly one week led by a 40% jump in TSLA. Theory has it that TSLSA stands to benefit from its close ties to the incoming Administration, particularly as it relates to government tax breaks and contracting. Given President elect Trump’s support of Crypto currency, that market rose 35% in the days following the election. The Energy industry was also a leading benefactor of President-elect Trump’s position on fossil fuels. As he always says, “drill baby, drill!” Conversely, the Alternative Energy sector took a hit, as too did the Pharmaceutical industry given incoming HHS Administrator Robert F. Kennedy’s well known anti-vaccine stance. As well, anything related foreign trade, particularly China, came under pressure as President elect Trump has been very clear about his strategy of implementing tariffs on foreign competitors to level the playing field. In addition to the Trump-favored industries robust performance post-election, the market experienced what is known as a “relief rally”. At the end of the day, investors want clarity of direction in the economy and the markets regardless of who is in the White House. The relief rally continued throughout the month of November, thus turning in the best monthly performance of the year. I would be remiss if I didn’t acknowledge that Bitcoin had its best performance in its short history, passing the $100,000 point. When asked how and why, there have been several answers. “Animal Spirits”, “Risk-On Frenzy”, “FOMO” (Fear of Missing Out)? We think it was Big MO….as in momentum. President-elect Trump has surrounded himself with “Bitcoin bros” whom clearly have his ear. Add to that, his choice for SEC Chairman is a known Bitcoin sympathizer who promises to unsaddle the industry of onerous regulations. Will the positive momentum last? Time will tell. For us, while we do not discourage those who wish to participate in Bitcoin, we maintain that, at the moment, it is a speculative play that needs time to play out before we are willing to commit to it. We’re in good company as Warren Buffet’s opinion on Bitcoin is a bit harsher.
The market entered the month of December continuing its winning ways. In the first week, the market’s momentum pushed the DJIA and S&P 500 to record highs. Adding to the momentum was strong economic data indicating that inflation continued to cool. This indicator provided the best evidence yet that the Fed’s monetary policy was paying off. The “Trump Trade” and strong economic data made the market red hot…until it wasn’t. As we have said many times, markets tend to move in excess on the upside and the downside. This time was no different. The party ended when the Federal Reserve threw cold water on the market with a hawkish statement warning of the possible need to pause its rate cuts. While the Fed did cut rates an additional twenty-five basis points during its December meeting, it suggested that the economy was growing and that inflation may raise its ugly head once again. As such, the Fed indicated that Wall Street’s projected rate cuts in 2025 may not come to pass. Party over! With that news, the DJIA tanked over 1000 points following a 12-day losing streak, its longest in 50 years. The S&P 500 and red-hot NASDAQ followed suit. Wall Street’s expectations that the Fed would continue to cut rates throughout 2025 was a major reason why the markets had been on a tear. With the Fed suggesting otherwise, the markets tumbled, turning in the worst monthly performance since April. Reason for concern? Not hardly. We saw it as a speed bump to slow things down a bit and a reminder of the market’s reality. The markets continued to trade down for the remainder of the month. Hopes of a Santa Clause Rally (markets tend to trade higher in the last five days of the year) were shut down.
The Way Forward
Clearly, Wall Street is excited about Trump 2.0. In a recent report, Goldman Sachs suggests that the S&P 500 will eclipse 6,500 (currently at 5,800) a more that 12% move from here. Morgan Stanley agrees. We certainly hope they are right. We believe that valuation expansion and earnings growth will be the theme for 2025. Also, sector rotation will be prominent as investors look for better valuation in industries and companies that have underperformed the markets but are nonetheless high quality. Having said that, we believe that the markets will continue to drive higher, albeit, at a less torrid pace. While we do not see any of our current positions negatively impacted by the new Administration’s posture, we certainly see companies and industries that we will add to portfolios to take advantage of the new Administration’s priorities. Conversely, we will avoid industries that we believe may be adversely impacted by the new Administration. Like every investment advisor in the industry, we are consumed with researching how best to position your portfolios under the new Administration. Our job is to constantly be on the hunt for emerging trends, undervalued sectors, special situations and individual companies to take advantage of in an effort to make you money. Spoiler Alert: This bullish sentiment going into the new year can very well be undermined by the increasing international discord. While it is difficult to factor in the potential risks - Middle East, China, Russia, Iran, etc., - we are certainly mindful of the risks associated with each. Stay tuned.
As stewards of your capital, it is our objective to preserve your wealth while delivering returns that, over the long term, will enable you to meet and exceed your financial goals. That has not and will not change. As always, feel free to contact us to discuss your specific portfolio(s) and financial situations. We appreciate your vote of confidence and thank you for allowing us to serve you.
Ivan Thornton
Managing Partner, RIA
______________________________________________________________________________________________________