There is a big move coming in the S&P 500. In today's episode we dive into the recent market volatility triggered by geopolitical tensions, tariffs, and investor sentiment. We talk on the challenge of predicting markets and the importance of investing discipline, especially amid fear-driven reactions. And despite a possible short-term bounce, the market may remain in a downtrend. Tariffs also play a role in all of this so it's important to note real intent behind economic policy shifts, and how media narratives often distort the bigger picture. Learning to separate political bias from financial decision-making is key. Today we discuss...
- The title “Big Move in the S&P 500 is Coming” turned out to be timely despite being chosen a week in advance.
- Recent market volatility was attributed to unexpected tariffs and general investor fear.
- The S&P 500 remains significantly overvalued, with a current PE ratio around 34 versus a historical average of 17.
- A 50% drop in the market would return valuations to historically normal levels.
- Investor psychology suggests more panic-selling could happen early in the following week before a potential bounce.
- Markets typically don’t move in straight lines and operate within up-and-down momentum cycles.
- Conservative positioning is advised; sitting on the sidelines may be the safer play for now.
- The only assets showing strength recently are crypto (Bitcoin, Ethereum), the VIX, bonds, and a few niche equities like corn and select homebuilders.
- Investors should separate political views from market expectations—markets don’t move based on who's in office alone.
- Hedge fund selling contributed to the rapid downturn, but circuit breakers were not triggered.
- New tariffs aim to support U.S. employment and reduce reliance on China but will likely raise import prices and disrupt supply chains.
- Decoupling from China is a long-term goal, but current policy actions are more blunt than strategic.
- Trump’s unpredictable comments can swing markets dramatically, underscoring the need to focus on fundamentals over headlines.
- The COVID-19 pandemic acted as a catalyst for the market downturn, but the market was already overheated prior to 2020.
- The U.S. government may benefit from locking in lower rates on its debt, providing some relief if the economy slows
- Tariffs and market volatility may lead to long-term disruptions, affecting investments like 401(k)s, as negotiations continue.
- Gold is considered a secret bull market amid chaos, with institutional and government demand increasing.
- Bonds are not performing as strongly as in previous market downturns, indicating ongoing challenges in fixed-income markets.
- The crypto market has shown unexpected resilience despite a broader market selloff, which could be a slightly bullish indicator.
- China and the US are in a trade conflict, with the US trying to counter unfair tariffs, but this may lead to shifts in global supply chains to countries like Vietnam and India.
"Cash is not trash... Cash is King" - Kirk Chisholm
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Today's Guest: Kirk Chisholm
Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group, an independent Registered Investment Advisor located in Lexington, MA. He has been providing wealth management services to individuals, executives, entrepreneurs, and their families since 1999. He is an outside the box thinker, risk manager, inflation expert, blogger, podcaster, and all-around interesting guy. Kirk is dedicated to developing lasting relationships with all of his clients and their families. One of the benefits of working with Kirk is his patience, empathy, and his ability to provide clear and easy-to-understand explanations to complex financial topics.
Kirk developed a unique philosophy for the wealth management industry called Risk Management First. The medical field has a similar way of thinking of “first do no harm”. This philosophy focuses on risk management for clients in all aspects of their lives in ways the industry does not address. Risk management does not stop with investments. It also requires working closely with other professionals to address areas of their financial lives not currently being met.
In 2008, Kirk co-founded Innovative Advisory Group to address the needs not being addressed by the wealth management industry. It started with specializing in alternative assets held in retirement accounts (i.e. self directed IRAs/401ks). Then the company expanded into the specialization of college funding (i.e. planning, strategy, and paying the least possible for a high quality education), Risk Management First, exit planning for business owners, advanced planning (estate, tax, etc), and providing practice management and leadership training to other financial advisors, accountants and attorneys.
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Today's Panelists
- Kirk Chisholm | Innovative Wealth
- Douglas Heagren | Mergent College Advisors