There is a sector rotation happening and today we're here to discuss it! We also touch on the sudden U.S. conflict with Iran as this is not the time to start reacting emotionally to early headlines, misinformation, and media fear cycles. Keep in mind historical market reactions to prior military strikes; while volatility typically spikes, equity drawdowns have historically been modest and short-lived unless oil supply or credit markets break down. We also highlight that markets are driven more by liquidity and capital flows than headlines and investors should focus on historical patterns, sector positioning, bond duration strategy, and risk management rather than panic, while closely watching oil prices, credit spreads, and bond yields for signs of deeper systemic stress. Today we discuss...
- The concept of the “fog of war,” warning listeners not to trust early reports, viral videos, or emotionally charged headlines.
- Media outlets monetize fear and that investors should avoid panic-driven decisions.
- Historical data from past U.S. military strikes was reviewed, showing that market drawdowns are typically modest and short-lived.
- Oil prices spiked on geopolitical risk, but the move was framed as a fear premium rather than confirmed supply disruption.
- The U.S. dollar was expected to strengthen in the short term as capital seeks safe-haven assets.
- Sector rotation was highlighted, with money moving out of mega-cap tech and into energy, materials, and defensive sectors.
- Utilities, staples, and healthcare were identified as traditional late-cycle or risk-off sectors.
- If capital exits large tech allocations, there are limited sectors large enough to absorb those flows without major price distortions.
- Bonds were presented as increasingly attractive if interest rates begin to decline.
- Long-duration bonds tend to benefit most when yields fall due to the inverse price-yield relationship.
- Lower mortgage rates were projected as a possibility, which could reignite housing demand but also drive home prices higher again.
- Markets are driven more by liquidity and money flows than by headlines or fundamentals alone.
- Investors should focus on second- and third-order effects rather than reacting to the immediate shock of war.
- Credit spreads, bond yields, and oil prices are key indicators to monitor for signs of systemic stress.
- Remain disciplined, historically grounded, and risk-aware rather than emotionally reactive.
"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.
Kirk's Online Presence:
Today's Panelists
- Kirk Chisholm | Innovative Wealth
- Douglas Heagren | Mergent College Advisors