Tag Archive for: stock market

2026 Outlook: Beyond AI & Mega-Cap Tech

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“Is AI a bubble?” my uncle asked as I put my fork down mid-bite on New Year’s Eve. I’d wager that this question dominated dinner tables and family gatherings across the country this holiday season. Even my sister, whose focus lies entirely within the arts and creative pursuits, managed to put the two words “AI” and “Bubble” together.

This tells me two things: 1) Concern around AI and “bubble-ness” is virtually inescapable and 2) this question is dominating the audience’s perception of markets, perhaps even more so than the meteoric rise of silver and gold as we enter 2026.

Why Does AI Deserve So Much Attention?

In 2025, AI-related names drove ~60% of the increase in the S&P 500’s value. Furthermore, AI spending from the “Hyperscalers” (Google, Microsoft, etc.) accounted for the lion’s share of our economy’s growth. Without the spending on data center infrastructure—servers, GPUs, and the centers themselves—some estimates suggest US GDP would have grown at a measly 0.1% in the first half of 2025. It’s safe to say that AI alone kept the economy afloat for most of last year.

The robust figures above underscore why AI rightfully commands significant attention. However, fixating on the bubble label can be a trap, much like timing the market. Instead, we should look at bubble psychology and how those excesses may be extending into the AI ecosystem.

Settling the AI Bubble Talk

It’s been over 20 years since we’ve seen such a transformative, general-purpose technology with the potential to deliver productivity gains eclipsing the internet era. This fervor has already minted a class of early winners, leaving everyone else watching with a potent mix of envy and regret. It’s the classic setup for FOMO, where the “AI train” starts looking less like a sound, technological investment and more like a high-speed shortcut to a cushy nest egg.

The danger is that the faster this train moves, the easier it is to speed right past the following flags:

  • Starting Valuations: We pay prices regardless of whether reasonable returns can be generated.
  • Risk/Reward Profiles: We stop asking if we’re actually being compensated for the layers of risk we’re adding to our broader portfolio.
  • Lofty Narratives: AI’s newness unrestrains the imagination to justify price tags that reality can’t yet support.

Behind the Excitement: What’s Different This Time?

A Stronger Starting Line-Up Unlike the fragile startups of the dotcom era, today’s main AI spenders are profitable, cash-printing businesses. They are self-funding a massive AI arms race with capital expenditures set to leap by 60%, from $250bn in 2025 to over $400bn in 2026. Operating cash flows continue to outspace AI spend as a percentage of sales, allowing this historic investment to feel like a strategic augmentation of their core businesses rather than a reckless gamble.

Justified Valuations While Forward P/E ratios look expensive, today’s multiples are anchored by real-world profit. Take Nvidia: its stock price increased 14x over the last five years, but earnings grew 20x. Today’s titans aren’t as frothy as the dotcom class of 2000 because they are delivering healthy bottom-line results. However, this optimism hinges on perfection. While bulls argue we are buying “cheaper” growth today than at any point in the decade, that narrative leaves a near zero margin for error if adoption slows.

Infrastructure Demand In contrast to the fiber-optic mania of the 90s, the demand for AI build-outs can’t seem to catch a break. Data center vacancy rates are at a record low of 1.6%, and ~75% of pre-construction builds are already pre-leased. Additionally, past infrastructure bubbles saw spending peak between 2% and 5% of GDP, whereas today’s AI investment sits at roughly 1%. This suggests the build-out still has room to run.

Show Me the Money Revenues are skyrocketing. Alphabet’s Q3 2025 results proved that AI-driven features are accelerating search and ads, with generative AI product revenue surging into the triple-digit percentage range year-over-year. Beyond the titans, some industry participants have grown revenues nearly ninefold since ChatGPT launched. For now, the receipts are keeping the optimism alive.

AI Is Running Fast… But Will it Trip a Wire?

We are in a high-stakes arms race on both a micro level (hyperscalers) and a macro level (US vs. China). Businesses are pouring trillions into this effort to secure US leadership in a technology that will change the fabric of society. But in this race to the top, it’s easy to overlook the blind spots.

Revenues & Profits: Can We Reach the Promised Land? Despite the growth, there is a staggering gap between spending and earning. Analyst Azeem Azhar points out that AI companies are projected to generate $60bn in revenue against $400bn in spending for 2025. That’s a 6-7x gap—far wider than the dotcom bubble (4x) or the railroad boom (2x). Even if revenue catches up, will it translate to profit, or will we see a “race to the bottom” where large language models (LLMs) become commoditized?

Is Demand Real? Adoption is still in its awkward early stages. Only roughly 10% of firms are using AI to produce goods, though 45% pay for LLM subscriptions. According to the Stanford AI Index and McKinsey, the majority of firms are seeing only modest cost savings (≤10%) and negligible revenue gains (≤5%). Will AI adoption ever truly scale into broad, durable profit expansion?

How Long is Your (Useful) Life? Hyperscalers like Microsoft and Google have boosted profits by extending the “useful life” of their AI assets in their books. If innovation renders chips obsolete in 24 months, these companies will face massive write-downs. More importantly, they are funding this short-lived hardware with 30-year debt, leaving investors holding the bag for “obsolete” infrastructure that won’t be paid off for decades.

The AI Ouroboros There is an increasingly circular dance where Microsoft invests in OpenAI and then books cloud revenue from them. Nvidia buys stakes in the startups they sell chips to. This means a chunk of today’s “booming” revenue is an internal recycling of capital where true economic profit from external customers remains hypothetical.



Cloudy with a Chance of IOUs: While the biggest players usually use cash, we’re seeing a pivot toward the bond market. Oracle and Meta have emerged as outliers, using long-term bonds and project finance to bankroll their data centers. As free cash flow wilts under the weight of AI spend, their stock prices are feeling the gravity. Furthermore, the industry is using Special Purpose Vehicles (SPVs) to hide this leverage off-balance sheet, adding a layer of obscurity to the trillions being spent.

Conclusion: A Massive Collection of What-Ifs

Ultimately, the AI story comes down to “what-ifs.” What if AGI finally shows up and productivity explodes? Or, what if demand never materializes and the hyperscalers finally blink? With cracks showing—like OpenAI’s recent “Code Red”—it’s impossible to say if we’re headed for a minor correction or a systemic burst.

Our 2026 Recommendations:
  1. Keep a seat at the table: Exposure to market-cap weighted indices allows you to benefit if the “promised land” materializes.
  2. Diversify your sources of risk: Anchor beyond US tech. Gold, international markets, and bonds offer a necessary buffer if signs of excess turn into a choppy ride.

Rebalance systematically: Rebalancing is a controllable hedge. When sector weights become excessive, returning to target allocations helps lock in gains and reduce concentration risk.

Phillip Law, CFA

Senior Portfolio Manager, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

2026 Investment Outlook: AI, Economy, Inflation

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With 2025 in the rear view mirror, we look towards the new year. What lessons did we learn and what trends deserve attention? How do we allocate portfolios based on that knowledge? In this piece, we’d like to share three areas of focus heading into 2026:

  1. Artificial Intelligence and Bubbleness
  2. The State of the US Economy
  3. The Biggest Risks to Asset Markets (Namely Inflation)

2025 Recap: Laughing in the Face of Di-worsification:

After years of US led-dominance, we saw narratives across asset classes flip on their heads. For the first time in years:

  • US Stocks underperformed developed international and emerging market geographies.
  • Gold, held for its diversification benefits, shined more brightly than most major asset categories. 

Source: YCharts

The year reminded us that “di-worsification” – a term long used to parody the idea that diversifying into less correlated, non-US assets only made portfolios worse – isn’t a universal truth. In 2025, holding different asset segments helped weather volatile trade policy, weakening dollar, and US deficit concerns.

Ultimately, we left 2025 with a more fragmented globe where nations now emphasize national security and independence over globalized efficiencies. In this new regime where the global economy is de-synchronized, we believe diversification is more essential than ever.

Looking to 2026: What of AI and Its Bubbleness?

The topic of artificial intelligence being a bubble is almost inescapable. AI Hyperscalers, bolstered by massive spending commitments on AI investments,  drove over 60% of the S&P 500’s growth and was a key lifeline for the economy in 2025. With AI hyperscalers and key players constituting a significant portion of the S&P 500, the ecosystem will likely continue to define US markets in 2026. So is it a bubble?

We have a separate piece that deep dives into the AI Bubble question which I’ve summarized below:

The Bull Case:

Proponents argue that this time is different compared to other speculative manias. The players here are profitable, cash-printing businesses whose valuations are not only reasonable, but also are pricing in achievable growth. Furthermore, there is ample demand for infrastructure, particularly data centers, unlike the railroad and dotcom bubbles. This all will enable revenue to follow, which has already exhibited enormous growth rates.

The Bear Case:

Despite tremendous growth, AI companies are spending way more than they’re making, (higher than past bubbles). Demand from businesses remains uncertain, with early studies showing only modest cost savings/revenue gains. Also, most revenue booked today is a result of circular investing amongst AI players. Meanwhile, AI companies are using aggressive accounting methods for their chips, which puts future earnings estimates at risk. Lastly, debt is now being used to finance spending, officially adding a shot clock for return on investment to materialize.

What to Do?

Within the deep-dive, we reach two conclusions: 

1. Focusing on the “bubble” label is often unproductive. Even if excesses exist, timing the eventual “burst” is a fool’s errand—will it be in one year or five? Selling too early means potentially missing out on healthy gains.

As Peter Lynch noted, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

2. The AI dilemma is ultimately a huge collection of what-ifs, but we believe keeping a seat at the table while diversifying sources of risk and return in other parts of the portfolio such as international stocks, bonds, or gold is prudent.

How’s the US Economy?

Objectively speaking, the economy is in a healthy state heading into 2026. Let’s look at a few primary indicators:

  • A Productive Economy – GDP grew at an astonishing annualized rate of 4.3% in Q3 2025 and is projected to grow ~2% (long-term average) in 2026. We expect AI spending to continue as hyperscalers add to productivity and other businesses increase adoption.
  • The Spending Surprise – Despite rising concerns around job security and waning sentiment, Americans are still spending. In late 2025, retail sales surged 3.5% year-over-year and we observed a healthy uptick in credit card balances.
  • Fiscal & Monetary Stimulus: 
    •  Heading into 2026, we’ve unlocked tax credits from the One Big Beautiful Bill (OBBB). We take estimates with a grain of salt, but if $100bn in total tax refunds and a $3,750 average tax cut per filer could further stimulate consumer spending.
    • The market currently anticipates two rate cuts, which will lower the cost of borrowing for both businesses and consumers (maybe more, pending Federal Reserve politics).

With a solid launching pad to start the year followed by additional liquidity in consumers pockets, we believe the US economy is well-equipped heading into 2026.

What About the Risks?

We believe the primary, non-wildcard risk to asset markets is inflation. Although inflation has stabilized from recent years, it remains sticky compared to pre-pandemic levels (around 2%), with the Fed’s preferred measure recently estimated at 2.8%.

The current economic backdrop does allow more sensitivities to a spike in inflation.

  1. Trade fragmentation and tariffs – while most businesses seemingly absorbed the price increases of tariffs in 2025, we’ve begun to see some price hikes passed to consumers in recent inflation prints. 
  2. Is Stimulus a Double-Edged Sword? – While increased liquidity for consumers can be helpful, it may also fuel inflation. The prior stimulus checks led to double-digit drops in equities and bonds (2022) as we raised rates to fight policy-driven inflation.
  3. Financial Repression – With US Debt-to-GDP approaching 120%, there is a risk that policymakers resort to “financial repression” – intentionally allowing higher inflation to “inflate away” the real value of government debt.

With US equities trading expensively and bonds vulnerable to inflation, I’d park this risk in the low probability, but high impact camp. To mitigate this risk, owning a portion of your portfolio to hedges (gold, commodities, natural resources) can cushion against a potential 2022 repeat.

Conclusion:

Ultimately, the backdrop seems favorable for US equity markets heading into 2026. Even if markets are frothy, the solution to managing potential excesses and drawdowns is not in timing them, but instead: a) building adequately diversified portfolios b) aligning allocations with your risk tolerance and financial objective and c) rebalancing into weakness to harness the long-term growth of capital markets at more advantageous price levels.

That’s our 2026 outlook. Our advice remains: use these investing principles as your foundation. This will allow 2026 to be less about watching tickers and more about the life you’re building. Hit that PR, read those books, or learn to cook—aim to achieve your best self. While we can recommend investments and share outlooks, there’s no substitute for investing in your own growth and happiness.

Phillip Law, CFA

Senior Portfolio Manager, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Key Financial Insights from 2024 and Looking Ahead to 2025

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As we approach the end of 2024, it’s an opportune time to reflect on the year’s financial developments and consider what 2025 may bring. We believe in understanding both the past and potential future of our economic landscape, which may help inform financial decisions.

This year has brought its share of financial developments, from market fluctuations to policy changes that have shaped the economic environment. Shifts in various sectors, interest rate movements, and global events have influenced financial strategies across the board.

Looking ahead to 2025, we anticipate new opportunities and challenges in the financial world. Our team watches current trends and indicators to provide some insights for the coming year.

In this review, we’ll examine the key financial events of 2024 and their impact and potential implications. We’ll then turn our attention to 2025, offering our perspective on trends that may emerge in the coming months.

Whether you’re a long-standing client or simply interested in staying informed, we believe this overview may provide some insights for your financial strategies as we move into the new year.

Key Economic Factors in 2024

  • Interest Rates

During the September meeting, the Federal Reserve voted to lower interest rates by 0.5 percent, the first reduction in rates since 2020. While the pivot was long-anticipated, the size of the cut surprised many pundits following the Fed’s all-out fight against inflation launched two years ago. The move, unusual in an election year, brought the benchmark federal funds rate to a range between 4.75% and 5%. Some anticipate the Fed may adjust interest rates again in 2024.1

  • Inflation

The decision to trim interest rates moved the central bank into a new phase, and preventing further weakening of the U.S. labor market is now an important priority. For most of the past 2½ years, the Fed focused on fighting inflation. With the Consumer Price Index receding from 6.4% in January 2023 to 2.9% this July, the Fed pivoted attention to the softening job market. By comparison, the seasonally-adjusted unemployment rate rose to 4.2% in August, up from 3.7% in January.1

  • GDP Growth

Real GDP growth rose by 3.0% quarterly annualized in Q2 2024, up from 1.6% in Q1 2024. This increase was led by stronger domestic demand and a surge in inventories. The Conference Board Economic Forecast estimates a 0.8% annualized GDP growth for Q3 and 1% annualized for Q4. With the third and final Q3 GDP estimate due to be released on December 19, attention will shift to Q4 and 2025. Looking into 2025, some economists watch the Atlanta Fed’s GDPNow tool, which gives a running estimate of real GDP growth based on available economic data for the current measured quarter.2

  • Market Performance

Equity markets have seen strong, if uneven, performance in 2024. As of the end of October, the S&P 500 index was up 19.62% while the Dow Jones Industrial Average rose 10.81%. The tech-heavy NASDAQ increased 20.54%.3 

Bonds have also shown volatility in 2024. As of October 31, the total return of the 10-Year Treasury Note was 4.28%.4

Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of financial markets will fluctuate as conditions change.

Key Takeaways

  • Up Markets Can Still Experience Volatility

While equity markets had strong overall performance in 2024, stocks did not go up in a straight line. There were some scary moments for investors, like April 12, when inflation and geopolitical worries saw the Dow Jones Industrial Average slide by 1.24%, the S&P 500 tumble by 1.46%, and the Nasdaq pull back by 1.62%. That bad day for the markets was dwarfed by August 5, when worries about slowing U.S. economic growth caused the Dow to fall more than 1,000 points, or 2.6%, while the broader S&P 500 lost 3% and the Nasdaq fell 3.4%.5,6

As disconcerting as these pullbacks felt at the time, stocks returned to record highs by September. An important lesson from this year is that stocks can, and often do, go down. It’s also critical to know that, on average, stocks have corrected approximately every two years, and that correction typically lasts a few months. Corrections, which are declines of between 10% and 20% from a recent high, can occur for a variety of reasons, including when unexpected news shakes investors’ confidence. Selling investments during a downturn may lock in your losses and lower your potential long-term returns.7

  • Don’t Fight the Fed

The past year has reinforced the influence the Federal Reserve has over the markets and investor psychology. The Fed held rates steady for much of 2024. It wasn’t until the September meeting that they made an adjustment. Markets reacted to every Fed meeting and Chairman Jerome Powell press conference. With inflation down from its highs (but not yet at the Fed’s 2% target) and employment softening, but not cratering, the Fed may have orchestrated the oft-talked-about “soft landing” for the economy. The lesson learned for next year is to pay attention to what the Fed is doing and remember the old Wall Street saying, “Don’t fight the Fed.”

  • Markets Shift Focus in an Instant

We all know that stocks can be volatile, but we only seem to care when they are volatile on the downside. Those 24 hours of angst between August 5 and 6, when the Dow dropped more than 1,000 points due in part to angst over the Bank of Japan boosting interest rates at a time when investors were borrowing the yen on the cheap to buy higher-risk stocks and derivatives. I doubt many of us had “Bank of Japan” on our radar, but market psychology can shift abruptly from “it’s all good” to “the sky is falling” without much justification. Focus can flip from concerns over an overheating economy to fears of a job-crushing recession on a dime. One lesson we hope you take away from 2024 is not to let emotions control your investment decisions. A solid financial strategy should be designed to withstand short-term market moves and keep you on track toward your long-term financial goals.9

  • Artificial Intelligence (AI) is Here to Stay

AI has been a major market story in 2023 and 2024 and shows no signs of slowing. While AI has been advancing for decades, innovations in machine learning have found exciting and extraordinary new use cases in areas from healthcare to manufacturing. One popular chatbot jump-started the current AI interest, reaching 100 million monthly active users just two months after its launch, making it the fastest-growing consumer application in history.8 

AI is being seen as the most innovative technology of the 21st century and has the potential to both enhance and disrupt major industries. Innovations in electricity and personal computers unleashed investment booms of as much as 2% of U.S. GDP as the technologies were adopted into the broader economy. Now, investment in artificial intelligence is ramping up quickly and could eventually have an even bigger impact on GDP, according to Goldman Sachs Economics Research.10

The AI lesson to take away from 2024 is that AI is not just focused on a handful of companies. Company interest in AI has already increased rapidly, with more than 16% of enterprises in the Russell 3000 mentioning the technology on earnings calls, up from less than 1% in 2016.10 

  • Asset Allocation is Essential

Asset allocation is an approach to help manage, but not eliminate, investment risk in the event that security prices decline. The strategy involves spreading your investments across a wide range of assets to spread the risk associated with concentrating too heavily on any single investment. Simply put, diversification is the “don’t keep all your eggs in one basket” approach to portfolio construction.

Asset allocation is more than choosing a single investment, like one that is based on the S&P 500 stock index. One of the more significant and concerning trends in recent years has been the rise of market-cap-weighted indexes, which has led to increased concentration in just a few dominant stocks, mostly in the technology sector. Due to their outsized market capitalizations, these stocks, dubbed “The Magnificent 7,” may make up a disproportionate part of some investor portfolios. Another lesson from 2024 is that the downside can be significant when heavily concentrated stocks pull back simultaneously.11

  • Emergency Preparedness is Always Critical

The year 2024 has shown us that unexpected economic downturns or crises can impact investors without warning. You should consider having an emergency fund to cover living expenses so you aren’t forced to make short-term decisions that could impact your long-term goals. You should also work with a financial professional to discuss risk management strategies that can keep you moving toward your goals.

  • Prepare for What You Can, Don’t Overreact to What You Can’t

With the presidential election now behind us, potential tax and regulation policy transitions remain. Politically speaking, implementing policy goals and regulations is more challenging than making pledges. Be ready to shift strategies for you, your loved ones, and your heirs if necessary. In other areas, there may be little you can do other than to try not to overreact to what comes down from Washington. Working with financial, tax, and estate professionals can help you navigate what may happen in 2025 and beyond.

  • Applying Lessons and Looking Forward to 2025

As we reflect on the financial landscape of 2024, it’s clear that the market continues to evolve in response to global events, technological advancements, and economic policies. The lessons from this past year underscore the importance of maintaining a balanced, long-term perspective with your personal finances.

To summarize the key takeaways from 2024:

  1. Market volatility remains a constant, emphasizing the need for diversified portfolios.
  2. The Federal Reserve’s decisions continue to impact market dynamics.
  3. Emerging technologies, particularly AI, are reshaping industries and potentially creating new investment opportunities.
  4. Global events can rapidly shift market focus, reinforcing the value of a well-structured financial strategy.

Looking ahead to 2025, we anticipate continued evolution in the financial sector and are committed to staying on top of these changes and providing you with timely insights and guidance. Our team is dedicated to helping you navigate the complexities of the financial world and working towards your long-term goals.

We will continue to monitor key economic indicators, policy changes, and market trends, sharing our analysis through our regular blog posts and communications. Our aim is to provide you with the information and support you need to make informed financial decisions in the coming year and beyond.

Remember, personal finance is a collaborative effort. While we provide the insights, your personal goals and circumstances are at the heart of every strategy we develop. We encourage you to reach out to us with any questions or concerns as we move into 2025.

Thank you for your continued trust in our team. We look forward to guiding you through another year of financial opportunities and challenges.

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Sources:

1. The Wall Street Journal, September 18, 2024

https://www.wsj.com/economy/central-banking/fed-cuts-rates-by-half-percentage-point-03566d82

2. The Conference Board, September 17, 2024

https://www.conference-board.org/publications/pdf/index.cfm?brandingURL=us-forecast

3. Yahoo.com, October 31, 2024. The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general.  Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

https://finance.yahoo.com/

4. Yahoo.com, October 31, 2024. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid.

https://finance.yahoo.com/

5. NBCNews.com, April 12, 2024

https://www.nbcnews.com/business/markets/dow-tumbles-475-points-sp-500-suffers-worst-day-january-inflation-woes-rcna147647

6. NBCNews.com, August 5, 2024

https://www.nbcnews.com/business/markets/live-blog/us-stocks-lower-asia-europe-decline-impact-rcna165129

7. American Century Investments, March 26, 2024

https://www.americancentury.com/insights/rebounding-from-market-corrections-and-bear-markets/

8. Reuters, February 2, 2023

https://www.reuters.com/technology/chatgpt-sets-record-fastest-growing-user-base-analyst-note-2023-02-01/#:~:text=ChatGPT%2C%20the%20popular%20chatbot%20from%20OpenAI%2C%20is%20estimated,history%2C%20according%20to%20a%20UBS%20study%20on%20Wednesday.

9. U.S. News & World Report, August 8, 2024

https://money.usnews.com/investing/articles/will-the-stock-market-crash-risk-factors#job-market

10. Goldman Sachs, August 1, 2023

https://www.goldmansachs.com/insights/articles/ai-investment-forecast-to-approach-200-billion-globally-by-2025

11. Institutional Investor, August 6, 2024

https://www.institutionalinvestor.com/article/2djf78zma3erdsxw8k8hs/innovation/as-mag-7-concentration-intensifies-so-too-does-the-race-to-find-diversifiers

How Will the Election Results Impact Your Financial Future?

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With election day over, many are reflecting on what this new leadership might mean for their financial future and the country. While elections can stir strong emotions, it’s important to remember that, historically, markets have been influenced more by economic fundamentals than by which party is in power.

As this chart shows, while the stock market has fluctuated under presidents of both parties, the S&P 500 has trended higher over the long term, no matter who’s sitting in the Oval Office.1

  • Long-Term Trends: The stock market, as represented by the S&P 500, has generally trended higher over the long term, regardless of which party holds the presidency.
  • Company Growth: The dynamic U.S. economy has consistently produced successful companies, contributing to economic strength under various administrations.
  • Market Priorities: Factors like earnings growth, economic conditions, and technological advancements can have more influence on market performance than political changes.
  • Investor Focus: Your investment strategy should align with your goals, time horizon, and risk tolerance—not the outcome of a single election.

While elections do have consequences, it’s important to keep perspective. In the meantime, we’ll be closely monitoring how the new administration’s agenda might impact areas like tax policy, regulations, and corporate competitiveness. Market reactions to political shifts can create short-term volatility, but these fluctuations can be temporary.

As always, the key is to stay focused on your financial goals. Sudden moves in response to short-term events might be more detrimental than beneficial. We’re here to help you navigate any uncertainty while pursuing your overall financial strategy.

If you have questions about how current events could impact your investments or want to discuss your financial strategy, feel free to reach out.

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Stocks are measured by the Standard & Poor’s 500 Composite Index, an unmanaged index considered representative of the overall U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. Stock price returns and principal values will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.

1. Chart https://go.ycharts.com/hubfs/How_Do_Presidential_Elections_Impact_the_Market/Election_Guide.pdf

4 Tips for Navigating the Markets During Election Season

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We’re heading toward another contentious presidential election in the United States. If you’re on edge in this political climate, you’re not alone.

We don’t want your valid political qualms to lead you to make financial missteps. That’s why we’ve compiled four essential tips to help you maintain a level head and effectively manage your financial future in the face of political uncertainty.

1. Look at the History

Despite the month-long parade of anxiety-inducing headlines that typically precede a national election, recent history shows that elections rarely cause significant upset to financial markets.

In evaluating data from the past five presidential elections, short-term volatility does occur in the days and weeks immediately before and after the election. But those fluctuations fade quickly, and the market reverts to whatever trajectory it was already on.*

2. Enhance Your Media Literacy

In the coming months, headlines will likely try to tie every newsworthy event — big and small — into the 2024 election. While that will include financial news, it’s important to remember that small events typically don’t drive markets.

Instead, macro events move the needle. The subprime mortgage crisis sparked the Great Recession. A once-in-a-century pandemic set off economic upheaval in 2020. Be wary of headlines that try to convince you the economic world is falling off its axis because of an event that is ultimately micro in scale.

To navigate stories around the upcoming election it helps to increase your media literacy. Some sources cultivate panic or anger to drive more views, clicks, and revenue.

Use these tactics to evaluate the trustworthiness of a story:

  • Scrutinize the source. Does the individual or organization have the credentials to speak on the topic?
  • Question the melodrama. Is any emotion in the piece necessary, or is it a tactic to elicit a specific response or manipulate the reader?
  • Examine the tone. Look for words that are designed to provoke emotional reactions.
  • Consider the motive. Is the information neutral and purely informative, or is there a self-serving angle to the piece?
  • Check the facts. Is the piece based on facts or opinions? If information is being presented as factual, can you independently verify it with a reputable third party?

3. Keep Calm and Invest On

Advisors preach this all the time, but it bears repeating during a stressful news cycle: Staying invested is one of the most beneficial things you can do for your financial future.

The stock market has averaged a 10% rate of return over the past 50 years — a period that includes stagflation, the ’79 energy crisis, the dot-com bubble, the Great Recession, and Covid-19.** Those who have remained invested regardless of the economic ups and downs have seen their money grow thanks to compounding.

Instead of letting external economic forces influence your decision, look inward. Remaining focused on your personal long-term financial goals can help you stick to the plan you and your advisor have created.

4. Turn To Your Advisor for Support

If you’re struggling to maintain your serenity, reach out to your advisor. The economic chatter can be stressful and advisors are committed to helping you tune out the noise and remain focused.

Advisors can help you by:

  • Contextualizing economic headlines. Advisors spend a lot of time tracking trends and watching markets. They can fill in critical blanks when you encounter a news story that sounds scary.
  • Running stress tests. Advisors use technology to help us create hypothetical projections so they can better understand potential upside and downside risk in various macroeconomic scenarios. If you have a particular concern about a macro force, they can run that stress test on your portfolio and walk you through the results.
  • Revisiting your financial plan. Advisors are here to help you keep a level head and stay focused on what matters. They can walk through your plan together and review projections to inspire you to stay the course.

Feel free to download this guide and share it with your friends, so they too can benefit from these strategies for navigating market uncertainty during election season.

If you’re feeling uncertain or have questions about how the current events may impact your investments, don’t hesitate to reach out. We’re here to provide guidance, offer perspective, and help you stay focused on your long-term financial goals. 

WSWA

Warren Street Wealth Advisors

Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

* Source: Bratanova-Cvetanova, K. (2024, January 24). Do stock and bond markets become more volatile around US presidential elections? FactSet Insight. https://insight.factset.com/do-stock-and-bond-markets-become-more-volatile-around-us-presidential-elections 

** Source: Price, M. (2023, November 23). Average Stock Market Return. The Motley Fool. https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/ 

Tax-Loss Harvesting: Opportunities and Obstacles

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So much of investing is beyond our control (picking stock prices, timing market movements, and so on) that it’s nice to know there are several “power tools” that can potentially enhance overall returns. Tax-loss harvesting is one such instrument, but — like many tools — it’s best used skillfully, and only when it is the right tool for the task. 

The (Ideal) Logistics 

When properly applied, tax-loss harvesting is the equivalent of turning your financial lemons into lemonade by converting market downturns into tangible tax savings. A successful tax-loss harvest lowers your tax bill, without substantially altering or impacting your long-term investment outcomes. 

Tax Savings

If you sell all or part of a position in your taxable account when it is worth less than you paid for it, this generates a realized capital loss. You can use that loss to offset capital gains and other income in the year you realize it, or you can carry it forward into future years. We can realize losses on a holding’s original shares, its reinvested dividends, or both. (There are quite a few more caveats on how to report losses, gains, and other income. A tax professional should be consulted, but that’s the general premise.)

Your Greater Goals 

When harvesting a loss, it’s imperative that we remain true to your existing investment plan. To prevent a tax-loss harvest from knocking your carefully structured portfolio out of balance, we reinvest the proceeds of any tax-loss harvest sale into a similar position (but not one that is “substantially identical,” as defined by the IRS). Typically, we then return the proceeds to your original position no sooner than 31 days later (after the IRS’s “wash sale rule” period has passed). 

The Tax-Loss Harvest Round Trip

In short, once the dust has settled, our goal is to have generated a substantive capital loss to report on your tax returns, without dramatically altering your market positions during or after the event. Here’s a three-step summary of the round trip typically involved: 

  1. Sell all or part of a position in your portfolio when it is worth less than you paid for it. 
  2. Reinvest the proceeds in a similar (not “substantially identical”) position. 
  3. Return the proceeds to the original position no sooner than 31 days later. 

Practical Caveats

An effective tax-loss harvest can contribute to your net worth by lowering your tax bills. That’s why we keep a year-round eye on potential harvesting opportunities, so we are ready to spring into action whenever market conditions and your best interests warrant it. 

That said, there are several reasons that not every loss can or should be harvested. Here are a few of the most common caveats to bear in mind. 

  • Trading costs – You shouldn’t execute a tax-loss harvest unless it is expected to generate more than enough tax savings to offset the trading costs involved. As described above, a typical tax-loss harvest calls for four trades: There’s one trade to sell the original holding and another to stay invested in the market during the waiting period dictated by the IRS’s wash sale rule. After that, there are two more trades to sell the interim holding and buy back the original position. 
  • Market volatility – When the time comes to sell the interim holding and repurchase your original position, you ideally want to sell it for no more than it cost, lest it generate a short-term taxable gain that can negate the benefits of the harvest. We may avoid initiating a tax-loss harvest in highly volatile markets, especially if your overall investment plans might be harmed if we are unable to cost-effectively repurchase your original position when advisable. 
  • Tax planning – While a successful tax-loss harvest shouldn’t have any impact on your long-term investment strategy, it can lower the basis of your holdings once it’s completed, which can generate higher capital gains taxes for you later on. As such, we want to carefully manage any tax-loss harvesting opportunities in concert with your larger tax-planning needs. 
  • Asset location – Holdings in your tax-sheltered accounts (such as your IRA) don’t generate taxable gains or realized losses when sold, so we can only harvest losses from assets held in your taxable accounts. 

Adding Value with Tax-Loss Harvesting

It’s never fun to endure market downturns, but they are an inherent part of nearly every investor’s journey toward accumulating new wealth. When they occur, we can sometimes soften the sting by leveraging losses to your advantage. Determining when and how to seize a tax-loss harvesting opportunity, while avoiding the obstacles involved, is one more way we seek to add value to your end returns and to your advisory relationship with us. Let us know if we can ever answer any questions about this or other tax-planning strategies you may have in mind. 

Bryan Cassick, MBA, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Beyond the Market: Understanding Your Investment Performance

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Sometimes, it pays to strive for greener grass. But as an investor, second-guessing a stable strategy can leave you in the weeds. Trading in reaction to excitement or fear tricks you into buying high (chasing popular trends) and selling low (fleeing misfortunes), while potentially incurring unnecessary taxes and transaction costs along the way. 

Still, what do you do if you’re unsure about how your investments stack up?

Compared to the Stocks du Jour?

It’s easy to be dazzled by popular individual stocks or sectors that have been earning more than you have and wonder whether you should get in on the action. 

You might get lucky and buy in ahead of the peaks, ride the surges while they last, and manage to jump out before the fads fade. Unfortunately, even experts cannot foresee the countless coincidences that can squash a high-flying holding or send a different one soaring. To succeed at this gambit, you must correctly—and repeatedly—decide when to get in, and when to get out … in markets where unpredictable hot hands can run anywhere from days to years. 

Remember, too, just by investing your money in the global stock market overall and sitting tight, you’ll probably already own some of today’s hot holdings. You’ll also automatically hold some of the next big winners, before they surge (effectively buying low).  

Rather than comparing your investments to the latest sprinters, be the tortoise, not the hare. Get in, stay in, and focus on your own finish line. It’s the only one that matters.

Compared to “The Market”?

What if your investments seem to be performing differently not just from the high-flyers, but from the entire market? Maybe you’re seeing reports of “the market” returning a different amount than what you are experiencing. 

Remember, when a reporter, analyst, or other experts discusses market performance, they’re usually citing returns from the S&P 500 Index, the DJIA, or a similar proxy. These popular benchmarks often represent one asset class: U.S. large-cap stocks. As such, it’s highly unlikely your own portfolio will always be performing anything like this single source of expected returns. 

Most investors instead prefer to balance their potential risks and rewards. For example, if your portfolio is a 50/50 mix of stocks and bonds, you should expect it to underperform an all-stock portfolio over time. But it also should deliver more dependable (if still not guaranteed) returns in the end, along with a relatively smoother ride along the way. 

Even if you’re more heavily invested in stocks than bonds, a well-diversified stock portfolio will typically include multiple sources of risks and returns, such as U.S., international, and emerging market stocks; small- and large-cap stocks; value and growth stocks; and other underrepresented sources of expected return. 

Thus, we advise against comparing your portfolio’s performance to “the market.” Usually, any variance simply means your well-structured, globally diversified portfolio is working as planned. 

In Summary

Admittedly, it can be easier said than done to avoid inappropriate performance comparisons across shifting times and unfolding events. But your portfolio should be structured to reflect your financial goals and your ability to tolerate the risks involved in pursuing your desired level of long-term growth. 

In roaring bull and scary bear markets alike, we team up with you to address these critical questions about your investments. That way, you can accurately assess where you stand and where you’d like to go from here. 

Please reach out to your advisor if you’d like to discuss further. We are always here for you!

WSWA

Warren Street Wealth Advisors

Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

2023 Investment Update

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Every January, it’s typical to reflect on market data from the year past. You’ll see the results in your own quarterly reports, as well as across the usual flurry of broad market analyses. 

Even when the numbers aren’t what we’d prefer—which has certainly been the case for 2022—we look at them anyway. It’s good to keep an eye on your annual investment returns, as they are one consideration among many that guide your financial plans. 

However, whether the numbers are up or down in any given year, we caution against letting them alter your mood, or as importantly, your portfolio mix. When it comes to future expected returns, a year’s performance is among the least significant determinants available.

To illustrate, consider what happened in 2022, and how global markets reacted. 

In the thumbs-down category, U.S. stock market indexes turned in annual lows not seen since 2008, with most of the heaviest big tech stocks taking a bath. Bonds fared no better, as the U.S. Federal Reserve raised rates to tamp down inflation. The U.K.’s economic policies resulted in Liz Truss becoming its shortest-tenured prime minister ever, while Russia’s invasion of Ukraine and China’s continued COVID woes kept the global economy in a tailspin. 

On the plus side, inflation has appeared to be easing slightly, and so far, a recession has yet to materialize. A globally diversified, value-tilted strategy has helped protect against some (certainly not all) of the worst returns. An 8.7% Cost-of-Living Adjustment (COLA) for Social Security recipients has helped ease some of the spending sting, as should some of the provisions within the newly enacted SECURE 2.0 Act of 2022 here. 

Now, how much of this did you see coming last January? Given the unique blend of social, political, and economic news that defined the year, it’s unlikely anything but blind luck could have led to accurate expectations at the outset. 

In fact, even if you believe you knew we were in for trouble back then, it’s entirely possible you are altering reality, thanks to recency and hindsight bias. The Wall Street Journal’s Jason Zweig ran an experiment to demonstrate how our memories can deceive us like that. Last January, he asked readers to send in their market predictions for 2022. Then, toward year-end, he asked them to recall their predictions (without peeking). The conclusion: “[Respondents] remembered being much less bullish than they had been in real time.” 

In other words, just after most markets had experienced a banner year of high returns in 2021, many people were predicting more of the same. Then, the reality of a demoralizing year rewrote their memories; they subconsciously overlaid their original optimism with today’s pessimism. 

Where does this leave us? Clearly, there are better ways to prepare for the future than being influenced by current market conditions, and how we’re feeling about them today. Instead, everything we cannot yet know will shape near-term market returns, while everything we’ve learned from decades of disciplined investing should shape our long-range investment plans. 

We wish you and yours a happy and healthy 2023, come what may in the markets. Please let us know of any new ways we can further your financial interests at this time. This, and every year, we remain grateful for your business.

Blake Street, CFA, CFP®

Founding Partner & Chief Investment Officer, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Tax Loss Harvesting: How to Make the Most Out of Market Volatility

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When we invest money, our main objective is to see the money grow. When we think about market losses and downturns, we may think of painful periods where we watch our account balances decrease instead of grow. While market losses are never fun, they are unfortunately a part of the normal investment life cycle. However, when market volatility hands us losses, there are some options to make lemonade out of lemons.  

What is tax loss harvesting?

Tax loss harvesting is the process of selling securities while they are at a loss, realizing that loss for tax purposes, and then redeploying that money into another investment (such as a different stock, bond, or mutual fund). The IRS does not allow you to sell an investment at a loss, receive the tax benefit, and then immediately reinvest those proceeds into the exact same security right away. Selling a security and re-purchasing it within the same 30-day window is called a “Wash Sale.” You can avoid triggering the Wash Sale rule by investing in something similar but different enough to avoid having the rule apply.

While most people will tend to do this only once at year end, this is actually something that can be done at any time in the year with no limit as to how frequently you do so. With custom indexing and commission-free trading, frequent tax loss harvesting has become more achievable than ever. In years of high volatility, frequently harvesting tax losses can have a big impact on your tax bill.  

Keep in mind that for this strategy to work, you must have capital invested in a taxable, non-retirement brokerage account. Your 401(k) and IRA are not eligible for tax loss harvesting.

How does it benefit you?

In years of extreme volatility, you may be able to accumulate a large amount of tax losses in a short period of time. These losses can then be used to offset future capital gains.  If you end up with more tax losses than you have gains to offset them in any given year, you can use the losses to offset up to $3,000 of ordinary income on your tax return.  

You will be able to carry forward an unlimited amount of these losses into future tax years until you’ve been able to use them up.

Tax loss harvesting can be especially useful for investors who might have highly concentrated company stock with a large amount of unrealized gains, or other legacy investments that they’ve been holding onto to avoid a large tax impact. These tax losses can be used to help decrease single stock risk and sell off legacy assets with little to no tax impact.

What are the next steps?

If you are a Warren Street client, we are already doing this for you (as applicable).  For clients with larger taxable brokerage accounts invested in our custom indexing strategy, you will likely see tax loss harvesting happening on a more frequent basis.  

All in all, seeing losses reported on your Form 1099 form is not necessarily a bad thing. While your long term objective remains the same in terms of seeking growth, taking advantage of short term volatility through tax loss harvesting can lead to a nice tax perk that can aid in your overall financial return on investments in the long run.

If you have any questions or would like to speak with one of our advisors for complimentary portfolio review, you can schedule a consultation here. 

Justin Rucci

Justin D. Rucci, CFP®

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.

Fighter Planes and Market Turmoil

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Have you been reading the daily headlines—watching markets stall, recover, and dip once again? If so, you may be wondering whether there’s anything you can do to avoid the motion sickness. 

If you already have a well-structured, globally diversified portfolio tailored for your goals and risk tolerances, our answer remains the same as ever: Your best course is to stay the course. Remember, our investment advice is aimed at helping you successfully complete your long-term financial journey. As “The Psychology of Money” author Morgan Housel has observed:  

“Bubbles do their damage when long-term investors playing one game start taking their cues from those short-term traders playing another.”

The Case of the Missing Bullet Holes

Have we ever told you the tale of the World War II fighter jets and their “missing” bullet holes? Today’s bumpy market ride seems like a good time to revisit this interesting anecdote about survivorship bias. 

The story stems from studies conducted during World War II on how to best fortify U.S. bomber planes against enemy fire. Initially, analysts focused on where the returning bombers’ hulls had sustained the most damage, assuming these were the areas requiring extra protection. Fortunately, before the planes were overhauled accordingly, statistician Abraham Wald improved on the evidence. He suggested, because the meticulously examined planes were the survivors, the extra fortification should be applied where they had fewer, not more bullet holes. 

How so? Wald explained, the surviving planes’ bullet-free zones were not somehow impervious to attack. Rather, when those zones were getting hit, those planes weren’t making it back at all. Survivorship bias had blinded earlier analyses to the defenses that mattered the most. 

Surviving Market Turbulence

You can think about the markets in similar fashion. For example, consider these recent predictions from a well-known market forecaster (emphasis ours): 

“Jeremy Grantham, the famed investor who for decades has been calling market bubbles, said the historic collapse in stocks he predicted a year ago is underway and even intervention by the Federal Reserve can’t prevent an eventual plunge of almost 50%.” 

— ThinkAdvisor, January 20, 2022

At a glance, that sounds pretty grim. But read between the lines for a hidden insight: He was also predicting the same collapse a year ago??? Yes, he was: 

“Renowned investor Jeremy Grantham, who correctly predicted the Japanese asset price bubble in 1989, the dot-com bubble in 2000 and the housing crisis in 2008, is ‘doubling down’ on his latest market bubble call.” 

— ThinkAdvisor, January 5, 2021

What if you had heeded Grantham’s forecasts a year ago, and left the market in January 2021? Time has informed us, you would have missed out on some of the strongest annual returns the U.S. stock market has delivered in some time. 

Now What?

If market volatility continues or worsens, brace yourself. You’re going to be bombarded with similar predictions. Few will be bold enough to foretell the exact timing, but the implications will be: (1) it’s going to happen soon, and (2) you should try to get out before it’s too late. 

Some of these forecasts may even end up being correct. Bear markets happen, so anyone who regularly forecasts their imminent arrival will occasionally get it right. Like a stopped clock. Or those continually looping infomercials on how “now” is the best time to load up on silver or gold. (Incidentally, many of these same precious metal purveyors are among those routinely predicting the end is near for efficient markets.)  

Bouts of market volatility are like the bullet holes we can see. They’re not pretty or fun. But interim volatility isn’t usually your biggest threat … attempting to avoid it is. The preparations we’ve already made may be less obvious, but they’re there—including tilting a portion of your portfolio into riskier sources of expected return for long-term growth, fortifying these positions with stabilizing fixed income, and shoring up the entire structure with global diversification. 

This brings us to the real question: What should you do about today’s news? Unless your personal financial goals have changed, your best course is probably the one you’re already on. That said, we remain available, as always, to speak with you directly. Don’t hesitate to be in touch with any questions or comments you may have. 

Phillip Law, Portfolio Analyst

Wealth Advisor, Warren Street Wealth Advisors

Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor

The information presented here represents opinions and is not meant as personal or actionable advice to any individual, corporation, or other entity. Any investments discussed carry unique risks and should be carefully considered and reviewed by you and your financial professional. Nothing in this document is a solicitation to buy or sell any securities, or an attempt to furnish personal investment advice. Warren Street Wealth Advisors may own securities referenced in this document. Due to the static nature of content, securities held may change over time and current trades may be contrary to outdated publications. Form ADV available upon request 714-876-6200.