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Article Link: Our Three-Pronged Approach

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Our three model portfolios—Conservative, Balanced, and Growth—are built to help you navigate the market with clarity and confidence. Each month, we update the holdings and numbers based on our three-pronged strategy.

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The Board is Stalled

Something about the chart above: looking back to October we are STILL in that same 500-point range from 6500-7000 on the S&P 500. Zoom in closer on February, and it’s an even tighter range from ~6750-7000. The price is consolidating for its next move, and which way does it go?

Hard to say at this point. February was slightly down for the month at -0.90%. The 20-day moving average is now pointing down (blue line) and keeps rejecting off there and moves down to the -2 standard deviation for a move back to the 20-day moving average. Holy chop! Hit the average… move down… move up to the average… move back down.

A Shock That Wasn’t

And then we started attacking Iran on March 1^st:

We opened lower on Sunday afternoon during the futures GLOBEX and moved lower throughout the night as more news came out, but ended the day on Monday pretty much where we ended trading on Friday when the markets closed for the weekend.

Did anyone have in their bingo card that the market would be utterly flat after news broke about the U.S. taking out Ayatollah Ali Khamenei? This is the biggest Middle East news headline since possibly ever? 47-years of trying to be diplomatic all turned down in a matter of hours. Oil did react as if it were the biggest news:

Oil has now moved 18% higher since Sunday and is now inversely proportional to equities, meaning as oil moves up, equities move down. Depending on how long this conflict with Iran lasts, this COULD have an impact on longer term inflation because everything hinges on energy prices. Everything is moved around the world with crude oil and its applications. How much does this spill over to the consumer and impact their bottom line?

The Energy Thesis: A Four-Move Sequence

As all of this was unfolding, I got to thinking about major things that have transpired in the past year under Trump’s Administration, and on the surface it looks erratic and out of control, but I have formed an opinion that the following four major “moves” are all tied together in this order:

Move One: Influence over the Panama Canal, February 2025, from CK Hutchinson

Move Two: Maduro’s arrest in Venezuela in January 2026

Move Three: El Mencho, the leader of Jalisco New Generation Cartel (CJNG), to a lesser degree, however still important

Move Four: Iran bombings and the subsequent killing of Ayatollah Ali Khamenei

Per usual, we are politically aware for these writings but politically agnostic. We aren’t endorsing any actions, but rather trying to give clarity to what’s going on and how it can influence markets worldwide, and whether your money needs to take any action.

The strategies we provide do not react to any events but rather can influence them if it has a material impact on the markets in the coming weeks or months. Meaning if we move into a risk-off event, it is likely the strategies will react accordingly to move into a more risk-averse position to counter those moves where the market is telling us we need to be more cautious.

With that being said, let’s move into conspiracy theory land because, as mentioned before, energy controls EVERYTHING and China/Russia/Iran have been trying to push influence throughout the world through Russia invading Ukraine, China pushing fentanyl through Mexican drug cartels into the U.S., and Iran funding terrorism throughout the Middle East through Hezbollah, Hamas, Taliban, and al-Qaeda. So, what do these past four moves in that order have anything to do with energy and shutting down these three influences?

Move One: The Canal

The Panama Canal, over the years, has been increasingly influenced by China as it has built a $1.3B port terminal on the Atlantic side of the Canal, and China is now Panama’s second largest trading partner behind the U.S. Did China ever “control” the Panama Canal? This next part is key. This is from Earl Carr writing for a Forbes article dated 18 Feb. 2025:

Trump states that “China is running the Panama Canal.” However Dr. Vasquez, CEO & Canal Administrator and Alberto Aleman former Administrator of the Panama Canal Authority (PCA), both refuted claims that the Panama Canal is controlled by China. In a Woodrow Wilson sponsored event Alberto Aleman was asked by John Feeley former US Ambassador to Panama, did the Panama Canal Authority ever consult with Chinese government officials to which he responded “no, only Chinese companies and we couldn’t because we didn’t have diplomatic relations with China.” China and Panama established diplomatic ties in 2017.

The last sentence is the kicker. CK Hutchinson is the company that controls the ports on both the Atlantic and Pacific ends of the canal, through which 40% of U.S. container traffic transits annually. Who owns CK Hutchinson? Hong Kong’s richest man, Li Ka-shring. So the PCA saying they only consult with Chinese companies and not the government is effectively the exact same thing. The companies and the Chinese government are one and the same.

Whatever the government wants, they will get through the influence of the companies they have a thumb on the back of the neck of. A short while later, the Panamanian government took control of the Canal, terminating the long-term concession of CK Hutchinson. Move 1 complete. Control the largest Western trade route.

Move Two: Venezuela

This move involves controlling the world’s largest proven oil reserves in Venezuela. The Trump Administration then moved into Venezuela and arrested Nicholas Maduro in the middle of the night in what is becoming one of the swiftest and cleanest take-downs of a world leader in history. You should read about some of the technology the U.S. military used to take out Maduro. Incredible to say the least.

Why Venezuela? We have been refining their oil for years and selling it stateside through the Citgo brand, albeit with strict sanctions against them. My guess is two reasons: 1. Chinese exports to cut them off, and 2. Influence of the world’s energy supply for the AI revolution. Look at this:

Move 2 is complete in controlling Chinese influence throughout the world, and to top it all off, the Trump Administration took out Maduro while Qiu Xiaoqi, China’s special envoy for Latin America, was meeting with Maduro just that week and was still in the country. Not only does this flex back on China in controlling their influence in the Western Hemisphere, but it also choked off Russia and China's energy imports coming out of Venezuela.

Move Three: The Cartels

This move involves stopping the push of fentanyl through Mexican drug cartels into the U.S. Not quite as big as the previous two, but it has been known for years that the Chinese government is responsible for supplying the Mexican drug cartels with endless supplies of fentanyl, which have caused tens of thousands of deaths and billions of dollars of tax payer money fighting the drug trade:

Trump, on his first day in office, designated major drug cartels as Foreign Terrorist Organizations and Specially Designated Global Terrorists for their leaders. Why? My guess is so he could take executive action to take out key leaders with military force, rather than through Congressionally appointed agencies like the ATF or DEA. It gave him more firepower to combat these organizations and their leaders and force Mexican government officials to combat the drug and human trafficking crisis at their northern border with the United States.

Again, put a halt to Chinese influence as they have taken advantage of lax immigration enforcement and border security over the past 4 years. Looking at the chart above, it wasn’t until an election year in 2024 that the Biden Administration decided the lax border policies of the prior 3 years was going to be a political liability, and his administration took action and slowed illegal immigration, which subsequently caused the flow of illicit drugs to fall, causing drug overdose in the U.S. to fall dramatically.

The Mexican Military, assisted by the U.S. Military, took out ‘El Mencho’, who was the leader of the CJNG, which had risen to be one of the most powerful and violent cartels in Mexico. Responsible for a significant portion of fentanyl flows into the United States.

Move Four: Iran

And finally, we move on to Iran. Take a look at this infographic about Iran’s Oil Exports by visualcapitalist.com:

Are you getting the picture yet? This has almost everything to do with controlling China and cutting off its influence from the rest of the world. Yeah, the mullahs in Iran are evil, and we don’t want to downplay the evilness of the Iranian regime, but to change regimes seems to be a secondary or perhaps a tertiary reason for taking out the Ayatollah.

If you can control or influence the world’s energy production and trade routes, you can control the future.

The Endgame: Artificial Intelligence

What is the future? If you ask Trump, it would be the United States. What is the United States working heavily on? Artificial Intelligence, which requires A LOT of energy.

We are in the early innings of the next industrial revolution, AI.

What does the future look like and hold? That is anyone’s guess at this juncture. As we’ve mentioned in prior editions, humans are awful at predicting the future, but make no mistake, the U.S. is fully invested in this future and believes we must be at the forefront of this revolution and be ahead of our biggest enemies, one of which is China.

If we can control the energy to fuel this revolution, we control the future and stay one step ahead. If we fail, our enemies will fill in that void due to our absence. It isn’t a matter of whether we agree with what is going on in the world and these 4 key events; it is what has happened and will progress from there. 20% of the world’s oil flows through the Strait of Hormuz off Iran’s south-central shores, with ~76-90% of that finding its way to China and the rest of Asia.

The conflict in Iran is one to watch and certainly could be a catalyst for further disruptions within the broader markets, causing a larger risk-off event if it’s a longer-than-expected ‘conflict.’

We provided data in the January issue that the average peak-to-trough in mid-term election years is -18%, and thus far, we haven’t had a catalyst for a drawdown of that magnitude.

Is this it? Possibly, especially if the market is pricing in interest rate cuts that don’t come because inflation moves up due to prolonged energy price elevation.

Markets React. We Position.

Our guess for how long this lasts? Bold prediction incoming: this is likely to have major resolution within 4 weeks and, on the long end, 3 months.

Let’s see how this plays out, but Americans have little to zero appetite for another quagmire in the Middle East that takes years to decades to resolve. Trump’s ego will get the better of him, either not wanting to lose too badly in the mid-terms, or he folds in the form of “we won and got what we wanted” and pulls military force out of the region. Anyway, looking at it from the outside, this was the conclusion we came to. Are we right? Only time will tell.

Your Money, Your Moves’ Portfolio Update

Not a major rebalance in the holdings and percentages. We added back in our equal weighted $RSP S&P 500 fund and added back in our $JNK holding while reducing our Treasuries exposure and corporate bonds, $LQD. Due to all of the disruptions or speculations in disruptions rather, our gasoline play has performed beautifully as it’s up over 35% YTD, $MPC. We continue to chug along and perform as expected. All of the news can be unsettling but the only thing we have to fear is fear itself as FDR once said.

In chess, you don’t win by reacting emotionally to every move. You win by staying disciplined, thinking several steps ahead, and positioning for what could happen next. The global board is shifting, energy is the key piece, and volatility may follow. We’ll keep watching the board — and positioning accordingly.

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Let’s make this a brief recap of the market’s first month of 2026. January delivered about a 1.5% gain for the S&P 500, with a few short bursts of volatility along the way.

The 7,000 Wall: Breakout or Fakeout?

Look at the top and bottom trendlines in the graph above, dating back to October. We’ve been consolidating inside a 400-point range between 6,600 and 7,000. That 7,000 level is now the all-time high (ATH), and as of writing, we’re sitting just 35 points below it.

Opinions are split. Some think this is a local top, while others believe we’re consolidating before another move higher. One encouraging sign: market breadth continues to expand.

Learning the Lingo:
Market Breadth
Market breadth looks at how many stocks are participating in a market move. When many stocks across different sectors and sizes are rising together, breadth is considered strong. Strong breadth often suggests a healthier, more sustainable market trend.

The Nasdaq hasn’t hit its ATH since the latter part of October, but look at the Russell 2000 and Dow Jones Industrial Average:

Rotation Isn’t Random

Russell 2k is a small-cap index, and the Dow or Dow 30 is an index comprised of very large-cap companies across different sectors from Technology to Energy. They keep pining for all-time highs. This is called “rotation,” where the market is gradually moving away from Growth to Value. Last time we saw this was 2022, which was an awful year on the broader markets with the S&P 500 down -18.11%.

Learning the Lingo:
Market Rotation
Market rotation happens when investor money moves from one part of the market to another—for example, from growth stocks to value stocks, or from large companies to smaller ones. This usually reflects changing expectations about interest rates, economic growth, or risk, rather than a full market downturn.

As January Goes…

There’s a long-standing market saying that how January performs often sets the tone for the rest of the year.

This is courtesy of Ryan Detrick at Carson Group. He puts together some great visuals and articles. We discussed this in our January 2025 edition, and it held up well last year, with the market finishing above its average historical outcome. This is showing us that we have a 92.3% probability of ending the year positive with an average rate of return (RoR) of 12% and a median of 13.6%.

February: The Buzzkill Month

Last month, we did an analysis of all the large banks' predictions of where the market would be on 12/31/2026, and it was a median return of 11% or right in line with long-term average returns for the S&P 500. But wait, there’s more:

Be aware February has been lower three of the past four years, four of the past six years, and five of the past eight years. So we’ve definitely seen some weakness in February lately, but it doesn’t end there. February is one of two months (along with September) that have had a negative average return the past 10 years, 20 years, and since 1950.

-Ryan Detrick, Chief Market Strategist, Carson Group

Silver’s Rocket Ride (and Rug Pull)

Last month, we discussed the meteoric rise in the precious metal space, and then came the volatility. Silver, look out below!:

After a massive spike on January 29th, silver futures lost nearly half their value just eight days later, down 47%. What happened?

This Is Why We Don’t Speculate

The rise was caused by speculation that there was a physical silver shortage due to increased demand in the solar industry and semiconductors, driven by advancements in AI. It was later announced that China was restricting its exports of silver due to the increase in demand and physical shortages, and the Shanghai exchange went bananas with spot silver prices pumping the price higher and higher for days on end.

This drew in a wave of speculative buyers chasing the upside. Then the rug was pulled. In a single day, silver dropped more than 35%, dragging gold, palladium, and platinum down with it.

Does it ever recover? Possibly, but it’ll take time, as that is a lot of technical damage. Are there shortages that justified the price being pumped that high? Perhaps, but when everyone on X is talking about how high silver can go, it’s prudent to get out while you can before that rug pull happens.

We exited back in August with the newsletter holdings. Perhaps too soon, but as we say over and over again, we manage risk, not speculation.

When Debt Talks, Gold Listens

Gold seems to have found its footing and still holds its long-term thesis of global Central Banks buying physical gold and offloading U.S. Treasuries from their balance sheets. When the U.S. carries nearly $40T of debt, confidence wanes in the idea that it will get repaid, and where does it stop? Our budgetary deficit is $1.7T/year. The U.S. brings in about $5.3 trillion in tax revenue but spends over $7 trillion each year. Try running a 30% budget gap in your household and see how long that lasts. Washington is full of people who ignore basic economic principles and mathematical laws.

Enough Doom—Let’s Talk Portfolio Strategy

February typically brings a larger rebalance, but this quarter required only minor structural changes.

Positioning for Rotation, Not Headlines

Within our tactical component, we offloaded our P holding, which reduced our equity exposure and protected those gains by buying QD, high-quality corporate bonds. We also trimmed our holding (which is large-cap growth with an emphasis towards tech), and moved into , which is mid-cap core.

This makes sense as the rotation we discussed earlier is underway from growth to value, and the small-cap space is being rewarded. We expect that to continue so long as the Fed continues to drop interest rates. The small-to mid-cap space is more interest rate sensitive vs. their large cap counterparts.

Bitcoin Got Hit—We Stayed Disciplined

Our holding got shellacked in January. We’re hopeful a longer-term bottom may be forming, so we dollar-cost averaged to rebalance the position relative to the rest of the holdings across the three strategies.

Learning the Lingo:
Dollar-Cost Averaging (DCA)
Dollar-cost averaging means investing a fixed amount of money at regular intervals, regardless of market price. This approach reduces the risk of investing too much at the wrong time and helps smooth out volatility over the long run.

Even with the headwinds in cryptocurrency land and precious metals, January and this year is shaping up to be another solid year for us! If you recall, we said last month that if the market is expecting a return of 11%, which is its long-term historical average, then why shouldn’t we expect our long-term average to be reached?!?

Our Performance YTD and Since Inception, read em and weep!:

We consistently outperform the broader market returns by simply getting out of the way of volatility.

We seriously need more subscribers. Please forward this to friends, family, colleagues, etc. This will seriously help people succeed long term.

No one out there is providing this data to everyday investors trying to invest for their future. There are some speculative individual stock holding newsletters, but none that can provide good actionable data when everyone is on edge. Where is the economy going? Are my investments going to be ok? We take that guesswork out of it and provide dang good data. The proof is in the pudding by the stats above, and hats off to you if you are following along with one of them.

Book Recommendation:

This past month, I read The Psychology of Money, and it was the best personal finance book I’ve ever read. It’s a must-read. If you have Spotify, you can listen to it for free.

This newsletter goes hand in hand with that book in a lot of ways, especially with the way he invests his own money. The book explains a simple and straightforward approach to investing, mostly through index funds.

Why This Book Hit Home

Here was the big takeaway and something that hit me hard. I’ve always had a complicated relationship with money in the sense that no one sat me down and taught me how to budget or sock money into a retirement plan or let alone which investment to pick. Well, sort of.

My interest in investing actually came in the 6^th grade when I lived with an aunt and uncle in Florida for a year. He’s a subscriber, so bear with me for a moment.

One day, and I don’t know what prompted my uncle to do this, but he pulled me and my cousin, his daughter, aside and said, “I want you two to pick a company to invest in,” and then explained to us what a stock was.

It fascinated me that you could take money and invest it in an existing company and hopefully make money long-term. Well, when I was a kid, I developed a love of bubblegum, so I told my uncle I wanted to invest in the Wm. Wrigley Jr. Company. I hadn’t a clue if that was even possible, but I guess I was taking Warren Buffett’s advice to invest in what you know and understand. I didn’t have a clue who Warren Buffett was, let alone that investment thesis even existed, but hey, it made sense to an 11-year-old kid who would chomp on an entire 5-piece pack of Bubblicious!

My aunt and uncle spent most of their career as professional sales reps in central/south Florida in the medical/laboratory device and equipment world. (Hopefully, I got that description correct!) Neither one of them came from any money or financial background; however, they did things the right way. They spent less than they made, they saved for a rainy day, helped family (they let me come live with them, which was very bold☺), helped their community, and church, and the list goes on and on.

They are now retired and live in Tennessee by their daughter and granddaughter. They have a lot of money saved for retirement and have done extremely well, not just financially but across all aspects of their life. They can pretty much go anywhere, do anything, and buy anything their hearts desire.

A Core Memory, Funded by Patience

My uncle is originally from Chicago, and like me, he has a love of hockey and he loves his Chicago Blackhawks as much as I love my Detroit Red Wings and he let me know back in October that the Red Wings will be playing the Blackhawks in December. This next part is not to be braggadocios, but I told him I will go to the game under one condition: I get to pay for everything. This made me feel I could repay him of sorts, for taking me into his home as a young man, albeit it would be impossible for me to ever repay them. He didn’t accept my initial offer, and countered saying he should be allowed to pay for meals over the weekend. I said deal. I fell in love with Chicago-style hotdogs that weekend.

I got the opportunity to pay for the tickets, hotel, car rental, and parking. We each took care of our own flights. We coordinated the logistics and went to the Wings vs Hawks game on December 13^th and sat 2 rows behind the Detroit penalty box. Check these seats out:

Anyway, we only get so many “core memories” in life. Perhaps a special birthday, wedding day, children’s birth, first day of school, death, heartbreak from a bad breakup, etc. Well, this trip was a core memory for me.

Not because the seats were so great or it was -2 degrees while we waited to get into the game. All of that was memorable, but it was the fact that I got to take someone I loved to do something both of us loved. NHL hockey. During that trip, I got to know him so much better. Before the game, he showed me the home he grew up in, his primary school, high school, hospital his daughter was born in, hospital his mom passed away in, the first home he bought, and reconnected with an old friend he hadn’t spoken to in a while. We even visited his parents’ gravesite. It was freezing cold, but all that fades into insignificance due to the meaningful things we were doing that day. In a way, I enjoyed the time we spent together before we watched the game more than the game itself.

What Money Is Really For

What in the world does ANY of this have to do with the book recommendation? Well, here’s the rub. The key to having a healthy relationship with money means you get to do:

1. What you want

2. When you want

3. With whomever you want

When you’re able to do those things, you have enough. And your “enough” is going to be different from other people’s enough. Some people will never have enough because they cannot come to terms with one of those three key ingredients. My experience in speaking and working with people it’s typically the first one, what you want. We tend to get this insatiable appetite for “things” that’ll never bring joy to your life, albeit, there are some things that can do this but we have to be careful in thinking that item brought the joy rather than the journey you took to acquire that thing. I’ll give an example. My uncle taught me what a mechanical watch was when I lived with him and several years later he got a Rolex along with my aunt. My 11-year old mind was fascinated and confused with the idea that a watch could operate off kinetic energy and require no battery and that the technology has existed for hundreds of years. Fast forward 30-years later I was in a financial situation that I could obtain one of these mechanical timepieces for my wife and I. I wear it daily and it brings me joy in the sense I was able to remain patient and get the big financial principals correct like saving for retirement, emergencies, cars, etc…. It isn’t the actual watch that does it for me but the 30+ year story of how I came to love watch technologies. I am excited to hand it down to one of my children so they can pass along the story.

Perhaps you feel you’re in the rat race to get ahead, have a hard time controlling spending, or like most of my clients, have a hard time spending the money you have worked so hard for. When you have that trifecta in place, you should feel confident in your long-term plans and put the worry aside. I don’t know why that hit me so hard while reading that book, and perhaps, I’m not explaining it well enough, but please take the advice, go and read The Psychology of Money. you will love it.

Markets will always be volatile, headlines will always change, and there will never be a perfect time to invest. But the real payoff comes years later—in the freedom to create moments that matter with the people you care about. That’s what long-term investing is really for, and that’s what we’re building toward together.

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Disclaimer

This newsletter is for informational and educational purposes only and does not constitute investment advice. Your Money, Your Moves is not a registered investment advisor and does not provide personalized financial recommendations. Nothing in this publication should be interpreted as a recommendation or offer to buy or sell any security or financial instrument.

All investing involves risk, including the potential loss of principal. You are responsible for your own investment decisions and should consult a licensed financial advisor or other qualified professional before acting on any information contained herein.

Opinions expressed are those of the authors alone. Your Money, Your Moves has no affiliation with, and receives no compensation from, any companies, funds, or products mentioned. Past performance is not indicative of future results.

Article Link: Our Three-Pronged Approach

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Where to begin? Right now, the hardest part of writing about the economy is deciding where to start. Every data point feels like it matters. S&P 500 YE estimations? Bond yields? Latin America? Oh yeah, welcome to the United States, Maduro! AI boom or bust? Tariffs, remember those? Energy? Started watching Landman. Complete misnomer on the naming of the show. He’s really a companyman, tool pusher and landman all rolled into one but more of a companyman. It’s great and filmed in the Permian Basin, where one of us was born and raised. US consumer? Inflation? Midterm elections? Minnesota Day Cares? See what we’re getting at here? Let’s just pick one and see where it leads us.

Wall Street’s Crystal Ball:
Grading the 2025 Forecasts

A few issues back, we mentioned how humans are awful at predictions. Every now and again, a blind squirrel will find a nut and predict with some degree of accuracy where the S&P 500 will be in 12-months. 2025 ended with the S&P at 6,845.

Each year, major Wall Street banks publish year-end targets for the S&P 500. These are educated guesses, not guarantees, but investors often treat them as roadmaps. Let’s see how the big bank experts fared at their predictions:

• Barclays: 6,600

• Goldman Sachs: 6,500

• RBC Capital Markets: 6,500

• J.P.Morgan: 6,500

• Bank of America: 5,500-6,175 (what’s going on here? Hedging their bets?)

• Citi: 6,500

• HSBC: 6,700

• Deutsche Bank: 7,000

• UBS: 6,400

• Morgan Stanley: 6,500

• Oppenheimer: 7,100

A Rare Win for the Forecasters

Looks like the answer was somewhere between HSBC & Deutsche Bank for the closest prediction for 2025. To be fair to them, even with the major swings in the market circa March-April 2025, they maintained their targets. (Queue music: Deniece Williams’ 1984 hit “Let’s Hear It For The Boy.”) Nice work!

Looking Ahead: 2026 S&P 500 Targets

• Oppenheimer 8,100

• Deutsche Bank: 8,000

• Morgan Stanley: 7,800

• Seaport Research: 7,800

• Evercore: 7,750

• RBC Capital: 7,750

• Citi: 7,700

• Fundstrat: 7,700

• Yardeni Research: 7,700

• Goldman Sachs: 7,600

• HSBC: 7,500

• Jefferies: 7,500

• J.P. Morgan Chase: 7,500

• UBS: 7,500

• Wells Fargo: 7,500

• Barclays: 7,400

• BMO Capital: 7,400

• CFRA: 7,400

• Bank of America: 7,100

What the Median Tells Us (And What It Doesn’t)

The median 2026 forecast for the S&P 500 is about 7,600, which implies an expected return of roughly 11% which is close to the average return of 11.4% of the index 2003-2025. According to data compiled by Motley Fool, midterm election years have historically been volatile, with the market experiencing an average intra-year decline of about 18% before recovering.

Today, the market is trading at roughly 22 times forward earnings, which is historically expensive. Because of that, a pullback of this size would not be uncomfortable but also not surprising, and could help reset valuations before the next leg higher.

Learning the Lingo:
Median Forecast
The middle estimate when all forecasts are lined up from lowest to highest. It helps reduce the impact of extreme predictions but is still just an estimate, not a promise.

Forward Earnings
A valuation measure based on what companies are expected to earn in the future. When markets trade at high multiples of forward earnings, investors are paying more today for tomorrow’s profits.

Our Bold Call for 2026

We don’t really focus on these estimates, but we’ll play along. If we get that median return of 11%, and since 2003, the S&P 500 return has averaged right around there at 11.4%, the Gain Train, if we are playing averages, could return ~18%. Because Gain Train is our most aggressive strategy and manages risk better than the broad market, we would expect its returns to exceed the S&P 500 over a full cycle.

That’s our bold prediction for 2026: we get an 18% rate of return on the most aggressive strategy we run. Not a guarantee, just running some basic estimates and giving our two cents.

How are we going to get these returns on the market? Artificial intelligence will continue to develop and broaden into an economic growth catalyst, according to Darrell Cronk at Wells Fargo. Analysts at other major banks agree with Cronk.

How do our portfolios get it? The same way we did last year by managing risk and taking advantage of areas of the economy that might be overlooked. We would expect the first half of the year to be fairly volatile and might continue into early Fall before the mid-term elections, so this year will likely be a bit more strained as to how we pull out positive returns within the markets. Buckle up would be our best advice.

Will we get a recession? Not likely. Here’s a look at the GDP & Unemployment Rate with Recessions:

GDP has exploded in recent years, partially due to pumping $6T into the economy during COVID, which gave rise to chronic inflation and the Fed raising rates at an unprecedented pace. This is why mortgage rates jumped from 2.75% to 7% and are remaining sticky at over 6%. Something to watch, however, is the slow creeping up of the unemployment rate which sits at 4.1% currently.

The Fed, Trump, and the Limits of Rate Control

Speaking of mortgages and the bond markets. Take a look at this chart for Federal Funds Rate & 30-Year Mortgages:

Notice anything interesting? Look at that inversion of rates. The FED dropped rates by almost 1% (100 basis points), and the 30-year mortgage went up by 20bps…so what gives? In simple terms, the Fed controls very short-term interest rates, but mortgage rates are driven by long-term bond markets which is driven largely by free market dynamics vs manipulation by a single entity. When investors are nervous about inflation, debt, or economic stability, long-term rates can stay high even when the Fed cuts.

Trump wants a Fed Chairman who is going to drop rates more aggressively than Powell has done. He has taken them from 5.25% to 3.75%. Futures markets are pricing in their first rate drop not coming until the June meeting, and by the end of the year, we get a total of 3 cuts ending 2026 at 3.25%. Trump ain’t gonna like that, but Powell’s term is coming to an end, and Trump is a real estate guy; he wants rates as close to 0% as possible.

There isn’t a real estate person on earth that wants rates where they are currently, they only want them N-1 but the Fed dropping rates isn’t necessarily going to affect the long end of the yield curve, they only manipulate the short end basically what banks lend to each other at and what they kick off in CD rates to the peasants like me and you. Meanwhile, they charge 6% for auto loans, 6% for mortgages, and 20%++ for credit cards. We love banks. What a business model!

When Markets Get Nervous, Watch Commodities

The markets are worried about the endless supply of easy money for the past 15 years, where access to cheap money was boundless, and now it’s finally catching up.

Need more convincing? Look at the commodities space in metals:

Copper is explained by the increasing demand in the EV space and other sectors, and is somewhat similar to silver, especially with China putting a halt to silver exports beginning January 2026. Gold? Several Central Banks from around the world have been buying gold as a replacement to the US 10-year Treasury market.

The market is worried, and this is a defensive position happening. At intermittent times, we have had both gold and silver in our allocation. This month, we kicked out silver and maintained our gold holding. When investors move into commodities like gold, it often signals caution rather than optimism. This kind of behavior tends to show up before periods of increased market volatility.

There is so much more to this story, but suffice it to say, we are confident market volatility is coming, and this chart screams it loudest. This explains somewhat why mortgage rates didn’t fall as the Fed Rate did. Markets are worried about longer-dated loans, bonds, and the ability to repay at current interest rate levels.

The Real Signal: The 10-Year Treasury

US 10-year Treasury Yield:

Again, yielding quite a bit more than the Federal Funds Rate. We have listened/read several analysts talk about where the 10-year is headed. There is some ambiguity, but the leanings are that it will break lower with some predicting higher from here. It’ll be interesting to see how this wedge (trend lines in pink) plays out. The line in the sand is set at a break above 4.60%; we are headed higher, and a break below 3.90%; we are headed lower. The 30-year mortgage will have a closer correlation to this vs what the Fed is going to do or the lack thereof.

You don’t need to follow the technical details here. The takeaway is that long-term interest rates matter far more for mortgages and borrowing costs than short-term Fed moves.

Our Portfolio Moves: What We Sold, What We Added

As previously mentioned, we moved $SLV out of the strategy along with lowering our bond and USD exposure in $LQD, $JNK, and $UUP. We added some stock exposure back in with $RSP, long-dated government bonds $TLT, and some Bitcoin with $IBIT. Next month will be a larger rebalance with some of our momentum holdings, but last month to end 2025 wasn’t the greatest. We gave back some performance, mainly led by our gasoline play in $MPC.

In plain terms, this meant reducing exposure to defensive assets like bonds and the U.S. dollar, and adding exposure to stocks, long-term Treasuries, and Bitcoin.

Performance With Less Risk

The performance ending 2025 for all three strategies was fantastic, especially when you consider the amount of risk we avoided:

2026 will likely be messy, volatile, and occasionally frustrating. But those are the environments where disciplined investors tend to separate themselves from the crowd. We are not chasing predictions. We are managing risk, staying flexible, and positioning for opportunity when markets overreact. Stay patient. Stay diversified. And stay ready.

Disclaimer

The information provided in this newsletter is for informational and educational purposes only. Your Money, Your Moves is not a registered investment advisor and does not provide personalized financial advice. The content presented should not be construed as investment advice, a recommendation, or an offer to buy or sell any security, product, or financial instrument. All investment strategies and investments involve risk of loss.

You are responsible for your own investment decisions, and we encourage you to consult with a licensed financial advisor or other qualified professionals before making any investment decisions. The opinions expressed in our publications are solely those of the authors and do not represent the opinions or recommendations of any regulated financial institution or investment firm.

Your Money, Your Moves does not have any affiliation with any of the investment holdings within our model portfolios, and we do not receive compensation or benefits from any companies, funds, or products that may be mentioned or featured in our content.

We disclaim any liability for any loss or damage caused by reliance on the information contained in this newsletter. Past performance is not indicative of future results.

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If markets, economics, politics, or global affairs could swing wildly this year… they did. Since this is a personal finance/economics/market newsletter, let’s see how our predictions lined up as to how 2025 would shape up. We believe in accountability, so it’s interesting to see what we thought might possibly happen.

Our 2025 Predictions: Grading Ourselves

In January, we published this:

1. Looking at several reputable market analysts, a few have predicted we are in a major topping cycle that dates to the mid-1930s, and we enter a long-term bear market for the next 9-13 years.

2. Other analysts see us having a bear market starting early 2025 and lasting into ~April 2026.

3. Others have called for more of a “rolling recession” type phenomenon wherein different sectors (technology, healthcare, consumer staples, utilities, etc) go into a recession while other sectors do not but on balance, the economy doesn’t fall prey to a downturn.

4. Lastly, there are others that have their heads in the sand and truly believe the Fed has created a “Soft Landing” where they pulled off the perfect move by raising interest rates at exactly the right time and dropping them with even better timing.

We’re DEFINITELY not in the latter analyst’s camp. The data aren’t supportive of this narrative as shown above and we can produce A LOT more charts backing up why this thesis is off base. We are not too sure about the former either with the doom and gloom ^SPX goes from 6,000 —>1,500-2,500. The answer is likely somewhere in the middle, therefore, our base case leading into 2025 will be the second scenario where 2025 will be a downturn with a bottom likely to come 12-14 months later in 2026. How big of a pullback will we get? Let’s reserve that for the next issue.

So… how would we grade that prediction?

Eh, we’ll give it an A-. We got the downturn correct; however, it definitely wasn’t a prolonged 12-14 month drawdown as we originally expected. Who would have thought it would only last two months, and that tariffs would be a catalyst driving the growth scare? We got the downturn correct, but our duration for it was off by 10-12 months☺.

A Reagan-Era Parallel? Still Plausible.

Earlier this year we also published this chart showing a possible correlation to the commencement of the Reagan Administration in 1980. So, is that parallel still alive?

The first part looks similar to the start of the Trump Administration/Economy. Moving up with some volatility, and then petering out in the second year of Reagan’s term, which remained flat as the country experienced a recession in late 1981. There are a lot of similarities to the early 1980s, such as persistent inflation, high interest rates, and a non-establishment president with transformation in mind. Remind you of anything/one???

Inflation’s Real Victims: The Middle Class

The US Consumer who makes under $100k/year, in certain demographics, continues to get whacked upside the head with persistent inflation. Inflation is no longer an abstract macroeconomic topic because it is showing up loudly in everyday spending patterns. Just look at this Chipotle Mexican Grill, Inc. YTD chart:

YTD change; -44.03%. Ouch. Why? Because the demographic that once fueled Chipotle’s growth, which is the 25 to 35 year old lower to middle income consumer, has meaningfully pulled back. From a Yahoo Finance article:

On Chipotle’s earnings call on Wednesday, CEO Scott Boatwright described a meaningful pullback among the restaurant chain’s younger and lower-income guests, sending shares down nearly 20% on Thursday.

“Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback in frequency across all income cohorts,” Boatwright said. “Since then, the gap has widened, with low- to middle-income guests further reducing frequency.” The executive said households earning under $100,000, which make up roughly 40% of Chipotle’s sales, have meaningfully cut back, especially those in the 25-to-35-year-old age group.

“We believe that this trend is not unique to Chipotle and is occurring across all restaurants, as well as many discretionary categories,” he added. “This group is facing several headwinds, including unemployment, increased student loan repayment, and slower real-wage growth.”

Wages vs. Reality

We remember when making above $75k/year was good money. Not so much anymore, as ]chronic inflation and high interest rates have shrunk people’s discretionary budget in a material manner.

Since COVID January 2020, inflation has risen a total of 25.60%. Simple math, if you used to live on $4,000/month in January 2020, it now costs you $5,024/month.

Ok, let’s be fair and look at full-time real wage improvement since then. What are the odds that someone making $75k/year had their wages increase in tandem with broader inflation measures, which would put their income at ~$94,200 today?

If you guessed people’s wages did increase, you’d be right. But if you guessed it has increased in lockstep with inflation, you are off by orders of magnitude. Look at this chart:

This is a gross oversimplification; however, it makes the point that someone making $75k just five years ago isn’t making anywhere near that $94,200 number to keep pace with inflation. Inflation is killing the middle-class consumer. Politicians and economists with bad economic policy got us into this quagmire, and now we expect them to get us out of it? Good luck.

AI and the Next Wave of Job Displacement

This is likely to be worsened with advancements in AI that will likely bring job losses to markets where businesses can replace human capital with more efficient machines that make fewer mistakes and improve profit margins.

The takeaway is that the job market is not only shifting, it is reshuffling at high speed.

Our advice: broaden your skill set to an ever-evolving job market. Make yourself marketable in any way possible, including side hustles that don’t require much of your time and energy. This newsletter is our own hedge—we’re expanding our skill set just like we recommend you do. And based on your feedback, real human insight still matters. Spread the word about us. We are worth it, in our estimation.

Portfolio Moves:
How We Navigated the Volatility

The data speaks for itself:

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November… where did the year go? It seems like eons ago that we were sitting at 4800 ^SPX, thinking all hell was going to break loose. More than it already did by the ‘Liberation Day’ announcements of a new trade war with every country and their mother. Remember this doozy we posted back in May?

Check out where we’re at now:

Trade Wars & Tariff Whiplash

Supposed trade negotiations were the catalyst for us to skyrocket off the bottom; however, tariffs on balance are higher now than they were before the entire sell-off circa March-April. Check this out from J.P. Morgan Global Economics:

The U.S. effective tariff rate is now expected to be ~20% by the end of 2025. We expect this number to be ever changing as the Trump Administration is constantly announcing new deals with trade partners.

What’s Driving the Rally?

This past weekend, a major deal was struck between China and the U.S.. So if the effective tariff rate is higher now than it was before the selloff, what gives? Why this explosive move off the bottom of the market? AI investments to be succinct.

All the major tech players have announced massive capital expenditure outlays for future.

This chart came from a fantastic article explaining the AI Boom. We highly recommend you check it out here.

The Great Debate: AI Boom…?

There is a lot of talk that we are in one of two places: AI Boom or AI Bubble. So which one is it?

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Firstly, we will take a look at this month’s holdings as we have trimmed a few positions that had a significant run up since added to the strategy:

A few items to note about our holdings changes:

• Trimmed our $SLV position significantly as its overdue for a pullback in price

• Sold small holdings in & and moved pr…

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Article Link: Our Three-Pronged Approach

Whether you’re mirroring these portfolios or using them as a benchmark, this breakdown gives you the data and rationale you need to stay in control and make smart moves.

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Will this September bring anything different? With the run-up since the April lows, and little to no pullback within the broader indices, odds are favoring that we get some sort of pullback to lower levels before we march higher into year-end.

Here is a snapshot of this month’s current holdings with performance on a YTD basis for each holding:

That is a noisy chart, but you can see only two of this month’s holdings are negative on the year, namely $TLT & $UUP, which are our long-term US Treasury and US Bullish Dollar funds, respectively. The Fed has dropped interest rates, and longer-term Treasuries, 10+ years in duration, have continued to get clobbered by rising yields. Why? More on that next week as we digest what the Fed is going to do, but suffice it to say in one word, spending.

Portfolio adjustments for September

This month’s rebalance moved $XLV out and $IJS & $IJR back into the strategy, as last month the latter two positions were moved out in anticipation of broader market volatility. We didn’t exactly get that, and we were premature in getting the positions out; however, given a day like we had on September 3rd, where the market was down by as much as -1.50% and we ended the day positive, we will take it. You are going to get some things right and some things wrong, and luckily for our strategies, these holdings only make up a small percentage.

The usual suspects were great performers in August: $SLV 9.49%, $MPC 7.62%, $RSP 2.31% and $QQQ 1.18% with others being flat to negative, $XLU being the worst of them -3.33%; however, that defensive name in the hedge component of our strategies only makes up a small allocation.

Metals

Silver. Holy smokes, it is on fire and likely to rip even higher. YTD performance is 37.95%! Spot silver as of this writing is $40.737 and closed today over $40/oz. This was a key level in order for it to move into the $50 area and eventually as high as $70-80/oz. Gold, which has been consolidating since April in a range $3300-$3500/oz, finally closed above $3500/oz at $3,536 and is likely to start making its way to $4000-4500/oz. What’s the timeframe on this? Not exactly sure, however, we wouldn’t be surprised by the end of 2026 or even sooner.

There are a lot of experts keeping a close eye on these metals, which make up/have made up sizable holdings in our strategies. We are looking for much higher prices, even with the big moves up that have already been had.

Other areas of the portfolio that have fared well this year have been our alternative play to gasoline exposure through $MPC, YTD 27.32%, which is one of the largest independent oil refiners that pays a healthy dividend.

Let’s keep rolling with phenomenal returns!

Each portfolio has been nicely optimized to take advantage of broader market moves without experiencing much of the gyrations of the stock market, like we experienced in April.

Next up, are we in a bubble? More on that in the coming days…

Article Link: Our Three-Pronged Approach

Whether you’re mirroring these portfolios or using them as a benchmark, this breakdown gives you the data and rationale you need to stay in control and make smart moves.

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