We have also watched crypto for many years. Up until a short time ago, it wasn’t something we were able to help our clients deploy and I didn’t trust it as I didn’t understand it. Even being an aeronautical engineer and understood how the technology works—creating scarcity and traceability through a public ledger, the user interfaces were incredibly complicated.  It felt there were too many ways to check the wrong box or input the wrong character such that any investment would be at risk. Then the failure of FTX and arrest of Sam Bankman-Fried justified my distrust of intermediaries that help you buy crypto—vs just buying it yourself through a fully decentralized ‘cold storage wallet’.  IMO, this is still the best practice—owning your own password and storing your own thumb drive. However, I feel the industry has learned in a similar manner that it learned how to hold gold on behalf of investors. Crypto is one of the most risky asset classes. However, in small percentages, the potential for high returns mean a small percentage holding could have a meaningful benefit to an aggressive portfolio. After much research about the methods of storage and liquidity, we will be dipping our toes in the water within aggressive accounts. 

Back to those slides, we remain bullish on equities. The continued flow of funds into equities is likely to continue and the administration seems keen on running our economy hot. Couple that with increasing funds seeking fewer numbers of stocks, stimulus around that world and it’s likely the markets will continue to run. Are we setting up a large correction at some point? Always. But timing is a fools game, so it is far more important to make sure you’re comfortable with your risk and have time to recover from the inevitable correction. I always seem to be saying this (as I remain a child of the Global Financial Crisis): we will remain cognizant of valuations and try to avoid positions that seem to run without any regard to fundamentals. For an interesting history lesson, I’ve enjoyed this website showing changes in leadership of different metrics. https://youtu.be/mQiULAJoQzQ?si=vYVZOw1O3_4YV7i1 This one shows the change in leadership at the top of publicly traded companies by market capitalization. Note the massive change from energy to technology of the past few decades. These leadership changes don’t happen quickly and I think we continue to be in an exciting timeframe of rapid technological growth and development. To the extent we can, I want to own it. 

Geopolitics 

The 12 day war. I have no idea if this was truly the end of hostilities, but my gut tells me the story is not yet over. I have read some analysts outlining a grander bargain of peace in the Middle East—for that I’m hopeful. I know I sound like a broken record when I mention that geopolitics have an indirect bearing on markets, but I would not have expected the markets to be this subdued given the massive ramifications of this unfolding situation. I mean, we bombed a major sovereign nation and the markets just yawned! Gold, energy, defense sector initially rallied, but now everything seems to be hitting all-time highs last week while more expensive sectors drop modestly. I won’t pretend to know the outcome of this conflict, but a modest market reaction indicates that the markets don’t believe this situation will escalate. It’s also fascinating the muted response at the moment from Iranian allies. Clearly Iran has been diminished militarily, but they are undoubtedly up to something no-good. Unlikely it affects the States, but I continue my advice of following your hurricane preparedness checklist just in case something like a cyber attack on energy happens. 

Expect to see analysis from us (and many others) in the coming weeks after the passing of the OBBBA (Yep, it’s actually called the One Big Beautiful Bill Act). At first blush, most of bill is an extension of existing tax law such that a tax increase will not happen at the end of 2025. A SALT limit increase to $40k will be a positive for many along with some extended tax credits. For estate planning, the unified credit will be $15mm for each spouse next year, indexed with inflation—so the potential loss of $13.9mm did not happen. 

And yet things don’t feel entirely normal, do they? If you were just to look at charts, this would look like any other year. But that would mask the tremendous disruption geo-politically. My job is to do my best to interpret these events objectively in context of how they affect financial markets, but that doesn’t mean I don’t notice what’s happening and I think all of us care. About the people in the Middle East, in Ukraine, and of course in the US. Though we are forging our own path of history, it feels to me most similar to what we saw in the 60’s. Vietnam, civil rights protests, Cuban Missile Crisis, and the space race. I know it’s not directly related to events of last few years, but it has been almost exactly 10 years since the Mother Emanuel tragedy here in our home town followed by the act of extreme grace as some of its members forgave the shooter publicly. Back then our community displayed tremendous unity against violence resulting from that act of grace. I’m not sure what all will happen in coming days, weeks or years, but I feel we will all need to call upon that humble sentiment of forgiveness for ourselves and others even as we try to make the world better in our own ways. And I remain optimistic. Even though we have wars, unrest and tragedies… and we are in a period of strife with unknown depth and duration, there are large numbers of good people surrounding us. Technologies that could convert scarcities to abundance. The next generation who wants to forge a path and has untold talents. Citizens who render aid at every one of our tragedies (from 9/11 to hurricanes, to fires and floods—prayers for TX). Heroes that defend freedoms, heal our sick, mend our wounds. Citizens who volunteer or donate to causes of human flourishing. Teachers that instill knowledge and wisdom. They’re all around us. You know them, you probably are one of them. This is what matters and the main reason I remain proud to be an American this 4th of July!