There's war in the middle east and there will be huge impacts on your portfolio! Today we talk about how war-related uncertainty and conflicting economic signals are creating unusual market behavior, making it difficult for investors to interpret short-term movements. Broad market declines across many asset classes can indicate de-leveraging rather than money simply rotating elsewhere, and geopolitical tensions, rising oil prices, weakening job data, and potential stagflation risks are adding pressure to the economy. While some sector rotation into energy, commodities, and defensive assets is occurring, be wary that wartime conditions disrupt normal market trends, making strategies like “buying the dip” risky. Now is the time for risk management as preserving capital during periods of uncertainty is often more important than trying to time short-term market moves. Today we discuss...
- How misinformation, AI-generated content, and limited reliable sources make it difficult to understand what is actually happening during geopolitical conflicts.
- How negative political messaging often backfires psychologically because the human brain tends to ignore the word “not” and focus on the core concept.
- The unusually volatile week in markets, where prices swung sharply day-to-day despite ongoing geopolitical tensions.
- Markets do not always react logically to major events like wars, with assets sometimes moving in unexpected directions.
- A key explanation for broad market declines was de-leveraging, where leveraged positions are unwound and excess liquidity effectively disappears from the system.
- Investors rarely know the full reasons behind short-term market movements because many institutional trades occur behind the scenes.
- "Buying the dip” works in bull markets but can lead to significant losses during bear markets or uncertain environments.
- During wartime conditions traditional market frameworks often break down, making predictions especially unreliable.
- Reduce risk exposure and avoid aggressive trades until geopolitical uncertainty becomes clearer.
- Recent economic data show job losses and rising unemployment, which adds pressure to an already fragile economic outlook.
- Capital is rotating into defensive areas such as energy, commodities, defense stocks, and gold.
- Market rotations are normal in healthy markets but can become distorted when geopolitical shocks occur.
- Holding cash can be a strategic decision during uncertain markets rather than a missed opportunity.
- How falling interest rates could eventually lower mortgage rates and trigger more activity in the housing market.
- Investors should focus on protecting capital and managing downside risk during periods of extreme uncertainty.
"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 âfirst do no harmâ. 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