U.S. equities had a strong quarter; the S&P 500 has a 14% gain so far this year, Dow Industrials up 9.1% and Nasdaq composite up 17%. Technology led the growth with AI, semiconductors, and communication sectors powering much of the gains. Small caps and cyclical names benefited from expectations of looser regulatory policy and optimism around economic resilience.
Equity demand continues while growth held up better than many feared. Consumer spending, business investment (especially in tech infrastructure), and robust segments of the global economy provided support.
The cracks exist – with softened labor market strength (reduced hiring, slower wage growth), and inflation remaining as a central tension. Tariff uncertainty, trade disputes, and geopolitical shocks, especially around supply-side pressures add complexity to the mix.
American trade policy remains a major wild card. The Fed cut rates by 25 bps in September, but internal disagreement and uncertainty around the timing and magnitude of future cuts remain.
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In late August, we lost a precious member of the Shink family, my mother, Patricia Shink. Her eulogy is included at the very end of this commentary.
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Time Magazine published an essay by a hedge fund founder named Ray Dalio on 6-25-25:
I believe we now have to face the fact that fighting for democracy as we know it—with thoughtful disagreement and compromises governed by rule of law—is unlikely to work. People like me who had a long shot hope for the emergence of a strong middle that fights against the extremists to bring the country together and makes major reforms to improve the system must recognize that the differences are becoming too irreconcilable for this to happen.
Based on the lessons I learned from studying history about how things typically transpire under similar circumstances, I believe that what we are now seeing is the parties increasingly moving to greater extremism and a fight-to-win at all cost mode. This is threatening the rule of law as we know it and is bringing us closer to some form of civil war.
Time failed to mention or provide context that Ray Dalio has been predicting one form or another of calamity since the 1980s. On 9-26-23 he wrote “Why the world is on the Brink of Great Disorder”. Ray’s catalog of published writing is one of doom, most of which we all somehow escaped. He has developed an extremely large money management business and hedge fund complex known as Bridgewater Associates. The company succeeded largely based on Mr. Dalio’s willingness to broadcast messages of dire future scenarios that he knew how to navigate.
For perspective on Mr. Dalio, it is illuminating to read “The Fund” by Rob Copeland. “On Wall Street and in Washington a surefire way to get attention is to pull the alarm, and by 1981, Dalio saw nothing less than calamity ahead. He crisscrossed the country, stoking anxiety as he warned clients and the media about troubling headwinds facing the world economy. Markets were turbulent, gold was spiking, unemployment was on the rise, and oil prices had more than doubled in only one year. Fearful of inflation, the U.S. central bank hiked interest rates as high as 21 percent in 1981, hoping to encourage saving rather than spending. The economy ground into recession. While the Reagan administration stubbornly insisted it was on the right track, Dalio saw it differently. The United States was headed for a historic economic collapse, the worst since World War II, and Dalio said as much to anyone who would listen. “You could lose half the housing industry, Pan Am, Chrysler, maybe Ford and many other companies,” he warned in a March 1982 interview with The New York Times. “There is no hope. It is a hard reality,” he said a few months later.”
Copeland, Rob. The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend (p. 38). (Function). Kindle Edition.
The 1980s were a challenging decade for investors. Listening to alarmist rhetoric would have been a bad idea. For those with the courage to hold equities, the S&P began the decade around 114 and finished over 320 so the rewards of ignoring proclamations of disaster were substantial.
On 12-5-1996 the chairman of the Federal Reserve was Alan Greenspan. He had a speaking style that entailed lots of intellectual vigor and exotic vocabulary. He had views that were shaped by a mindset that markets would function best with light regulation. What he spoke of in December of 1996 was skepticism on the valuation of stocks and particularly the speculative technology stocks of the mid 1990s. The expression that he used was “irrational exuberance.”
This observation was not particularly insightful as the market had much further to go and it was not inevitable (although the market did go down, numerous other scenarios could have occurred) that there would be a significant decline in technology investments. There was a mania and Greenspan’s observation was insightful, yet not useful. Looking at what was said or predicted after the outcome is a trap as it ignores all the other things that may have been said.
It is important to recognize that Mr. Greenspan, nor anyone, has an accurate public prediction mechanism that can be useful. He was one of the most important commentators of the time and he said many other things that did not happen or were distinctly wrong. It can even be articulated that Alan Greenspan was one of the main regulators that created conditions for the events referred to as the “financial crisis” of 2008. He had also famously said that financial markets would “regulate themselves.”
There have been recent references to this moment in the 90s now that we are seeing a literal melt up in technology stocks and particularly with artificial intelligence related endeavors. Commentators are referencing “irrational exuberance” as some type of road sign that we can now use to navigate. This is once again commentary that has little use as no one can say where we are in the cycle.
The buying demand of 2025 can be described as a form of “stubborn optimism.” It seems that regardless of the geopolitical and economic dysfunction, investors continue to relentlessly bid up a wide spectrum of tech, and anything related to the current trending areas. The market is resilient like an abusive relationship. Erratic policy changes seem to take for granted that the US economy is extremely adaptable.
2025 market levels are being pushed by relentless buying after the April tariff freakout. Global demand for equites continues in the face of US policy that is severely anti-trade, anti-immigrant, anti-energy innovation, with a big helping of daily policy surprise.
The global money supply (currency, bank deposits, money market funds) in 2015 was estimated to be approximately $12.4T. The 2024 level is estimated at around $21T. These complex numbers can only be broadly surmised but the trend has certainly been for significant creation of currency globally. The explanation for buoyant stock markets may be as simple as a lot of cash looking to own things, particularly US equities in the tech sector.
Rising stock prices inevitably run into a problem of valuation. Asset prices are ultimately driven by the magnitude of profits that a company earns. Long term investors do not need to determine what commentaries, historical patterns, or economic predictions will turn out to be accurate. We do need to recognize that the values that we are seeing are elevated and likely to decline to more reasonable valuations. This understanding can be one of the tools that we use to persevere when the inevitable corrections arrive.
Ray Dalio has meanwhile established a very large and successful hedge fund. He has a book entitled “The Principles”and makes frequent appearances on all manner of financial media. The are few references to his posture continually catastrophizing and he is treated with great deference in general. Alan Greenspan has led a storied career and is still around at 99 years old. As a general rule, avoiding those that make broad predictions of the future and / or suggest that they have some sort of valuable recipe is probably the way to go.
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“Investment managers often face short-term incentives, such as redemption pressure following recent weak performance, that discourage them from holding positions through temporary underperformance. These constraints can lead to systematic underinvestment in firms that require longer holding periods to realize value. We examine whether these horizon-driven frictions generate predictable return patterns across firms.” Exploiting Myopia: The Returns to Long-Term Investing Jain / Jiao 9-2025
The above referenced study takes a scientific approach to what all investment portfolios attempt to do: generate the best returns over time. The concept of “friction” or dynamics that shorten the time horizon for a given strategy is a scientific way of saying it gets tough when ideas lose money.
The key investor trait once again seems to be patience and the willingness to endure periods of negative price action. The idea of doing nothing does little to inspire or help the long-term investor “take action” when things are negative. It is only later, say 5, 10 or more years before this philosophy of remaining invested begins to galvanize loyalty to the process.
The investment world has generally run counter to the idea of long-term patience as what is sold to the public are strategic and tactical ideas that can feel compelling in real time. Concepts relating to interest rates, energy prices, tax policy and beyond can attract attention and money. Exciting ideas articulated by charming and intelligent sounding people is a marketing strategy aimed at gathering money, not wisdom that can be acted upon.
This commentary has emphasized repetitively that most of what seems like market wisdom broadcast via television or internet is promotional noise. The vast majority of commentary regarding the next move of our complex economic world is rapidly forgotten. No viable money manager is showing you their cards. It is crucial to always recognize that any true edge in the investment world is being exercised quietly for maximum profit.
Financial punditry is laden with marketers promoting their brand, firm or book. A personal image that attracts attention can be one of the most valuable assets in finance. This is separate from actual skill or documented portfolio results. Creating the aura of financial edge and performance is distinct from unique talent or the ability to deliver consistent results.
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“Retiring Soon? How to Deal With Uncertainty
Practical steps and financial strategies to help you grow your confidence in retirement—no matter what the future holds”
The above is a typical financial journalist piece that is produced repeatedly across business media. One must wonder how any publication has discovered the keys to investment or retirement security and is able to deliver it to the public so efficiently. This article even offers a “Key Takeaways” sidebar for those unwilling to slog through the page and one half of pointers and insights.
Here are some hack financial media example concepts followed by realistic response:
What are the main sources of uncertainty?
- Infinite, unpredictable and perpetual
Why does a retirement spending plan matter?
- Planning is notoriously fuzzy and subject to mis-estimation
How to build a retirement cash buffer?
- Those that can afford an emergency account don’t need one and those that need one cannot afford it
What strategies work in uncertain times?
- The same strategies as all times are uncertain, none are “more” uncertain than others
Before we go further, it may be noted that the author has a journalism degree and has various work history creating financial content. The first question could be, was said author on a deadline with space to fill? These are substantive questions that have complex answers. Has this individual ever lived through these challenges?
The reality is that the questions are unanswerable. Our philosophy is that without toughness, patience and understanding that you will be constantly tested, results may suffer. It is largely provocation and fear mongering to talk about how “uncertain things are now.”
Most articles, interviews and all types of broadcasts have a shelf life that is extremely limited. As this commentary has pointed out repeatedly, real information of value is only revealed through painstaking aggregation of sources and patience or what we like to call “information fermentation”.
Information gathering must first be refined through a clear view of what can be considered quality material. Sources that require subscription and books by credible authors can then be correlated additional sources such as studies. Layering material from multiple sources while avoiding fear mongering, provocation and promotion is crucial.
The idea of fermentation is where we allow patience to buffer against excitement, novelty and impulsive decisions. It takes time to solidify our ideas with walks in nature or laughter with friends. Our thinking needs decompression and relaxation to perform at an efficient rate.
Humility is also crucial. Taleb writes in the preface of “Fooled by Randomness”: “it certainly takes bravery to remain skeptical; it takes inordinate courage to introspect, to confront oneself”. Our digital world is infused with the underlying implication that all knowledge resides in our pocket supercomputer (phone). The confidence with which casual conversation based on a social media fragment is disturbingly common.
Not long ago, gathering information was slow and labor intensive. Reading multiple news stories from the physical paper daily. Waiting for a monthly magazine subscription to arrive. Browsing the bookstore for ideas. The energy required for information gathering allowed for a glacial rate of intake relative to the current info landscape.
The real time ubiquity of digitization and low-cost access is having a profound effect on society, from crime to politics, and mental health. In a 2013 study there was indications that people can have a form of media exposure PTSD, “exposure to graphic media images may result in physical and psychological effects previously assumed to require direct trauma exposure.”
On 9-15-2025 National Geographic published, “The surprising way doomscrolling rewires your brain.” The author notes: “there’s now ample evidence showing that brutal news cycles can wreck the body’s stress response and lead to an onslaught of psychological issues in the days, weeks, months, and even years to come.”
For investors, this can impact market flows both positive and negative. The swings will be potentially more abrupt and intense. Economics are filled with competition and perpetual uncertainty. There are periods where it seems that “we invest, therefore we make money”. That is certainly the dynamic of the last 36 months and the trend since 2008. All the positive reinforcement of rising portfolio values can lead us to the wrong assumptions about how this works and how difficult investing becomes is the face of scary environments.
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The resilience of US institutions is difficult to judge in this environment of erratic and extreme policy shifts that seemingly occur daily. It seems probable that political trolling may have much less lasting impact than it may seem.
The Federal Reserve is a stark example of the plumbing of the American financial system that has been refined to be resilient in the face of political meddling. It is important to note that every presidency wants lots of economic activity. Low cost of capital via declining interest rates can be a significant catalyst for rising investment, employment and for the “average American” to feel that the party in power is effective. There is always pressure to positively impact the economy with the understanding that happy voters tend to lead to leaders being re-elected.
This desire for low interest rates has been recognized as a conflict of interest throughout American economic history. Destabilizing the monetary base for short-term political gain can lead to inflation and other nasty structural problems. Sadly, we are currently in a period of persistent ranting about lowering interest rates by the President.
The Federal Reserve is engineered to be isolated from the dynamics of election cycles. The Federal Open Market Committee (FOMC) is a 12-member group that sets monetary policy, composed of the seven Board of Governors members and five Reserve Bank presidents on a rotating basis. The purpose is to create a stable and predictable money supply while also supporting labor market stability. While there are benefits to lower interest rates, there is significant downside as easy money leads to inflation and fuels financial speculation.
The markets have speculated about immense political pressure that we are witness to. The political desire for cheap money is being broadcast on a near daily basis. The future consequences of short-term enhancements to the economy are not a consideration as the midterm election cycle is seen as a distinct arbiter on the approval of current policies.
There has been significant concern that executive branch meddling with American central bank leadership will create distrust and following credibility for American banking and markets. The reality will hopefully be mitigated by the genius of the way the Federal Reserve Board of Governors is structured with staggered terms and the difficulty of any given president to manipulate the price of money for his own purposes.
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The WSJ on 9-11-25 published an essay regarding online provocateurs building large “follower” groups with provocative positions about corrupt science and conspiratorial theories. “Dismissing difficult ideas as too wild is a core part of the appeal of conspiracy physics, allowing the audience to ignore how strange and unsettling the physical world really is. A similar kind of denial is the basis of many modern conspiracies: The moon landing was faked because humans can’t actually travel into space; 9/11 was an inside job because a plane can’t actually bring down a skyscraper. Don’t worry, these theories proclaim, crazy things aren’t possible (except for the massive cover-ups needed to conceal the truth).”
These types of media trends are driven by the profit potential of provocative material and clickbait that is affecting the investment landscape along with politics, public health, education and almost all corridors of society. If you can make money by getting attention people will attempt to construct profitable enterprise around such attention. We cannot allow our investment process to be distracted or influenced by unsubstantiated attention seeking and fear mongering.
Pessimism regarding of the direction modern media is also likely to be mistaken. Digital activity and social media attract a lot of attention but most of what matters is happening in the physical world. Reactions to what is broadcast so easily are likely to be overestimated in terms of what people are incorporating into their real-world engagement and behavior.
Words and attention seeking are being broadcast for very low or zero costs. In this case it is a near certainty that you get what you pay for. Provocation is a business model. It is not a new structure, but the nature of digital production and distribution is a refinement that is revealing distinct unintended consequences of powerful technological innovations.
How can an investor understand the potential economic dynamics of energy supply, regulation and government subsidy policies? There are numerous books, and a starting point would be Yergin’s “The Prize”. Another 20-30 hours could be devoted to Chernow’s Titan, Zuckerman’s The Frackers.
These types of material can make for better perspective for investment decision making. The complexity of how society has arrived at its current mix of energy supplies should create a distinct element of humility as the next steps forward remain unknowable.
Could the US be embracing tech innovation, ramping the grid, and diversifying the mix of inputs from natural gas to wind and solar? The economics of this type of forward thinking could be positive for job growth and opportunities of the future but unfortunately, we are witness to the idea that factory work is something that will create viable blue and gray collar opportunities in 2025 America.
When policy mistakes are happening, it is difficult to anticipate the potential consequences. The broad flow of economic assessment has been predicting significant damage from erratic federal policy. Although it seems like the market is simply shrugging and focusing on a wide array of other potentially positive factors it may simply take time for the negative impacts to occur. Successful long-term investors will of course persevere with a deep and unwavering belief that the American system will plow forward in a resilient and dynamic fashion.
Portfolio values at this time are exciting but likely elevated. We must prepare for the next scare or downswing with recognition of how far we have come. Appreciate the gains, but do not take them for granted. We can only grind forward with the simple idea that always owning quality should produce the best result over time.
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The loss of a parent is a life event that can bring such sadness. It can also remind us of the gratitude that we must recognize for being granted a path on this earth. This past August, I lost my Mom, Patricia. I was a golden ticket holder with both the parents who raised me. This is what I was able to say at Patricia’s funeral:
About 21 Years ago, I stood here and spoke about my dad. I was grasping for something to express who my father was in the midst of loss. It came to me that Papa had a quality in the way that he saw the world. I thought to myself about the cliche that some see the glass half full and some see the glass half empty. Then I realized, for the first time, a significant part was an attempt to See The Glass. To try to understand the world on its own terms. To look at truth, and facts, and knowledge as the greatest pursuit for him. I have thought about this many times over the passing decades and now I search again for a way to understand this grief, and to share the essence of Patricia.
Patricia saw the glass, and she found purpose in filling it. Evidence appears in every corner of her life – in her garden, her closet, her dancing and singing. Every art project Kevan has ever made, stored in her house and on the walls. Hearts in every corner of her home, from small glass statues and paintings on the wall, and even on her dining room table. She brought love into every room she entered and every life she touched. Of course, Filling The Glass is not only about the things we can see and touch, but in her patience, her understanding, her advice, and her love.
She filled the glass with her kindness and empathy. When she had reasons to complain, she simply did not. She chose to focus every day as a new opportunity to make something beautiful and loving. Every day was a new opportunity to Fill The Glass. She sought to make the Shink corner of the world brighter. In that, she raised the level of what is possible in those around her.
I’ve ended up spending most of my time finding the right words to help people understand the impacts of important decisions. My vocabulary and my view of the world were shaped by both the necessity of Seeing The Glass and Filling The Glass. This mindset has become a bridge that has been able to impact many people.
I cannot talk about Patricia being a hero, because I think I have a conflict of interest. But Pat did things that heroes do. Her version of a cape was a meticulously curated outfit. She had so much of what people needed in her heart, and if it wasn’t there, it was usually somewhere in her purse.
I was lucky to talk to my mother almost every single day of my life. And now that I can’t call her, all I want is to dial her number and hear her voice. This time in our healing, we are in awe of the love, support, and understanding that filled our hearts, our minds, and we will try to give a little bit of that to each other and the world.