Brett Rentmeester: The Great Market Illusion — Gold Soars, AI Booms, Debt Mounts
Summary
Market Outlook: The current investment landscape is characterized by significant uncertainty, with gold and technology both performing strongly, creating mixed signals for investors.
Investment Strategy: Investors are advised to maintain a balanced approach, keeping a foot on both the "gold brake" and the "AI accelerator," to navigate the volatile market conditions.
Precious Metals: Gold and silver have seen substantial gains, driven by central bank purchases, but investors should be cautious as these assets are no longer undervalued.
Cryptocurrency Insights: Bitcoin and other cryptocurrencies are seen as long-term assets with potential, but investors should be wary of possible near-term peaks due to historical cycles.
Equities Analysis: The S&P 500 is at high valuations, largely driven by technology stocks, suggesting a need for caution and potential rebalancing of portfolios.
Bonds Perspective: While short-term bonds offer some returns, the long-term outlook is less promising due to high debt levels and low compensation for risk.
Risk Management: Investors should focus on rebalancing portfolios, avoiding euphoria-driven decisions, and considering hedging strategies to protect against potential downturns.
Future Opportunities: As AI continues to integrate into the economy, there may be opportunities in traditional value stocks that can leverage technological advancements for optimization.
Transcript
You're in this car race, but the road you're on is windy and wet and slick and you've got a gold brake and you've got an AI accelerator gas pedal and you know, you want to just step on the accelerator and believe it's all going to be fine, but the minute you start doing that, you're fish tailing and you don't want to go off the road either. And you know the the challenge again adding to this mixed perspective of the world is um right now this year in 2025 gold is the top performing major asset class and yet technology is the top performing sector. Should these things be happening at the same time? Should they both be up to the magnitude they are? That's giving us another really mixed signal. Right? In the car analogy we're telling people to Hello and welcome to Wealthon. I'm Maggie Lake and joining me to discuss how to navigate these volatile markets is Brett Retester, founder and managing director of Windrock Wealth Management. Hey Brett, it's great to see you again. >> You as well, Maggie. >> So, we're going to try to give folks a road map of how to think about investing in what is a very complicated market. So, if you're listening to this and you have questions about anything we discuss or you want to get some help figuring out the right asset mix for you, you can get a free portfolio review from the Windrock team by hitting the description in the link or going over to wealth.com/free. And Brett, I talked to a lot of experienced market watchers and money managers and they all say that this is one of the most challenging macro environments they've seen in a long time. Why is there so much uncertainty out there? >> Yeah, I I would concur with that. Um there are just a lot of crossurrens. Now, let's acknowledge that there are always mixed views in the market, right? That's why for everybody buying one stock, there's somebody selling it. So, there's always divergent opinions. But I would say just based on my read and even following people I really like and respect, there is a very wide chasm here of, you know, people saying this is the 1999 tech bubble and it's going to collapse and other people saying, you know, the Trump administration policies are just getting us going and the AI revolution's taking us forward, you know. And I think part of this, Maggie, is the fact that we're at this juncture that we've spoken about in prior interviews. I refer to it as referencing the fourth turning where old systems, the old way of doing things is kind of breaking down and there's a new exciting but uncertain technological future ahead which is certainly being driven by AI but also includes robotics and all these other things and you know it leaves a little bit of the interpretation in the eye of the beholder and you know to that point we have an image that uh I want to share with viewers and spend a moment on. It's a bit of an optical illusion, but uh take a look at the image for a minute and there's a lady in it and and just, you know, spend one moment looking at it because this is kind of like trying to analyze the market today. And once you've done that, um you I guess the question is, did you see an old lady in the picture or a young lady in the picture? And uh the optical illusion is they're both there if you look close enough. And you know, I think that's where investors are today is, you know, do you see young or old? Do you see, hey, GDP growth is looking good, great, or do you see, oh, it's artificial. It's being driven by all this AI uh spend that can't last. Do you see, oh, Fed's easing, that's good news. Rates are coming down. Or do you see, on the other hand, uh they're only coming down because of weakness and concern. And you know, you could even go as far as say, do you see peace or war in the world, right? It's it's there's a lot of these things that are very hard to uh to put your arm around and and it's actually even accelerated in the sense maybe that you and I both know. The government's now shut down. So, as mixed as the data has been, >> now we have no data in a lot of areas. So, if investors felt a little lost before, now they're really grasping at straws. >> And you know what's really interesting? So I So I looked at that and I knew I know that I'm supposed to see two things, but I can only see the young lady. Like I can't even find the old lady, which when I was thinking about it, I think is very telling because depending on who you talk to, people are seeing vastly different scenarios. It's not like we're all operating off of the same and and tell me if you think this is a difference right now. And also adding to this kind of environment we're in. It's not like we're operating off the same set of facts or data and we just have different opinions. People are sort of living in completely different ecosystems and and completely different situ. >> That's right. And I and I think what what I attribute that fact to is that we're at this inflection point that is not we don't see all the time and these inflection points are very hard to read. And um you know it's because of that it's because of kind of the breakdown of the old but the excitement of the new. So the people in the bullish camp the ones that see the young lady you know you might be the the more optimistic camp. They see this exciting technological future. They see restoring things in America. They see AI and robotics and excitement and change. And if you see the old lady you're probably more inclined to see the problems of the world which are not going away. that notwithstanding all the growth and excitement, there's record debt. We're running deficits. There's concern about fiat money and the government's continuing to have to just print into oblivion. So, those those issues haven't gone away. So, we're going to have to live in this world for a while. This is kind of the investor dilemma where you've got, you know, the historical readings on the market are pretty damning. you know, your all-time record high valuations and all these other things, record debt, no like >> trajectory out of the debt problems, but you have to acknowledge the excitement and the change underway. >> Or or Brett, you could be like me and even though I see the young woman, which is funny you say I'm an optimist, I'm I'm stressed out and worried all the time as well. So I I I feel like I'm sort of living this, you know, split identity where maybe I'm I'm feeling both, but instead of that sort of enhancing my experience, it's completely, you know, fracturing, you know, my any any kind of mental model I had and I'm feeling like I'm in a tugofwar, you know, what kind of you mentioned the investing dilemma. What kind of challenges it does this create when you're trying to make investment decisions? I mean, how are you guys thinking about this? What are people most likely to get stuck on? >> Yeah. Well, I think you you laid it out actually perfectly because I find myself in this having to hold myself back from the swing of emotions or this bipolar one day everything's great and oh, this is going to be and the next day the world's falling apart, right? It's it's that feel that I think we're all getting. Part part of it's driven by all the geopolitical change intentions around the world as well. You know, we um we've got kind of an analogy that we're talking to clients about um during our our quarterly webinars, which we're doing right now. We do that every every quarter and it's kind of this analogy of when you're an investor, you're in a race. You're in a race to gain, but you've got to be cautious. And so the analogy is you're in a car, you're in this car race, but the road you're on is windy and wet and slick and you've got a gold brake and you've got an AI accelerator gas pedal. And you know, you want to just step on the accelerator and believe it's all going to be fine, but the minute you start doing that, you're fish tailing and you don't want to go off the road either. And you know, the the challenge again adding to this mixed perspective of the world is um right now this year in 2025, gold is the top performing major asset class and yet technology is the top performing sector. So, it's almost like in this race >> you're hitting the gas and the accelerator at the same time like they're, you know, should these things be happening at the same time? Should they both be up to the magnitude they are? That's giving us another really mixed signal, right? Why is gold doing so well at the same time? Tech doing so well. So, it's a very confusing backdrop. And I guess in the car analogy, we're telling people to, you know, don't drop out of the race. Keep going. You know, don't sell all your stocks, but have your foot kind of on the brake, too, because this is a market where it's easy to get greedy or think the winners are just going to keep running. And I think if history is a guide, you want to take some profit. You want to not get totally defensive here, but you want to be thinking about what could go wrong as well. So, it's a very balanced view as we go into year end. >> If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance, at hardassallalliance.com. That's hardassallalliance.com. You know, um it's funny that you're using the car analogy. I I just had the privilege of uh of talking with the um CEO of McLaren, the Formula 1 team. And when you're in that kind of competitive competitive race, in fact, I don't know if anyone's in Austin just had got a chance to go see it at an amazing race there, but you're you're not just slamming, you know, all the way down like winning those races at that level, at that top level takes so much strategy, you know, it takes so much sort of planning and it's really um you know, it's really complex. So it I I like that analogy and I like the idea of us trying to um you know be using all the levers at our disposal because that's kind of what's required now. So I think if if folks are listening to this, it's really going to resonate with them and they're probably looking across their holdings and their assets. And if you haven't, this is a good time to sort of stress test your portfolio. We've been saying that, but it's it's really important right now. So walk me through maybe some of the categories that people are most likely to hold >> and what is and what is the riskreward profile across some of these assets that people should have in mind as they think about working both the gas pedal and the brake and I don't know what do you want to start with maybe gold precious metals >> let's start with precious metals just because they've been in the news they they've had a bigger run than most people were expecting. We were expecting something akin to this but most people were not. So, just when we tally it up through yesterday, we're having a little bit of a correction today. Gold's up about 65% on the year. Silver's up 80%. Uh, the broad mining index is up 137%. So, it's been a great year. So, again, normally people think, well, gold and these things go up when times are bad. So, you you've got, you know, tremendous returns here. And there's some reason to think it continues. A lot of reason actually. I mean, first and foremost, the trajectory of where the world's heading isn't changing. That is to say, there's no plan to pay down debt or even get it on a sustainable trajectory. And I'm I'm not just referring to the US. I'm referring to Europe. I'm referring to China. The whole world is going to keep, you know, needing to print money. The more paper money in the system, the more things like gold and silver are going to be an anchor. And that's why you're seeing central banks and the big institutions buy gold in in big quantity this year. That has been the driver of the market. Hasn't really been driven by retail money. So those are positives for why metals can keep going forward. On the other hand, gold is the top performer the last two years in a row. So some people look at they call them these asset class quilts like which box which category did the best each year? Large cap, small, you know, different types of assets. And one of the lessons for that is most things don't stay at the top two beyond two or three years, right? There there's got to be a breather. So I would say the negative is gold, silver, the whole category. It's not cheap anymore. >> It it might be fairly valued, but we've gone out of the range where it was just people were missing it and it was dirt cheap. It still fits in portfolios, but at this point, you know, you you've got to be a little more mindful at your buyin points and and how you're thinking about it. Now, there are a lot of levers that still could lead to big upside here. And I'm going to give you two examples. And these, keep in mind, these are not projections. These are just thought experiments for people. >> First one on gold. Um, let's say we had a scenario where 10% of a portfolio were in gold and I said the whole world's going to come crumbling down. People are going to lose faith in everything, paper, etc., etc. Um, is it conceivable that the rest of somebody's portfolio, the 90% goes to zero and that 10% in precious metals saves the day and goes up maybe 10x and you end up with uh, you know, basically your whole portfolio back even though everything else failed besides that one position in precious metals. Those are the kind of hypotheticals of why people hold precious metals. Now, that's an extreme example, but I'm just, you know, illustrating why people think precious metals are an important component because it's kind of this feeling like, well, if everything else goes by the wayside, maybe this performs in a way that kind of gets me out of trouble. >> Yeah. I think I think put another way too, I think that so many of us are really starting to focus back on hedges in your portfolio and like true diversification in your portfolio or or at least questioning is the diversification that we understood that split bond stocks what what we need for tomorrow and and there I think there's a lot of room in question there. So it's it's kind of a new way we all have to approach this. Cryptocurrency comes up all the time, Brett, with this too. So maybe walk me through what the thought is there. And this is an area where I feel like not only have we seen a lot of price action, but there's a really wide set of opinions on that that I think are holding some people back. >> Yeah. Huge set of divergent opinions. Um I mean some people think uh bit let's use Bitcoin as an example. uh bitcoin will become the de facto currency of the world in the future or something to that extent and to them it's a hedge against the dollar and the euro and the yen and and something you have in a portfolio because those other things are failing >> the other camp would say no it's correlating with the NASDAQ it's boom and bust it's speculation and you know taking risk so you know the reality is it's a little bit of both it's probably more correlated to risk assets still and We're also similar to gold and silver. We're at an interesting juncture for cryptocurrencies because historically they've moved in a pretty predictable pattern with the four-year so-called having cycle or after the inflation rate cuts in half every four years. It's kind of a predictable cycle now. Albeit, it's a short history. So maybe these patterns aren't forever. Maybe they're changing. Maybe they're more based on liquidity, etc. But I guess starting with the negative on this one, the negative would say, hey, based on these four-year having cycles, we should be nearing a relative top in cryptocurrencies about now, sometime this fall. So there's a little bit of caution because of that. Now, on the other side of it though, Maggie, you've got some posit some real positives, which is um you know, Wall Street's endorsing cryptocurrencies. It's just getting into the system. And it's not only Wall Street, it's it's corporations putting it on balance sheets. It's governments having it as a reserve asset. And when you start looking at, well, what were the historical indicators that you were at a market top in the past, none of them are there yet. Um, in particular, you're not seeing euphoria yet. You know, normally a top is is made, not always, but normally a top is made on huge excitement and everybody wants in and everybody neighbors are talking about it. you know, this has been kind of a silent grind up and, you know, volatility down for Bitcoin and other cryptocurrencies. So, again, I think um our point of view is this is a long-term asset you want in a portfolio, but don't get greedy. You know, we could be nearing a relative top and if you're in it for the next five years, you probably close your eyes, but it could be a, you know, could be uh painful for those that aren't used to waiting through a down cycle. if in fact the cycle is topping out um sometime in in these next number of months. >> So you bring up a good point that we haven't touched on. It's probably really important which is time frame, right? Time frame really matters in all of these uh I'm I'm sure investment decisions especially when we're at this transition point. >> It does. It does. And and um especially in the cryptocurrency markets, you know, some people's time frame is two hours, right? There's traders, speculators, hedge funds. For us, it's more of a core asset class and we've been in it well over a decade. It's something we believe in and therefore we can look through the ups and downs, but we also would like to trim profits and not get, you know, not get too out of uh balance when things are going up. So, I think we've been at a point where if people are well above where they're comfortable, taking some profits is is a prudent approach. And certainly if we see some euphoria and it gets, you know, more excitement that that would be a time to really evaluate and take some chips off. You can always add them back without making it, you know, a trading game. Just uh, you know, being prudent. >> Yeah. Nothing wrong with trimming into strength. Um, but that's I I think that's a a great point, a great reminder that a lot of us think we know what kind of investor or time frame we're comfortable in, but but you know, it's it's always good doing a gut check on that because people say they're a long-term investor, but if you don't want to experience any short-term downdrafts um or loss, >> they they also say on average, people will say that they're willing to take a lot more risk than they can handle when when the risk is here. So even go back as recently as April during the tariff tantrum period all of a sudden the world's freaking out and you know people are down. So cryptocurrency is unique because the volatility is so big and when you look at all the prior patterns of bull markets when things are still going up it is not uncommon to have 15 20 30 plus percent drawd downs along an upward trending you know path. So that's just part of the territory but a lot of people in it are new. They're used to the stock market and when something loses a third of its value in the stock market, it might be dead for 10 years. Cryptocurrency is a different beast, but uh people have to be aware of that. >> Yeah. Yeah. It's important to explore all of that. Just a quick question. I think it applies probably to to to crypto. In my mind, I'm asking this more frequently now with gold. um ETFs an okay vehicle to express that through or do you prefer if you're able to put people into the actual uh gold commodity or the actual you know cryptocurrency on some kind of cold storage device or something. How are you feeling about that? >> Yeah, I mean on on the precious metal side, we clearly have a preference to own the metal itself because these days you don't have to take possession of it. you can hold it in a non-bank vault very safely. Um, one of the reasons for that that we didn't talk about back to gold and silver for a moment is the fact that if you really look at the market, there is a lot of data that there are ton of pe well what I'll call paper contracts for every ounce of let's use silver. And the data I've seen recently, and it varies by source, is well over 300 paper contracts for every ounce of silver. Most of those people with the paper contracts think they own it. Yes. Um, if there's ever a run on the metal, which we've seen a little bit the last week around some different countries, you could have a scenario where, you know, one person gets the ounce of silver, but 300 people think that's theirs. What can that do to price on the upside? So, our bias is always own it physically first and then use some ETFs and stuff for more convenient trading, but fill the bucket of precious metals physically. >> Um, cryp cryptocurrencies, it's a little different. We still personally have a bias towards owning the physical cryptocurrencies, but I think the ETFs that are out there have pretty clear um rules that they're owning that they actually own what they say they own. They own the Bitcoin and and it is easier. Cryptocurrencies are still an area where it's diff it's more difficult to get on these exchanges. And certainly when you start talking about private wallets and stuff, um, some of our clients do that, but but it's it's not something we actively do because of the complexity and risk. >> This October, Wealthian's putting the spotlight on silver with expert interviews, deep analysis, and a special in-depth report from our partners at SCP Resource Finance. To receive this report and other exclusive benefits, you can sign up to become an accredited investor with Wealthon at wealthon.com/acredited or by finding the link in the description below. Speaking of silver, Wealthon will be on the ground in Toronto for the SCP Resource Finance second global silver conference happening on Thursday, October 23rd. Legendary investor Eric Sprat headlines the event alongside 15 silver mining companies presenting their top projects. It's a must attend for anyone serious about investing in silver. Tickets both in person and virtual are now available. Find out more in the description below. Yeah. Yeah. Which is why I separated them, but um but excellent point. There's a lot of friction there still. Um but but there's also been a lot of scrutiny on the on the custody and and you know what they're backed by. So, um, great answer and and and we're going to be, you know, in the future, I think, talking more about just broadly as a as an investing community, more about what it means to own a hard asset, how you do that, how you want to express that. So, you can always go to over to wealthy.com to get more info on that. So, that brings us to what probably most people have an the highest exposure to, Brett, which is equities. >> That's right. That's right. And honestly, equities are perhaps the most dangerous on paper. And and the reason I say that is based on most measures of valuation, the S&P 500 is at all-time record high um for valuation. And you can look at things within that that give you a dangerous fact pattern such as it's never a healthy sign when one sector is dominating and pushing the whole index up. There's a concentration risk. That's been technology. So technology as a sector based on I'll use one measure price relative to sales. So relative to sales prices are almost 10 times sales. That's much higher than the 1999 tech bubble top. And what that's led to is a huge concentration of technology in the S&P 500. So the top 10 companies in the S&P 500 make up 39% of the S&P 500 index. So basically what we're saying is technolog is driving the whole S&P and 10 stocks are driving the whole tech sector within the S&P. So as long as those 10 keep performing that's great but they're at a record valuation. So that's a danger sign. You know most times in history when you see that it's a sign to derisk to be cautious. On the other hand no two markets are the same. And you know I think this AI story is still very early. Um, you know, we went from a year ago people playing around with a better search engine to now companies using it to do coding to a year or two from now, you know, if you believe some of the estimates, it will have uh a huge impact on society, whether good or bad, probably a little bit of both. And so there is great promise and leverage in a way. It's almost like the application layer of the internet. the internet connected us all and we're doing some useful things. Now we're adding intelligence to it and we can only imagine the future where you have humanoid robots that are a AI enabled and you know can have dialogue with people. I mean we're not so far from that. So in a way that is a a totally different future that we have to prepare for and I don't think that's fully priced in now. Maybe they've run ahead. Some of these stocks have run ahead of where they should be valuation wise today. But I think there are ways, you know, to be active in it. So, you know, again, what does that mean for investors? Everybody's got to make their their own determination. But I think for us, it's having a discipline that if you've got winners that have run way up, it might be time to consider, you know, bringing those back into alignment with with maybe a more comfortable level. >> Yeah. Which we know is so hard to do. By the way, as we're taping this, uh there was just a um an item of a program that ran on British television all about AI and at the very end they've revealed that the person presenting the program was AI was an AI >> um themselves. So, you're sort of getting a peak um for those who say it still has difficulties, but yeah, but we're getting little peaks of what's possible now. And I think that um it's it's equal parts exciting and scary. So um so that leaves us I I just this is the one I'm I'm really interested in and but this is not exhaustive. We all know there's lots of different way, you know, asset smaller asset classes and um alternative assets you can have in your portfolio, but we're just covering the biggest I think u areas of holdings and bonds to me seem the trickiest right now where we're sitting in this transition whether you believe it's a forth turning or not or but clearly with levels of debt, this seems a really hard one because it used to be the safe haven. It used to be our diversifier. How how do we need to think about bonds right now? And I'm specifically talking about uh government bonds, but feel free to wander into corporate area too if you want to. But h what how are you thinking about the role of bonds? >> Well, um let's start out with the positives for a moment. Um we're at least in an era where people are making some interest on their money, right? It wasn't that long ago was basically we were in a zero interest rate world or in an upside down world. In Europe, you were paying to give people your money, right? Pass that. So there there is some return to be had but um so the positive is there's some return to be had and things have been pretty stable. The the Fed has cut rates once so the the short end of the yield curve shorter duration bonds um have come down a bit but the long term is somewhat stable. So I'd say it's a stable outlook but unexciting. So, it's it's an okay place to park money in shorter term bonds, but we wouldn't reach out to longer term bonds for the reason that we talked about, which is earning a little bit of money, but are you making anything after tax and after inflation? The epicenter of the problem is going to be over time the bond market. That's what the whole world's struggling with. Who's going to keep buying all the US, not all the only the US government bonds, but European bonds, you know, go down the list. Most countries >> bonds, I mean, yeah. sovereign >> it's like paper coming out of you know a printing machine as fast as anybody can watch it. So it's a real dilemma. Now there are some potential answers like these stable coins that are developing and maybe the demand from those are part of the solution etc. But I think the people that are really concerned about the debt levels and the trajectory of all of this and the money printing would be most concerned about bonds. But I don't think it's time to panic just yet, at least in short-term bonds. So, and when you go beyond short-term bonds, the challenge is the opportunity sets kind of unexciting. >> So, the most extreme would be high yield corporate bonds or junk bonds, things that are well below investment grade. At prior recessions, when things really blew up going back to prior periods, maybe you'd get 10%, even 20% at the extreme, more than you would on a US Treasury. today. I believe that's around two or two and a half%. It's near a historical low. So, you're not really being compensated to go out on a risk curve and put your neck out there. So, I think bonds, short-term bonds are a place for liquidity and um you know, having some what we'd call dry powder for other opportunities, but it's not a very exciting area, you know, at the moment for us. >> Yeah. Uh so, great overview. Uh and and you're right, it's going to that's going to be sort of the really interesting spot to watch. Um and I think you you once again great analogy on the time frame, right? There's this larger picture which you know, but maybe indicate some trouble for bonds that we need to some big problems that need to be solved, but shorter term there are still uses and things that can happen in that shorter time frame that we need to keep in mind. Um so that idea of the push and pull and the gas and the break, I think is a great one. Uh so so with all this information, what's how are you thinking about strategy? What are you advising your clients? How what kind of framework should they be operating on? >> Yeah. Well, I think the first thing is to acknowledge this is a very difficult backdrop. Like we said, stock market all-time high. You had you had precious metals and cryptocurrencies that were undervalued. Now they've had huge runs, so they might still be a good place to be, but they're not cheap like they were. And the bond market's kind of uninspiring. So where do you put your money? You know, it's it's a balance. And of course, we talk about the stock market as if it's one thing, but there are many cheap sectors, many areas of opportunity. Um, I think one of the biggest things we're guiding people on and and it should be in everybody's kind of mind is you should have a range that you're comfortable with around an allocation to something. And when it runs well above it, you should look to pull it back and rebalance. I think a lot of, you know, that's what advisers tend to do. A lot of individual investors tend not to. They just let things drift. The winners win until they get clobbered. And so taking a look at a portfolio, having an idea of what a reasonable or appropriate range for someone's risk tolerance is, and then actually taking action and pulling it back when it's warranted. It would be one piece of the puzzle. Um I think some patience you know we're also beyond all the things we talked about the mixed environment we're also bombarded in this world with and I find it especially in the financial industry it used to be you know you get the Wall Street Journal and you'd read stuff and you get some updates now it's on X you're getting real time to the minute any platform it's so quick so changing and it almost creates this mindset where everybody wants to be a trader and act and do something about it that is the tendency that's how this frequent data pushes you in that direction of wanting to do it. But you've got to rein yourself in and remember in most cases people are still investing for 20 30 40 50 plus years and you can't let yourself get whipsawed around by all the news events. So a little bit of patience and in a market like this I'd say no big bets like you know don't don't bet the farm on any one outcome. There are some strong counter forces and investing is all about probabilities. Nobody's got a perfect crystal ball. So I think you know balance things out invest where you have some conviction but this is not a market to take undue risk. Um >> and how can we think about protection too? I think that >> you know there's been a shift about just focusing on gains but also with the nervousness on and the uncertainty people trying to think about you know how do I protect what I what I've created or protect my nest egg or the gains that I've worked so hard to get. How do we think about that? I think there's a couple things. First is what we said, rebalance. You know, don't let your risk get way well beyond what you're comfortable with. That would be one. Two, look for signs of euphoria. If you see kind of euphoric behavior in any of these markets, like if we have a traditional fourth quarter rally and things go way up, I don't know if we will or we won't, but we've had that before. Um, that might be a moment to be like, "Wow, okay, I I was already a little over my skis and risk and now things are way up and everybody's excited. It's kind of reverse psychology. When everybody else is really excited, sometimes you've got to pull the reinss back, right? When everybody's concerned, you've got to swoop in. There are several investment strategies we employ at different times to also hedge. That can include you can keep your investments and you can buy protection put options or other things to take away kind of the most severe outcomes, you know, if you're concerned about that. There are also strategies within equities that are more of people refer to sometimes as hedge fund strategies, but it could be long short where there are strategies that might own some stocks and short others and say they're kind of neutral to what the stock market does. It's more about how the individual stocks perform. And then finally, um, at some point there we might see a big rotation back to some of the unloved kind of value names in the equity markets. It's been a growth technologydriven market. It was going into the tech bubble as well. On the other side of that was a long period of kind of the boring value stocks reasserting themselves. So at some point, especially if we see euphoria first in technology, there might be those opportunities to think about as a way of uh kind of relative de-risking, let's call it. >> Yeah. And one of the one of the narratives I love which we don't know if this will play out but is the idea that as AI snakes its way into the economy some of those more traditional value type companies will really be able to optimize it and we might see um you know the sort of AI story drift that way which is going to be interesting to watch. Brett you gave us thank you so much. This was such a wonderful conversation and I think gave us a great framework um of questions to ask ourselves as we especially as we're going into year end. It's such a good time to sort of do that housekeeping. Um, and we're going to continue to try to focus people's minds there. So, thank you so much. So, appreciate it. >> Great chatting with you. >> Uh, if you would like some more information about anything we discussed or to explore some of the strategies, you can get a free portfolio review from the Windrock team. Just hit the link in the description or head over to wealth.comfree. Thanks so much for watching. We'll see you again next time.
Brett Rentmeester: The Great Market Illusion — Gold Soars, AI Booms, Debt Mounts
Summary
Transcript
You're in this car race, but the road you're on is windy and wet and slick and you've got a gold brake and you've got an AI accelerator gas pedal and you know, you want to just step on the accelerator and believe it's all going to be fine, but the minute you start doing that, you're fish tailing and you don't want to go off the road either. And you know the the challenge again adding to this mixed perspective of the world is um right now this year in 2025 gold is the top performing major asset class and yet technology is the top performing sector. Should these things be happening at the same time? Should they both be up to the magnitude they are? That's giving us another really mixed signal. Right? In the car analogy we're telling people to Hello and welcome to Wealthon. I'm Maggie Lake and joining me to discuss how to navigate these volatile markets is Brett Retester, founder and managing director of Windrock Wealth Management. Hey Brett, it's great to see you again. >> You as well, Maggie. >> So, we're going to try to give folks a road map of how to think about investing in what is a very complicated market. So, if you're listening to this and you have questions about anything we discuss or you want to get some help figuring out the right asset mix for you, you can get a free portfolio review from the Windrock team by hitting the description in the link or going over to wealth.com/free. And Brett, I talked to a lot of experienced market watchers and money managers and they all say that this is one of the most challenging macro environments they've seen in a long time. Why is there so much uncertainty out there? >> Yeah, I I would concur with that. Um there are just a lot of crossurrens. Now, let's acknowledge that there are always mixed views in the market, right? That's why for everybody buying one stock, there's somebody selling it. So, there's always divergent opinions. But I would say just based on my read and even following people I really like and respect, there is a very wide chasm here of, you know, people saying this is the 1999 tech bubble and it's going to collapse and other people saying, you know, the Trump administration policies are just getting us going and the AI revolution's taking us forward, you know. And I think part of this, Maggie, is the fact that we're at this juncture that we've spoken about in prior interviews. I refer to it as referencing the fourth turning where old systems, the old way of doing things is kind of breaking down and there's a new exciting but uncertain technological future ahead which is certainly being driven by AI but also includes robotics and all these other things and you know it leaves a little bit of the interpretation in the eye of the beholder and you know to that point we have an image that uh I want to share with viewers and spend a moment on. It's a bit of an optical illusion, but uh take a look at the image for a minute and there's a lady in it and and just, you know, spend one moment looking at it because this is kind of like trying to analyze the market today. And once you've done that, um you I guess the question is, did you see an old lady in the picture or a young lady in the picture? And uh the optical illusion is they're both there if you look close enough. And you know, I think that's where investors are today is, you know, do you see young or old? Do you see, hey, GDP growth is looking good, great, or do you see, oh, it's artificial. It's being driven by all this AI uh spend that can't last. Do you see, oh, Fed's easing, that's good news. Rates are coming down. Or do you see, on the other hand, uh they're only coming down because of weakness and concern. And you know, you could even go as far as say, do you see peace or war in the world, right? It's it's there's a lot of these things that are very hard to uh to put your arm around and and it's actually even accelerated in the sense maybe that you and I both know. The government's now shut down. So, as mixed as the data has been, >> now we have no data in a lot of areas. So, if investors felt a little lost before, now they're really grasping at straws. >> And you know what's really interesting? So I So I looked at that and I knew I know that I'm supposed to see two things, but I can only see the young lady. Like I can't even find the old lady, which when I was thinking about it, I think is very telling because depending on who you talk to, people are seeing vastly different scenarios. It's not like we're all operating off of the same and and tell me if you think this is a difference right now. And also adding to this kind of environment we're in. It's not like we're operating off the same set of facts or data and we just have different opinions. People are sort of living in completely different ecosystems and and completely different situ. >> That's right. And I and I think what what I attribute that fact to is that we're at this inflection point that is not we don't see all the time and these inflection points are very hard to read. And um you know it's because of that it's because of kind of the breakdown of the old but the excitement of the new. So the people in the bullish camp the ones that see the young lady you know you might be the the more optimistic camp. They see this exciting technological future. They see restoring things in America. They see AI and robotics and excitement and change. And if you see the old lady you're probably more inclined to see the problems of the world which are not going away. that notwithstanding all the growth and excitement, there's record debt. We're running deficits. There's concern about fiat money and the government's continuing to have to just print into oblivion. So, those those issues haven't gone away. So, we're going to have to live in this world for a while. This is kind of the investor dilemma where you've got, you know, the historical readings on the market are pretty damning. you know, your all-time record high valuations and all these other things, record debt, no like >> trajectory out of the debt problems, but you have to acknowledge the excitement and the change underway. >> Or or Brett, you could be like me and even though I see the young woman, which is funny you say I'm an optimist, I'm I'm stressed out and worried all the time as well. So I I I feel like I'm sort of living this, you know, split identity where maybe I'm I'm feeling both, but instead of that sort of enhancing my experience, it's completely, you know, fracturing, you know, my any any kind of mental model I had and I'm feeling like I'm in a tugofwar, you know, what kind of you mentioned the investing dilemma. What kind of challenges it does this create when you're trying to make investment decisions? I mean, how are you guys thinking about this? What are people most likely to get stuck on? >> Yeah. Well, I think you you laid it out actually perfectly because I find myself in this having to hold myself back from the swing of emotions or this bipolar one day everything's great and oh, this is going to be and the next day the world's falling apart, right? It's it's that feel that I think we're all getting. Part part of it's driven by all the geopolitical change intentions around the world as well. You know, we um we've got kind of an analogy that we're talking to clients about um during our our quarterly webinars, which we're doing right now. We do that every every quarter and it's kind of this analogy of when you're an investor, you're in a race. You're in a race to gain, but you've got to be cautious. And so the analogy is you're in a car, you're in this car race, but the road you're on is windy and wet and slick and you've got a gold brake and you've got an AI accelerator gas pedal. And you know, you want to just step on the accelerator and believe it's all going to be fine, but the minute you start doing that, you're fish tailing and you don't want to go off the road either. And you know, the the challenge again adding to this mixed perspective of the world is um right now this year in 2025, gold is the top performing major asset class and yet technology is the top performing sector. So, it's almost like in this race >> you're hitting the gas and the accelerator at the same time like they're, you know, should these things be happening at the same time? Should they both be up to the magnitude they are? That's giving us another really mixed signal, right? Why is gold doing so well at the same time? Tech doing so well. So, it's a very confusing backdrop. And I guess in the car analogy, we're telling people to, you know, don't drop out of the race. Keep going. You know, don't sell all your stocks, but have your foot kind of on the brake, too, because this is a market where it's easy to get greedy or think the winners are just going to keep running. And I think if history is a guide, you want to take some profit. You want to not get totally defensive here, but you want to be thinking about what could go wrong as well. So, it's a very balanced view as we go into year end. >> If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance, at hardassallalliance.com. That's hardassallalliance.com. You know, um it's funny that you're using the car analogy. I I just had the privilege of uh of talking with the um CEO of McLaren, the Formula 1 team. And when you're in that kind of competitive competitive race, in fact, I don't know if anyone's in Austin just had got a chance to go see it at an amazing race there, but you're you're not just slamming, you know, all the way down like winning those races at that level, at that top level takes so much strategy, you know, it takes so much sort of planning and it's really um you know, it's really complex. So it I I like that analogy and I like the idea of us trying to um you know be using all the levers at our disposal because that's kind of what's required now. So I think if if folks are listening to this, it's really going to resonate with them and they're probably looking across their holdings and their assets. And if you haven't, this is a good time to sort of stress test your portfolio. We've been saying that, but it's it's really important right now. So walk me through maybe some of the categories that people are most likely to hold >> and what is and what is the riskreward profile across some of these assets that people should have in mind as they think about working both the gas pedal and the brake and I don't know what do you want to start with maybe gold precious metals >> let's start with precious metals just because they've been in the news they they've had a bigger run than most people were expecting. We were expecting something akin to this but most people were not. So, just when we tally it up through yesterday, we're having a little bit of a correction today. Gold's up about 65% on the year. Silver's up 80%. Uh, the broad mining index is up 137%. So, it's been a great year. So, again, normally people think, well, gold and these things go up when times are bad. So, you you've got, you know, tremendous returns here. And there's some reason to think it continues. A lot of reason actually. I mean, first and foremost, the trajectory of where the world's heading isn't changing. That is to say, there's no plan to pay down debt or even get it on a sustainable trajectory. And I'm I'm not just referring to the US. I'm referring to Europe. I'm referring to China. The whole world is going to keep, you know, needing to print money. The more paper money in the system, the more things like gold and silver are going to be an anchor. And that's why you're seeing central banks and the big institutions buy gold in in big quantity this year. That has been the driver of the market. Hasn't really been driven by retail money. So those are positives for why metals can keep going forward. On the other hand, gold is the top performer the last two years in a row. So some people look at they call them these asset class quilts like which box which category did the best each year? Large cap, small, you know, different types of assets. And one of the lessons for that is most things don't stay at the top two beyond two or three years, right? There there's got to be a breather. So I would say the negative is gold, silver, the whole category. It's not cheap anymore. >> It it might be fairly valued, but we've gone out of the range where it was just people were missing it and it was dirt cheap. It still fits in portfolios, but at this point, you know, you you've got to be a little more mindful at your buyin points and and how you're thinking about it. Now, there are a lot of levers that still could lead to big upside here. And I'm going to give you two examples. And these, keep in mind, these are not projections. These are just thought experiments for people. >> First one on gold. Um, let's say we had a scenario where 10% of a portfolio were in gold and I said the whole world's going to come crumbling down. People are going to lose faith in everything, paper, etc., etc. Um, is it conceivable that the rest of somebody's portfolio, the 90% goes to zero and that 10% in precious metals saves the day and goes up maybe 10x and you end up with uh, you know, basically your whole portfolio back even though everything else failed besides that one position in precious metals. Those are the kind of hypotheticals of why people hold precious metals. Now, that's an extreme example, but I'm just, you know, illustrating why people think precious metals are an important component because it's kind of this feeling like, well, if everything else goes by the wayside, maybe this performs in a way that kind of gets me out of trouble. >> Yeah. I think I think put another way too, I think that so many of us are really starting to focus back on hedges in your portfolio and like true diversification in your portfolio or or at least questioning is the diversification that we understood that split bond stocks what what we need for tomorrow and and there I think there's a lot of room in question there. So it's it's kind of a new way we all have to approach this. Cryptocurrency comes up all the time, Brett, with this too. So maybe walk me through what the thought is there. And this is an area where I feel like not only have we seen a lot of price action, but there's a really wide set of opinions on that that I think are holding some people back. >> Yeah. Huge set of divergent opinions. Um I mean some people think uh bit let's use Bitcoin as an example. uh bitcoin will become the de facto currency of the world in the future or something to that extent and to them it's a hedge against the dollar and the euro and the yen and and something you have in a portfolio because those other things are failing >> the other camp would say no it's correlating with the NASDAQ it's boom and bust it's speculation and you know taking risk so you know the reality is it's a little bit of both it's probably more correlated to risk assets still and We're also similar to gold and silver. We're at an interesting juncture for cryptocurrencies because historically they've moved in a pretty predictable pattern with the four-year so-called having cycle or after the inflation rate cuts in half every four years. It's kind of a predictable cycle now. Albeit, it's a short history. So maybe these patterns aren't forever. Maybe they're changing. Maybe they're more based on liquidity, etc. But I guess starting with the negative on this one, the negative would say, hey, based on these four-year having cycles, we should be nearing a relative top in cryptocurrencies about now, sometime this fall. So there's a little bit of caution because of that. Now, on the other side of it though, Maggie, you've got some posit some real positives, which is um you know, Wall Street's endorsing cryptocurrencies. It's just getting into the system. And it's not only Wall Street, it's it's corporations putting it on balance sheets. It's governments having it as a reserve asset. And when you start looking at, well, what were the historical indicators that you were at a market top in the past, none of them are there yet. Um, in particular, you're not seeing euphoria yet. You know, normally a top is is made, not always, but normally a top is made on huge excitement and everybody wants in and everybody neighbors are talking about it. you know, this has been kind of a silent grind up and, you know, volatility down for Bitcoin and other cryptocurrencies. So, again, I think um our point of view is this is a long-term asset you want in a portfolio, but don't get greedy. You know, we could be nearing a relative top and if you're in it for the next five years, you probably close your eyes, but it could be a, you know, could be uh painful for those that aren't used to waiting through a down cycle. if in fact the cycle is topping out um sometime in in these next number of months. >> So you bring up a good point that we haven't touched on. It's probably really important which is time frame, right? Time frame really matters in all of these uh I'm I'm sure investment decisions especially when we're at this transition point. >> It does. It does. And and um especially in the cryptocurrency markets, you know, some people's time frame is two hours, right? There's traders, speculators, hedge funds. For us, it's more of a core asset class and we've been in it well over a decade. It's something we believe in and therefore we can look through the ups and downs, but we also would like to trim profits and not get, you know, not get too out of uh balance when things are going up. So, I think we've been at a point where if people are well above where they're comfortable, taking some profits is is a prudent approach. And certainly if we see some euphoria and it gets, you know, more excitement that that would be a time to really evaluate and take some chips off. You can always add them back without making it, you know, a trading game. Just uh, you know, being prudent. >> Yeah. Nothing wrong with trimming into strength. Um, but that's I I think that's a a great point, a great reminder that a lot of us think we know what kind of investor or time frame we're comfortable in, but but you know, it's it's always good doing a gut check on that because people say they're a long-term investor, but if you don't want to experience any short-term downdrafts um or loss, >> they they also say on average, people will say that they're willing to take a lot more risk than they can handle when when the risk is here. So even go back as recently as April during the tariff tantrum period all of a sudden the world's freaking out and you know people are down. So cryptocurrency is unique because the volatility is so big and when you look at all the prior patterns of bull markets when things are still going up it is not uncommon to have 15 20 30 plus percent drawd downs along an upward trending you know path. So that's just part of the territory but a lot of people in it are new. They're used to the stock market and when something loses a third of its value in the stock market, it might be dead for 10 years. Cryptocurrency is a different beast, but uh people have to be aware of that. >> Yeah. Yeah. It's important to explore all of that. Just a quick question. I think it applies probably to to to crypto. In my mind, I'm asking this more frequently now with gold. um ETFs an okay vehicle to express that through or do you prefer if you're able to put people into the actual uh gold commodity or the actual you know cryptocurrency on some kind of cold storage device or something. How are you feeling about that? >> Yeah, I mean on on the precious metal side, we clearly have a preference to own the metal itself because these days you don't have to take possession of it. you can hold it in a non-bank vault very safely. Um, one of the reasons for that that we didn't talk about back to gold and silver for a moment is the fact that if you really look at the market, there is a lot of data that there are ton of pe well what I'll call paper contracts for every ounce of let's use silver. And the data I've seen recently, and it varies by source, is well over 300 paper contracts for every ounce of silver. Most of those people with the paper contracts think they own it. Yes. Um, if there's ever a run on the metal, which we've seen a little bit the last week around some different countries, you could have a scenario where, you know, one person gets the ounce of silver, but 300 people think that's theirs. What can that do to price on the upside? So, our bias is always own it physically first and then use some ETFs and stuff for more convenient trading, but fill the bucket of precious metals physically. >> Um, cryp cryptocurrencies, it's a little different. We still personally have a bias towards owning the physical cryptocurrencies, but I think the ETFs that are out there have pretty clear um rules that they're owning that they actually own what they say they own. They own the Bitcoin and and it is easier. Cryptocurrencies are still an area where it's diff it's more difficult to get on these exchanges. And certainly when you start talking about private wallets and stuff, um, some of our clients do that, but but it's it's not something we actively do because of the complexity and risk. >> This October, Wealthian's putting the spotlight on silver with expert interviews, deep analysis, and a special in-depth report from our partners at SCP Resource Finance. To receive this report and other exclusive benefits, you can sign up to become an accredited investor with Wealthon at wealthon.com/acredited or by finding the link in the description below. Speaking of silver, Wealthon will be on the ground in Toronto for the SCP Resource Finance second global silver conference happening on Thursday, October 23rd. Legendary investor Eric Sprat headlines the event alongside 15 silver mining companies presenting their top projects. It's a must attend for anyone serious about investing in silver. Tickets both in person and virtual are now available. Find out more in the description below. Yeah. Yeah. Which is why I separated them, but um but excellent point. There's a lot of friction there still. Um but but there's also been a lot of scrutiny on the on the custody and and you know what they're backed by. So, um, great answer and and and we're going to be, you know, in the future, I think, talking more about just broadly as a as an investing community, more about what it means to own a hard asset, how you do that, how you want to express that. So, you can always go to over to wealthy.com to get more info on that. So, that brings us to what probably most people have an the highest exposure to, Brett, which is equities. >> That's right. That's right. And honestly, equities are perhaps the most dangerous on paper. And and the reason I say that is based on most measures of valuation, the S&P 500 is at all-time record high um for valuation. And you can look at things within that that give you a dangerous fact pattern such as it's never a healthy sign when one sector is dominating and pushing the whole index up. There's a concentration risk. That's been technology. So technology as a sector based on I'll use one measure price relative to sales. So relative to sales prices are almost 10 times sales. That's much higher than the 1999 tech bubble top. And what that's led to is a huge concentration of technology in the S&P 500. So the top 10 companies in the S&P 500 make up 39% of the S&P 500 index. So basically what we're saying is technolog is driving the whole S&P and 10 stocks are driving the whole tech sector within the S&P. So as long as those 10 keep performing that's great but they're at a record valuation. So that's a danger sign. You know most times in history when you see that it's a sign to derisk to be cautious. On the other hand no two markets are the same. And you know I think this AI story is still very early. Um, you know, we went from a year ago people playing around with a better search engine to now companies using it to do coding to a year or two from now, you know, if you believe some of the estimates, it will have uh a huge impact on society, whether good or bad, probably a little bit of both. And so there is great promise and leverage in a way. It's almost like the application layer of the internet. the internet connected us all and we're doing some useful things. Now we're adding intelligence to it and we can only imagine the future where you have humanoid robots that are a AI enabled and you know can have dialogue with people. I mean we're not so far from that. So in a way that is a a totally different future that we have to prepare for and I don't think that's fully priced in now. Maybe they've run ahead. Some of these stocks have run ahead of where they should be valuation wise today. But I think there are ways, you know, to be active in it. So, you know, again, what does that mean for investors? Everybody's got to make their their own determination. But I think for us, it's having a discipline that if you've got winners that have run way up, it might be time to consider, you know, bringing those back into alignment with with maybe a more comfortable level. >> Yeah. Which we know is so hard to do. By the way, as we're taping this, uh there was just a um an item of a program that ran on British television all about AI and at the very end they've revealed that the person presenting the program was AI was an AI >> um themselves. So, you're sort of getting a peak um for those who say it still has difficulties, but yeah, but we're getting little peaks of what's possible now. And I think that um it's it's equal parts exciting and scary. So um so that leaves us I I just this is the one I'm I'm really interested in and but this is not exhaustive. We all know there's lots of different way, you know, asset smaller asset classes and um alternative assets you can have in your portfolio, but we're just covering the biggest I think u areas of holdings and bonds to me seem the trickiest right now where we're sitting in this transition whether you believe it's a forth turning or not or but clearly with levels of debt, this seems a really hard one because it used to be the safe haven. It used to be our diversifier. How how do we need to think about bonds right now? And I'm specifically talking about uh government bonds, but feel free to wander into corporate area too if you want to. But h what how are you thinking about the role of bonds? >> Well, um let's start out with the positives for a moment. Um we're at least in an era where people are making some interest on their money, right? It wasn't that long ago was basically we were in a zero interest rate world or in an upside down world. In Europe, you were paying to give people your money, right? Pass that. So there there is some return to be had but um so the positive is there's some return to be had and things have been pretty stable. The the Fed has cut rates once so the the short end of the yield curve shorter duration bonds um have come down a bit but the long term is somewhat stable. So I'd say it's a stable outlook but unexciting. So, it's it's an okay place to park money in shorter term bonds, but we wouldn't reach out to longer term bonds for the reason that we talked about, which is earning a little bit of money, but are you making anything after tax and after inflation? The epicenter of the problem is going to be over time the bond market. That's what the whole world's struggling with. Who's going to keep buying all the US, not all the only the US government bonds, but European bonds, you know, go down the list. Most countries >> bonds, I mean, yeah. sovereign >> it's like paper coming out of you know a printing machine as fast as anybody can watch it. So it's a real dilemma. Now there are some potential answers like these stable coins that are developing and maybe the demand from those are part of the solution etc. But I think the people that are really concerned about the debt levels and the trajectory of all of this and the money printing would be most concerned about bonds. But I don't think it's time to panic just yet, at least in short-term bonds. So, and when you go beyond short-term bonds, the challenge is the opportunity sets kind of unexciting. >> So, the most extreme would be high yield corporate bonds or junk bonds, things that are well below investment grade. At prior recessions, when things really blew up going back to prior periods, maybe you'd get 10%, even 20% at the extreme, more than you would on a US Treasury. today. I believe that's around two or two and a half%. It's near a historical low. So, you're not really being compensated to go out on a risk curve and put your neck out there. So, I think bonds, short-term bonds are a place for liquidity and um you know, having some what we'd call dry powder for other opportunities, but it's not a very exciting area, you know, at the moment for us. >> Yeah. Uh so, great overview. Uh and and you're right, it's going to that's going to be sort of the really interesting spot to watch. Um and I think you you once again great analogy on the time frame, right? There's this larger picture which you know, but maybe indicate some trouble for bonds that we need to some big problems that need to be solved, but shorter term there are still uses and things that can happen in that shorter time frame that we need to keep in mind. Um so that idea of the push and pull and the gas and the break, I think is a great one. Uh so so with all this information, what's how are you thinking about strategy? What are you advising your clients? How what kind of framework should they be operating on? >> Yeah. Well, I think the first thing is to acknowledge this is a very difficult backdrop. Like we said, stock market all-time high. You had you had precious metals and cryptocurrencies that were undervalued. Now they've had huge runs, so they might still be a good place to be, but they're not cheap like they were. And the bond market's kind of uninspiring. So where do you put your money? You know, it's it's a balance. And of course, we talk about the stock market as if it's one thing, but there are many cheap sectors, many areas of opportunity. Um, I think one of the biggest things we're guiding people on and and it should be in everybody's kind of mind is you should have a range that you're comfortable with around an allocation to something. And when it runs well above it, you should look to pull it back and rebalance. I think a lot of, you know, that's what advisers tend to do. A lot of individual investors tend not to. They just let things drift. The winners win until they get clobbered. And so taking a look at a portfolio, having an idea of what a reasonable or appropriate range for someone's risk tolerance is, and then actually taking action and pulling it back when it's warranted. It would be one piece of the puzzle. Um I think some patience you know we're also beyond all the things we talked about the mixed environment we're also bombarded in this world with and I find it especially in the financial industry it used to be you know you get the Wall Street Journal and you'd read stuff and you get some updates now it's on X you're getting real time to the minute any platform it's so quick so changing and it almost creates this mindset where everybody wants to be a trader and act and do something about it that is the tendency that's how this frequent data pushes you in that direction of wanting to do it. But you've got to rein yourself in and remember in most cases people are still investing for 20 30 40 50 plus years and you can't let yourself get whipsawed around by all the news events. So a little bit of patience and in a market like this I'd say no big bets like you know don't don't bet the farm on any one outcome. There are some strong counter forces and investing is all about probabilities. Nobody's got a perfect crystal ball. So I think you know balance things out invest where you have some conviction but this is not a market to take undue risk. Um >> and how can we think about protection too? I think that >> you know there's been a shift about just focusing on gains but also with the nervousness on and the uncertainty people trying to think about you know how do I protect what I what I've created or protect my nest egg or the gains that I've worked so hard to get. How do we think about that? I think there's a couple things. First is what we said, rebalance. You know, don't let your risk get way well beyond what you're comfortable with. That would be one. Two, look for signs of euphoria. If you see kind of euphoric behavior in any of these markets, like if we have a traditional fourth quarter rally and things go way up, I don't know if we will or we won't, but we've had that before. Um, that might be a moment to be like, "Wow, okay, I I was already a little over my skis and risk and now things are way up and everybody's excited. It's kind of reverse psychology. When everybody else is really excited, sometimes you've got to pull the reinss back, right? When everybody's concerned, you've got to swoop in. There are several investment strategies we employ at different times to also hedge. That can include you can keep your investments and you can buy protection put options or other things to take away kind of the most severe outcomes, you know, if you're concerned about that. There are also strategies within equities that are more of people refer to sometimes as hedge fund strategies, but it could be long short where there are strategies that might own some stocks and short others and say they're kind of neutral to what the stock market does. It's more about how the individual stocks perform. And then finally, um, at some point there we might see a big rotation back to some of the unloved kind of value names in the equity markets. It's been a growth technologydriven market. It was going into the tech bubble as well. On the other side of that was a long period of kind of the boring value stocks reasserting themselves. So at some point, especially if we see euphoria first in technology, there might be those opportunities to think about as a way of uh kind of relative de-risking, let's call it. >> Yeah. And one of the one of the narratives I love which we don't know if this will play out but is the idea that as AI snakes its way into the economy some of those more traditional value type companies will really be able to optimize it and we might see um you know the sort of AI story drift that way which is going to be interesting to watch. Brett you gave us thank you so much. This was such a wonderful conversation and I think gave us a great framework um of questions to ask ourselves as we especially as we're going into year end. It's such a good time to sort of do that housekeeping. Um, and we're going to continue to try to focus people's minds there. So, thank you so much. So, appreciate it. >> Great chatting with you. >> Uh, if you would like some more information about anything we discussed or to explore some of the strategies, you can get a free portfolio review from the Windrock team. Just hit the link in the description or head over to wealth.comfree. Thanks so much for watching. We'll see you again next time.