The S&P 500 and Russell 2000 Small Cap indexes are trading near all-time highs, while the tech-heavy NASDAQ 100 has pulled back to its 50-day moving average, an important level of support. If capital continues rotating out of large-cap technology and into more interest-sensitive small caps, the traditional year-end “Santa Rally” could face headwinds.
The Federal Reserve lowered short-term interest rates by 25 basis points on Wednesday, but longer-term Treasury yields moved higher. This divergence suggests the bond market remains concerned that easier monetary policy could reignite inflation. Oil prices near $57 per barrel are translating into lower gasoline prices, which should support consumer spending. Lower rates typically benefit housing stocks, though that group remains in established downtrends for now.
Gold remains my highest-conviction trade. Continued government spending has driven debt and deficits higher, and with quantitative tightening now ended, the Fed is likely to resume balance sheet expansion. Historically, this environment has fueled inflation expectations and weakened confidence in fiat currencies. As a result, we are seeing renewed interest in gold and silver as stores of value—though notably not in Bitcoin.
Bitcoin is currently in a downtrend, down roughly 28% from its recent high. I watch but do not buy Bitcoin because I struggle to find intrinsic value. Part of Bitcoin’s weakness may be tied to the unwinding of the Japanese yen carry trade. Large hedge funds borrowed heavily in Japan at near-zero interest rates and deployed that capital into Bitcoin and AI-related technology stocks. As Japanese rates rise, forced deleveraging could accelerate, creating additional downside pressure. Bitcoin has not behaved as “digital gold,” despite that narrative.
The U.S. dollar continues to weaken, which supports American exports. Emerging-market stocks and bonds should remain meaningful allocations in our model portfolios as this trend persists.
History shows that when governments—such as ancient Rome or the British Empire—print excessive amounts of currency, the long-term value of that currency erodes. While a collapse of the U.S. dollar may still be years away, the trajectory of rising debt is concerning. The dollar remains the world’s reserve currency, enabling global trade to be conducted in dollars, but that status is not guaranteed indefinitely. Investors should consider whether their retirement portfolios are prepared for a recession or a potential currency-driven crisis.
Our client portfolios currently include the following mutual funds and ETFs: AGEYX, CBYYX, EIDOX, TEDHX, PHYS, QLEIX, WMNIX, RISN, and WWJD.
Some funds carry $5 million minimum investment requirement. Through our custodial platform at Altruist, we can access these strategies without loads, transaction fees, or minimums.
This is a significant benefit for our clients, as it provides access to elite investment managers and institutional-caliber strategies that would otherwise be unavailable to most individual investors—allowing portfolios to be built with the managers we believe are best positioned to select leading stocks and opportunities.
Finally, don’t forget to maximize your retirement contributions. For 2025, IRA contribution limits are $8,000 for those age 50 and older. SEP IRA contributions can be as high as $70,000, and individuals age 72 and older should ensure they take their required minimum distributions.
If you’re interested in joining a group of like-minded stock, fund, and ETF investors who will meet on the third Thursday of every month in Lafayette, LA, email me at Dexter@HorizonRia.com, and I’ll be happy to add you to the list.
Today in the town of David, a Savior has been born to you; he is the Messiah, the Lord. Luke 2:11