'Highly Likely' We'll See A True Bear Market In 2026 | New Harbor Financial

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I don't know. I think there's a a very good chance we get um you know very very very significant turmoil next year. Would not at all be surprised to see markets down or or barely up. Um you know but the ride along the way I think it's highly likely we see you know a true true bare market. You know if you use 20% as as the metric I think it's you know quite likely we see a pretty sizable draw down next year. [music] Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert, welcoming you here for a special uh end of the year recap with the team at New Harbor Financial, one of the endorsed financial advisory firms by Thoughtful Money. I'm joined as usual by lead partners John Lodra and Mike Preston. Gentlemen, how are you? We're interviewing we're recording this interview right before Christmas Eve. So, let me start just by wishing you both a very merry Christmas. even though this will be running after Christmas. Hope you have a great Christmas too, Adam. And here we are on Christmas Eve. And yes, I know your viewers will see this after Christmas, but you know, certainly looking at the market, the market has uh delivered holiday cheer, hitting a a new all-time high here today on the day before Christmas. And this is a shortened holiday day as well. And so, um, hopefully this continues for some time. We'll see. We'll talk about it today. Madam, I'll just add my Christmas wishes to you and your family and your viewers. I'm uh joyed to see that we have a white Christmas here outside my window here in Massachusetts and just makes for a nice little twist to a a special holiday for for a lot of people, including my family. >> All right. Well, that's that's very nice. Uh I'm we're back in California visiting my wife's family for the holidays. We're having a very wet Christmas here. Um, probably part of the reason why you can hear from my voice, uh, I am a bit under the weather here. I'll apologize in advance, folks. I'm going to lean hard on John and Mike in this discussion, um, because, uh, my head feels like it's, uh, filled, uh, completely with cotton. Um, except for the like 100 gorillas with sledgehammers that are trying to bash their way out of my brain. Um, so yeah, this flu I've got I just tested last night. I've got the the influenza A strain, I guess. Um, and I'll just tell you folks, it's not as fun as it looks. So, if you can avoid it, I would I would recommend you do so. But anyways, on to more fun topics. Um, so Mike, as you said, um, looks like Santa has arrived on Wall Street. We're getting a Santa Claus rally. The S&P is at a record, I think, pretty much as we speak here. Um, as are the precious metals, which we'll talk about in just a moment as well. Um it's been another hell of a year for the markets. Um we've had uh two 20 plus% returns in 23 and 24. Pretty pretty improbable to have another really big upyear in in for the third year in 2025, but that seems to be what the market has now delivered. Uh looks like it's going to be close to what like a 18% return or so for the year. Um, so, uh, I I guess why don't you tell me about, uh, you know, what indicators you guys are looking at? Um, is this kind of giving you guys the green light going into 2026? I wouldn't, um, I wouldn't say get too excited here. I mean, our our suite of indicators are solidly bullish. They're in the green zone and we're starting to see some broadening out. But I'm going to share some charts here so we can take a look at a number of the different indicators or at least at least a number of the different charts. So that should be up now. This is the S&P 500 and as I mentioned, we hit a new all-time high. So there's the new all-time high as of right now, 6937. But actually before the last couple days, you could go back to late October, we essentially went nowhere for about two months and here, just the last couple days, we eaked out a new all-time high. Not that much to get excited about other than it is an all-time high. And don't forget, there's still a few days left in the year. So even though we're up 18% or so, as you stated, who knows where we're going to be at the close on December 31st. And another thing we've noticed is that we started to see a broadening in the market. So, if I change the symbol here and we start to look at the equal weighted S&P 500, we can see that we had about 2 weeks ago, we hit a new all-time high. So, here's a broadening. Now, it's done some backing and filling here the last week. Not at a new all-time high today. How about the Russell 2000? The Russell 2000, same thing. We're broadening out. These are good signs for a broader rally. And it immediately backed and filled. The NASDAQ is not at a new all-time high today. still struggling about um you know maybe a percent or two above below an all-time high. So what is this really saying? You know we got to take a look at what the indexes indices are actually doing and combine that with our bullish indicators which you know you have to be careful. You don't ever know what the immediate future's going to bring. But now that we're back above the 50-day moving average, we've successfully tested that 50 and 50 is the is the red one and the light blue is a 21-day moving average and we're at an all-time high. There's a much higher probability that we're going to get a squeeze to new highs. And so if I went to weekly, you can see that we're basically we went nowhere for 2 months as I just said and now we're coming out of that base that could be a launch pad well up into the 7,000s. So everything really you need to think about the risk control, but if we had to guess, I think we're going to get a squeeze higher here in the next few months. And so we're not trading aggressively from that perspective. I'll stop sharing. We are nudging up our equity exposure just a little bit. We were at 45% equities. We just increased it to 47.5, increased it by 2 and a half. We have very few covered calls or hedges at this point. uh if we get more extended, if we start to go vertical, we'll start to add, I think, some more hedges, particularly covered calls. We may even reduce equity into that ramp depending upon what the other ind the other indicators are saying. But for right now, it is green light and you have to be careful about getting too aggressive because, you know, the macro and the valuation says that we could easily, you know, be a lot lower than this in the market. We just don't know when that that turn is going to come. So number one goal here is to try to make returns for our clients but not give back much on the turn and that's what we're trying to do right now that the the arrow is pointed up. >> Okay. So despite your concerns about valuations or whatnot and we've long talked about how while they're a good indicator of risk, they're a bad indicator of timing. Um you are becoming more optimistic in the near term about where things might head. >> That's true. It's probably a warning sign. So, you know, for your viewers, I mean, they may think that, you know, hey, New Harbor is getting more bullish here, and maybe that's a contrarian signal. Maybe it is, but just remember that what we're talking about here is very modest. Like I said, going from 45 to 47.5 is not a big move. And we have the discipline on the downside. A lot of people are passively long this market. Those are the ones we worry about. If we start to go down and take out our stops, we'll retreat pretty quickly. So, we have an active strategy versus a passive strategy. And I'm just saying that the the stars are starting to align um to a condition where we could easily get a squeeze higher. And like I've said before, I think on this program, watch for something like 500 S&P points up in a short period of time, two [snorts] or 3 weeks. I think that'll tell us that we're real close to the end and that the blowoff is here. That's only one of many scenarios right now. I'm guessing based on the broadening that we might be building this blowoff and and again if we get that big up move that's not a reason to jump in that's a reason to get more defensive and we'll be talking about it here. >> Okay. And I'm glad you mentioned that. So you you have for a while now uh I don't I want to say predicted but but you've said your expectation is that wouldn't surprise you if this large bull rally that we've been having would end in a in a in a blowoff top like that and then that would be a high point obviously and then you think that there could be a quite material correction that could follow. We're not seeing the blowoff top yet but you're basically vigilant for it I guess is what I'm taking. the the the variables are starting to align for it is what I'm saying, you know, and and it certainly hasn't started yet. Again, the some of this is guesswork because nobody knows the future, but it really has to do with the time that that I've had in my career since 1999 that this bubble's been going this whole time. And every little correction has been cor has been rescued with more money printing. And the only thing that's really making sense now at this point um is some kind of blowoff top. Again, we're not trading from that perspective. We're not relying on that. But that's what it's looking like right now. And and if I had to quantify this guessing, like I said, look for 500 S&P points up in like 2 weeks. That would be like 5 to 8% in a couple weeks time. If that happens, that doesn't mark the top either, but that means that that theory is right. And it means be careful because that means we're in the final moves. So that's again, I don't want people to go more in. And I want them to actually start thinking about pulling out if that happens. >> Right. Right. And so we'll have you guys obviously on this channel weekly as usual going forward from here. So if indeed we start seeing that type of price movement, you can flag it in real time for folks. >> We'll do. >> So John, heading over to you. Um so as Mike said, uh you know, in the near term, sounds like you guys are getting more comfortable with um you know, opportunity in the market. You've increased your equity exposure a little bit. your indicators as Mike said are pretty green. Um [clears throat] so uh Mike also mentioned uh that the breadth of the market seems to be increasing. Again those are healthier signs. So um as you look into 2026 what do you see is driving the markets? Is it is it going to be more just the hyperscalers again or you know are you expecting to see capital rotate more into the other parts of the market that have been a little less loved in the past year or two? Yeah, that's a great question, Adam. And in a word, we we do think there'll be rotation. In fact, we're seeing it. We've seen some pretty um you know, notable rotation underneath the hood of the market. And you know, we we as much as anybody are guilty of talking about the market as if the S&P 500 is the market. And you know, what it does is is what the destiny of investors uh is. Uh but that's not really the case. And and perhaps I can just by way of illustration share one of our dashboards. This is just one of many tools we look at. But this is a um a sector relative strength um kind of uh dashboard if you will. And just some quick um quick deciphering this for for viewers. You have the various uh stock sectors across the top here. Technology all the way to consumer non-yclical. Got I've got this sorted by weekly going back a couple years. And the simple kind of way to read this is you know the the green it's this is a relative strength screen. It's a systematic measuring of price action of every sector and constituents of that sector relative to others. And by and large, you want to look at folks, you know, sectors that are in leadership and have momentum and trending. So you have, for example, on the right hand, technology, communication services, industrial, basic, materials, financials, and at the lower end, you have some of these sectors. Now, what you see is these these don't statically hold position. In fact, they rotate. And these numbers in in the the the bubbles there are meaningful. They're they're what we call a tally count, the signal of the the strength of the signal, if you will. So, a couple notable things. So, for example, look at basic materials. Mike mentioned that we just added a slight bit more equity exposure. We didn't add that to the S&P 500. We added to a global basic materials, specifically metals and mining. You know, even within these sectors, you can look at subsectors and much of the strength. You see these tally counts have consistently improved for basic materials. This is things like uh copper and and steel miners uh base metals. Uh it also includes chemicals and things like that. But even within this sector, the real strength is in the kind of metals and mining. And we're not talking about gold miners here. This is a totally different, you know, kind of more base metals. And that's actually where we added some some recent exposure. Look on the other hand, you see financials, while they're still, you know, still in a pretty good relative strength position, the s strength of that signal has been consistently weakening. We actually rotated out of some targeted financial exposure a couple weeks ago in favor of rotating into some basic materials and we actually did add some healthcare exposure too that that you can see is even though it's still in a longer term sense still catching up from a relative strength standpoint in the near term there's been some very significant improvement. So these are the kinds of things that we routinely look at and and monitor for. You can have a market that languishes or or goes nowhere, but you can have some very stealth, you know, positive developments underneath the hood that you want to be looking for. Energy, for example, you know, did if we go back to 2022, the last bare market in the uh real bare market in the stock market, energy was one of the bright spots, you know, bright green, just to to pick the color here. And energy actually did quite well in 2022 when when most other sectors, including technology over here, languished quite bad. Energy has been a lagard for much much of the last couple years until recently we've seen some pretty strong strength and even within that sector the oil and gas services companies have been much stronger than for example the producers or exploration type companies. So those are the kinds of uh subsurface rotations that we are not only seeing but we expect to play out further as we head into into the new year. technology has been losing some strength. And so I I I absolutely do think there's probably a good chance that we see the the hyperscalers become yesterday's news a bit and and other things start to pick up the slack and probably stealthily. It probably won't be on the headlines, but we'll see it in some of these, you know, kind of systematic indicators that we follow every day. >> All right, so let's talk about that. So, [clears throat] um, we don't know exactly what's going to happen, but let's say you're right there and that the hyperscalers become yesterday's news. Um, they have been driving the markets so much for the past several years. Can they become yesterday's news without cratering the markets? you know, is there a way for them to to to gracefully cool off and hand the baton to other sectors to keep powering the S&P even higher or is so much of the S&P and of course even more so of the NASDAQ uh dependent on those very few stocks that if they correct by any you know meaningful amount uh it drags a huge chunk of the market down with them. >> Yeah, that's simple arithmetic arithmetic. If if we do see these very large cap hyperscaler companies start to to really you know weaken the mathematics are are pretty simple. You know a typical S&P index fund which is uh cap weighted we'll see that weakness. Now take that same cap weighted index and equal weight it uh so those companies have much less influ influence. Um you could have the equal weighted S&P do do relatively fine even if the cap weighted is languishing if if those do in fact start to weaken. But, you know, um you might see small caps start to pick up more. Um you know, just because the S&P 500 cap weighted may may see some heaviness if these hyperscalers start to, you know, lose some allure doesn't mean that it's uh everything goes to, you know, you know, crap, so to speak. But, you know, you want you want to be very selective and systematic in picking and and there are there are plenty of sectors out there that, you know, I don't think will be immune from a major market selloff, but they are much more uh kind valuations. You know, I talked about the global um metals and mining exposure we just added. You look at that sector, it's gone nowhere more or less. It's been strong recently, but last uh you know, since 2010, it's more or less gone nowhere in terms of action. So, there's plenty of, you know, areas that are are not uh over hot or, you know, over overly bubble-l like >> don't have the froth. Yeah. >> Yeah. You just want to be very selective and and broadly speaking, especially for passive investors, you want to greatly reduce your equity exposure. I we we very much think that we're getting very close even and as Mike mentioned, a a blowoff top here is going to be certainly in our minds a not just an invitation, but a but a almost a mandate for prudent investors to to derisk. Uh just by way of uh mentioning something that just came across my screen. Uh the investment firm Paulo just did a a little study a couple days ago and they basically said, you know, someone that invested in a 60% stock, 40% bond portfolio back in 2019 and and basically just closed their eyes and held it passively till today, that would look more like an 80% uh stock, 20% bond portfolio. Now, I'll remind folks that that not only is that, you know, more heavily weighted to stocks that many people want to be if that's was their initial mandate. Um, it's at a time when the US stock market, broadly speaking, has never been as richly valued as it as it is now. Now, that doesn't mean that that valuation has to matter today or tomorrow, but it matters. It will matter. We we are highly confident in in the kind of time frames that most retirees rely on their portfolios to be safe and sound for. And um that that's just another way of saying we urge folks that maybe are a little bit um you know um displugged from their portfolios to take a good hard look. Use use this changing of the year as as a cleaning of house so to speak and and making sure your portfolio is uh is properly positioned because we we do have risk out there in spades and you know valuations being the the most dramatic of of that. So, John, just just asking you to, you know, cast your eyes on the year ahead. [clears throat] What do you what is New Harbor sort of default expectation for 2026? You know, I mentioned earlier that that we've had three now backtoback strong double digit return years, which is statistically a barren in and of itself for the market. um a fourth while possible um statistically speaking isn't probable. Um and I know you guys at New Harbor have had lots of concerns about both the economy and valuations in the market and whatnot. Um what's your default assumption for this year? Is it going to be more of a flat year, another up year or more of a down year? >> Yeah. Yeah. Well, so so some of those simp simple statistical uh metrics that you just mentioned there, you know, x number of posit positive years, you know, unlikely to, you know, c certainly those weigh into some some some framing of of what's likely ahead. Um there's there's always the possibility for those trends to get upsetted and you know, we don't put too much weight on those simple stats, but you know, combine record valuations, you you combine the extension. You know, we as Mike has already alluded, we we see the ingredients for kind of a a blowoff top of kind of thing. Um, you know, there's sentiment indicators that are getting a little extreme in terms of positioning and things like that. Uh, back that up with, you know, a a monetary and fiscal environment that, uh, has suddenly become very accommodative again in words and deeds. You know, the Fed has started to expand its balance sheet again. Um, people will pick semantics that this is or is not quantitative easing. Quite simple. It's it's stimulus uh in our view and it is quantitative easing in the sense that it's printing money um figuratively speaking not literal printing presses but you know these aren't paying being paid for by base dollars already in circulation. It's an expansion of the monetary base to to buy those Treasury bills and this, you know, uh they're framing it as a reserve support, you know, a measured not true quantitative easing. That's just semantics. And then you've got, you know, the whole drama about who the Fed chair is going to be and the the oneupping uh of the candidates to to who's going to be more doubbish, who's going to be more, you know, supportive of interest rate cuts. Um, yesterday President Trump put a put a post out on True Social that, you know, if you read it word for word, it's like they're going to run this thing hot hot hotter than you can imagine in terms of, you know, throwing everything in the kitchen sink at it. And who knows what that means for inflation and stuff like that. You know, we're not that smart. We'll let we'll let the market tell us, you know, what what what the market thinks of that. But um this has very much the markings of probably um you know uh some strength into early next year but but an invitation to sell and you know we're not we're not really good because it's not within our framework to say hey you know next year is going to be x% here's our target for the the market next year take this year for example many people will will conveniently forget that in April we were technically registering a bare market in the stock market who would have thought right so the ride the path of of how things play out over time is as important if not more important than the end result because uh you know the psychology especially for folks that aren't working anymore. they're they're relying on their portfolio for their retirement security. That ride has as much if not more importance than the actual return number that that we see at the end of the year, which is just an arbitrary day of the year, the calendar year. And so, I think there's a a very good chance we get um you know, very very very significant turmoil next year. Would not at all be surprised to see markets down or or barely up. Um, you know, but the ride along the way, I think it's highly likely we see, you know, a true true bare market. You know, if you use 20% as as the metric, I think it's, you know, quite likely we see a pretty sizable draw down next year. >> Okay. Um, so you you've mentioned a couple times, John, uh, you guys are active managers, you know, uh, a passive approach, um, which maybe did fine, you know, over the past decade or two. Um, we've talked about this a lot, may not be the right approach going forward from here. Sounds like you think, uh, just sort of like 2025 was, I mean, to your point, right? Um, if I told you the beginning of the year where we'd end up, you'd say, "Oh, well then this this must have been a really fun year." Well, no. It was, you know, pretty gut-wrenching in the first third of the year, right? So, this year had a lot more volatility than the the previous two years. Um, sounds like you think that there's going to be more volatility ahead from here and that the set it forget it crowd um may uh you know they might be setting themselves up for disappointment and therefore a more active approach going forward for for a year like 2026 is probably better order. >> I think that's exactly the way we see it. um you know, Fed chair, come, new Fed chair, midterm elections. There whole host of catalysts you might point to and doesn't matter which which spark, but there there will likely be plenty of sparks to to join a concert of of other, you know, concerns, valuations, and extensions of certain sectors. You know, we think there's high likelihood it's not going to be a, you know, sit back and enjoy the ride kind of year. >> Okay. Um All right. Uh so, Mike, let's let's head over to you. So, one of the things that has been a standout of 2025, um, you know, we had the hyperscalers and they continued to get, uh, bigger and more essential to to driving the market. Um, but also the precious metals um, really finally came into their own. You had been, um, I want to again give you props for telling people, you know, you you were showing the charts at the beginning of the year. you're saying, "Look, I think I think the metals are coiling here. I think they've got some good upside." Um, and the breakouts that you anticipated indeed happened, and I'm going to say they happened even more violently than than you expected. Um, so love to get your thoughts just in general on on, you know, what's happening in the precious metals complex right now. Uh, the day we're talking, I think both gold and silver are at all-time highs. Uh just check silver futures are at $72 an ounce which is crazy uh sounds crazy hearing those words come out of my mouth. Um but [clears throat] the key question for you Mike is as as wonderfully as they have performed uh this year um do you expect that momentum to continue over into 2026 or have they just gotten ahead of themselves and 2026 maybe more of a cooling off year? Well, let me try to respond to that in in a brief way, Adam. And and you're right. The move in silver and to a lesser extent, gold has has surprised me, has surprised us. Um there's nothing preient about what we were talking about back then. The metals were coiling. We've been long believers in real assets. the whole debasement trade, the fact that we think we're entering a climax of a fourth turning and we can see that the central banks have been all in over these last 10-15 years really had us convinced that metals made sense and metals were in this long consolidation which was painful for the bulls. We had the high back in 2011 and gold lost 40% over the next few years and didn't hit a new high I don't think until about 10 years later. So, let me show a weekly chart of silver. And so, this has been really great for us, our clients, and anyone that's believed in this trade has really worked out great. And frankly, it's exceeded my expectations, like you said. So, here, this vertical dotted line is the beginning of 2025. This horizontal red line is what we call the triple top over and over again on this program. This is SLV. So, this is going to be a little bit off the spot price. This is about oh, I don't know, five or $6 below the spot price, but the the the spot price and this are the shape of the curve is the same. We talked over and over about a potential triple top at 35 right here. 1 2 3 and on that break, we added a small position to our portfolio. We talked about it here. It's been a much bigger root move than we thought. I mean, silver is saying something is is different. I don't think this is your average parabola or or you know your average kind of blowoff parabolic move in commodities which often happens. And I don't think this is at all like 2011. In 2011 we hit $50 an ounce and we pretty quickly collapsed from there. Here we hit $50 an ounce and we just kept going. And so again the triple top breakout at 35, we went up, we consolidated for the next two months, created this triangle right here. And we were saying, "Look, this thing looks like it's coiling." And lo and behold, boom, the next three months straight up brought us right up to $50 an ounce. That's the old high. And look what happened. We consolidated for about 8 weeks. And the last five weeks have just been breathtaking, Adam. You know, we just came out of that $50 range and went straight up to 72, as you said. So, the question is, what now? Well, shoot. I don't know. I mean, this this trade is getting a little bit hot. A lot of people are talking about it. It's all over Twitter. It's all over the internet. But I don't think I would just say that that's a good reason to get out. I think this is a good reason to evaluate your position and to sell on the way up. I've been telling people, we've been telling people to sell back here and here and here, here, all the way up. And a lot of people are really overconentrated. And when I say overconentrated, if you're north of 20 to 25% in metals, you you really should start thinking about selling into this rally. I don't think we're going to collapse. In fact, I think I think gold and silver are going higher. I think go silver will probably break 100 in the next couple of years, maybe sooner, and I think gold will probably top 5,000, but that's not a reason to not take some of these gains. So, we have five straight up weeks here. The trade is getting a little bit crowded, so just think about taking some off the table. Gold looks similar. Let me just take a look at gold or show you gold on a weekly chart. triangle consolidation up triangle. All these triangles build energy and usually they break into into into the direction of the prevailing trend. Not always, but that's what's been happening. Gold is here at another high right along with silver. I should say one thing about the gold silver ratio. I think I've got the chart up here. Let me share it. This is from stockcharts.com. So if you type in gold silver, this goes back to I guess just the beginning of the year. But back in liberation day, uh we were talking on this program like shoot up at 102 on the gold silver ratio again, you know, and and since that time we came down to 60 62.76 as of right now. So we're starting to see a more normalized ratio. We [snorts] could have some argument or some discussion about what a what a long-term average is, but by my eye, it's somewhere around 50 over the last 20 years or so. So, I mean, that might have some room to compress back down towards 60, but it's starting to get more normalized, which is again supporting my idea that you should start selling some into this rally. And one thing I see with a lot of gold bugs, so to speak, which is I guess includes us to some extent, is they don't ever want to sell. I'm going to bring up some some mining charts, and we'll talk about that as we finish. They don't ever want to sell, but if you don't ever sell, then it becomes kind of pointless to do it. You're kind of sitting around waiting for Armageddon and, you know, just waiting to pass on the metal to the next generation. If that metal is now 25, 35, 50% of your net worth, which it is for a lot of people we talk to, start thinking about some reason to sell some of it. And it's often hard for people. I had conversations this week. It's hard because they don't know what to do with the money and they don't want to go back into dollars, >> right? [snorts] >> You know, all I can say is think about something real to do with it. You know, do something with your house, go on a trip, whatever. Let's take a quick look at the miners. The miners have had huge moves. Here's here's GDXJ. Here's GDX and SIL. SILJ. They've all had monster moves. You know, some might say that the miners, particularly in silver, are starting to lag a little bit in recent weeks. I don't know. It's almost like the market doesn't believe that silver is going to stay up here at 65 or 70. Uh I think it might. And if it does, I think we're going to start to see the miners, particularly in in the silver area, catch up a little bit. So, >> demand say that. Do do you sense this is like a like a consolidation of coiling like we've seen the metals do? >> I think so. Let me go to the daily chart here of this is SIL, the silver miners ETF. You can see that we've kind of been going sideways for three days. Let me look at the juniors with you here and then compare it to the metal. The juniors have been going sideways for a few days. They've roughly um you know we're up about what is that about eight about 20% in the last month or so. I haven't prepared a chart but that is about the same I think as the metal's been up but take a look at at SIJ here just going sideways and then compare that to silver and silver in the last three days has been going straight up. So some people are short-term saying what's going on here? Are the miners suggesting that we're at a top? Is the market not believing the silver will stick? I have no idea. And making short-term predictions like that's dangerous. And it's all over Twitter. If you look there, a lot of people are saying, "Well, geez, the miners are suggesting a top in silver." I don't really want to play that game because as likely as that could be, it's equally likely that the opposite might happen that we might actually see silver miners catch up and launch out of here. If you look at SILJ for instance, you take this base right here. This is the cup and handle base. The cups here, the handle's here, and you see that we've got around uh what's the depth of this thing from 21 to 26 anyway, maybe even 27. So that's five or six points. If you add five or six points onto this, you're up at around 32. That's the next reasonable target for SIJ, for instance. And it's probably going a lot higher as long as silver doesn't collapse. So they'll stop sharing now. Nothing in the market is easy, but all of these indicators point higher. I believe the miners in general will continue to outperform. And that's in in general what our indicators say, particularly in the gold space. The miners are outperforming the metal. And u be careful calling it top. I've learned that you can't really call it top. All you can do is sell on the way up if you're already in it. And that's what we're telling people to do. >> Okay. And on that point, like [clears throat] um to the folks who've been accumulating physical ounces. So let's say they're of the mindset of I don't really want to sell those ounces, Mike. Um I plan to hold them for years, decades, right? Um >> Mhm. >> Uh and and yes, you know, silver could correct, you know, from here and maybe has a down year next year, whatever. But I feel like in five years it's going to be a lot higher. In 101 15 years it's going to be a lot higher. So how what would you recommend those people do to hedge? Right. If they don't want to sell their ounces but they don't want to just be sort of naked long their position. The first thing I would do is I was I would challenge their statement that they don't want to sell their ounces because that's part of the problem sometimes is they just don't ever want to part with that gold or silver and they should start to think about some of that. I've had a bunch of conversations this week and I can think about three in in particular that I actually helped them sell some of those ounces. But if they absolutely definitely don't want to sell those ounces, I would review with them what portion of their investable assets are those ounces. If they're north of 20 to 25%, then that gets into the slightly heavy position because we've long said 5 to 10% is what you should have in your investment account. But if you think about it, we've been saying that for a lot of years, and those people that took our advice might actually be at 20 or 25 or even 30% now, depending upon how the rest of their investment assets have produced. So, we we want to challenge that notion that they don't want to sell. But if they literally absolutely don't want to sell, it's a tough one, Adam, because the only real way around that, I think, is to use inverse ETFs, which I really don't like, particularly the leverage ones, uh, or options, you know. So, if, you know, I guess if they wanted to use an inverse ETF, I would I would tell them to definitely don't use an an leverage one. Use a non-leveraged one. [snorts] you know, that might go short the miners to offset some of your position or short the metal or we can talk to people about how to use options. The thing about options is it's buying insurance and it's expensive. So, literally just buying puts on gold or silver is something we can talk to people about, but it's going to cost money. And so, if you don't want to sell, which is what you really should do, that's the cheaper, easier thing to do. we would talk to you about buying puts and and we're we're happy to have a one-on-one conversation with anybody about how to do that. I just have to look at it as buying homeowners insurance or something like that because it's going to cost some money to do it. >> Okay. And and so thank you. You took it where I thought you would and I appreciate you offering to help walk viewers through it who might be interested in learning how to potentially do this. Um, so rightly or wrongly, you know, whether the for the folks that just don't want to give up their physical ounces but do want to have some downside protection. Yeah, you can buy some you can use a hedge like buying a put and it doesn't even necessarily have to be on the metal itself. It could be on the mining complex which in theory should be levered to the price direction of the metals themselves, right? Um, and uh, as you know, you guys have done great work over the years with me educating people on the basics of options, but I think the key thing to underscore there is if you haven't really used them yourself um, to the point where you're pretty fasile with them, rather than figure this out on the fly on your own and risk making all of the rookie mistakes, um, if you're thinking about hedging using options, um, get the guidance of a good professional financial adviser who is very well skilled in them and leverage their expertise uh on this. But to your point, Mike, about buying, you know, the insurance, you know, it's like you buy fire insurance on your home, you're thrilled that you don't need to use it, right? You're you're happy to spend that money and not need it, right? So, uh if you're thinking, hey, look, silver at 72, for example, it just seems it's moved so far so fast. I, you know, I'm worried about a snapback. Well, you buy some insurance against that. If the snapback doesn't happen, well then you're enjoying all those gains of your silver having run up to $72 an ounce, right? But if it does, if silver drops into the 50s, you're all of a sudden super glad that you bought that that insurance. So anyways, folks, if uh if this is something you might want to learn a little bit more about, talk to your financial adviser or if you don't have a good one to talk to, feel free to talk to John and Mike directly and I'll remind you how to do that at the end of this uh video. John, [clears throat] coming back to you. Um, so you know, we're we're talking about, you know, in this case with the precious metals, how to how to keep the gains that you've had. Um, you know, the investing game kind of follows a progression, right? First you got to earn the money, then you got to then you got to save it, right? You got to get to put it to work by investing it. Then you got to grow it, right? Um, this year, you know, a lot of people were able to grow it, right? they they whether you were in the hyperscalers on the risk on side or whether you were in the precious metals on the riskoff side like you you had some great gains. So now you're in the keep it phase, right? How do I how do I not let this windfall kind of slip through my fingers? >> Um uh talk for a moment just about how you guys as a financial adviser help people think through that and then I want to ask you both about the last phase of of capital which is using it. You know, we spend so much time trying to figure out how to make the number go up on our on our investment balances, but that's not the end game. The end game isn't to die with the biggest number. The end game is to actually use that money for quality of life. So, we'll get to there, but but first, can you just talk about helping people on the keep it? Hey, I've I've I've gotten some great gains. How do I not screw it up? >> Yeah. Well, so first of all, even though the this year's returns across many asset classes have been quite quite nice, that doesn't mean every investor has enjoyed those. In fact, we've talked to plenty of folks who got scared out of the market in April because they were over overextended. They were overinvested in the market to begin with. And when we saw all the scariness about uh liberation day and the market selloff, some people ran for the hills and u you know were were feeling this u you know sting of of getting shaken out and and there combination of two things panicking but also being more heavily invested than they probably should have been in the first place. So that's the first thing you know psychology is by far the hardest ingredient in this whole thing. markets are hard enough, but throw in human psychology makes it, you know, infinitely more difficult. Um, so yeah, the the keeping it well, first of all is they're smart. Well, reminding folks that this money is there for them to use, right? We one of the privileges we get, you know, you know, we're we're very hands-on managers, but we're not sitting behind a computer screen showing up on CNBC making market prognostications. We're talking to real people. We get the we get a a privilege of talking to them about really personal things about their life. Sometimes they're joyous things, sometimes they're challenging things. And u you know we um we in some ways serve the role of a counselor. And I don't want to you know I want to be humble in using that that's a very very u esteemed role or title to to to bestow on on oneself. But yeah, a lot of times we're talking about the the human aspect of of their assets. And um you know um it's as simple sometimes as reminding folks that it's okay to book some gains. It's okay to pay some taxes. Um it's it's it's better than losing those gains and and so what if you pay some taxes? Your your your money is enabling you to do the things in your life that you you want to do or should be able to do. Um so it's it's it's a combination of that. It's it's uh helping them understand that um you know they've already got a many of our clients have have built a very sound financial footing. It's okay to say I don't need to get the the very top of a of a blowoff top market if that's what's going to happen. You should not feel ashamed if you you know lean in a little more conservatively if if you feel like your your biggest concern is is you know incurring big losses because the economics of loss are unforgiving. You know people forget that simple math. You lose 10%. No one wants to lose 10%. I can tell you even years where we've been down small single digits it still hurts. you know, people are they don't like to see understandably their accounts be down. Um, but you know, so long as those declines are are shallow, they're very easy to come come back from without herculean efforts. You know, 10% draw down requires an 11% subsequent return to get back to even. Take that number up to 50% draw down, you need a you need a 100% subsequent return. That's simple math that people sometimes fail to remember. So, the math is easy. The hard part is the psychology. So a big part about what we do is reminding folks that you know your return over the next three months is not what matters. It's what happens over this the cycle of your lifetime frankly. And mitigating or or or diminishing the amount of downside for most people especially in their retirement years is as important if not way more so than you know getting the maximum upside. And that's a that's a analytical experiment but it's also psychological one. Uh, so we we try to weave those two things together to help clients be, you know, unstuck, if you will, when it comes to that. >> Okay. All right. Well, look, I mean, I I I I've talked a lot about this in the past, so I won't I won't continue to hammer it too much here, but, you know, the the discipline that working with a good financial advisor brings the average investor um is is super valuable. Um, and a lot of times it's the unsexy stuff, right, as you're saying there, John, right? I mean, it's just the rebalancing. Um, it's it's just the things that, you know, it's the person to say, "Hey, look, I know you don't want to pay taxes on these gains, but be fortunate you have the gains and, you know, lock some of these gains in because gains on paper don't necessarily always stay gains, right? Um, so you want to take some of these unrealized gains and make them realized ones to make sure you actually get the benefit from them. So that and also just having a process and a structure that often times removes the um emotional um wanging around that that our our human brains do do with us. So anyways again thank you and kudos to you for all the work that you've done over the years for the many uh you know the many many clients that have sent over to you guys over the years. Um all right so [clears throat] just to just to kind of bring this conversation to a a meaningful and I think a a really practical close. So, we're we're having this discussion. Uh it's Christmas time. Uh hopefully hours after you guys get off this interview with me, you know, you're going to be sitting down at a table with your loved ones and really experiencing what true wealth is, right? And I talk a lot in this program about how money is a means to true wealth. It's not true wealth in and of itself. And true wealth really boils down pretty simply to quality relationships, living with purpose, and having good health. And you know, right now I've got this stupid cold, so I'm definitely being reminded about how important having good health is. Uh it is keeping me from spending time with my family and my loved ones because I don't want to, you know, give my my uh family, especially my wife's uh you know, parents who are in their 80s, uh whatever I've got. Um, so to keep me so I'm actually getting a a real real time reminder of of the importance of these these real wealth things. Um, [clears throat] so uh at the end of the day, we're all working to get our our financial wealth as as high as we can get it. Uh not just to have a big number on paper uh but to be able to fund our life's goals and dreams. So, can you guys just talk for, you know, just in providing some closure here at the end of the year, how do you guys work with people to help them uh crystallize what those goals and dreams are and put together a plan to get there and then help remind them, you know, hey, you're focusing a little bit too much on just the number going up. Now's the time to actually focus on taking that number and doing the things you want to do in your life while you still can do them. So um I guess John let's go to you but then Mike will we'll let you answer this as well. >> Well yeah Adam so certainly uh we as an individuals have our own goals and aspirations but our clients are are their own unique people and our job is to help them and you know realize their own unique um desires right not to impart our our our views on things necessarily but I'll just give you a glimpse of the kinds of conversations I just I and I know Mike has had and um everybody in our team has these conversations nearly daily. uh in just the last couple of days. >> Sorry to interject, but if you include in your answer here, like I'm going to guess, and correct me if this is an incorrect assumption, >> but a lot of times when people, you know, approach you initially, they might not be crystal clear on what their future goals are, right? They might need some help in actually getting all that clarified and then quantified. >> Absolutely. Absolutely. That's a big part of what So, we we have some financial planning software that we can and oftentimes use with folks. And uh I would first say that these are just black boxes. they can be very improperly used um with the with the assumptions going in. For example, assumptions about returns going in. I would say probably nine out of 10 financial adviserss that are using these are making some outlandishly optimistic assumptions about returns and and that's not good. Uh because it's not a re it's not grounded in reality. So these tools are are fine as long as they're used with with doses of of reality. Um, we have tools to walk clients through an analytics on on those kinds of hey, resources versus goals and hey, do things balance out? Are you going to be okay? So, we we have as good a tools as any firm I I would say, but it's the application and the exploration and and uh tire kicking of the assumptions and and the framework that I think is really where the value comes. So, um so for example, and and like I'm I'm going to go probably not on a limb here. most most households that we serve, there's often times one spouse that is more in the driver's seat, if you will, than the other in terms of um financial decisions and wherewithal. And sometimes there is a unintentional, you know, the spouses may be all well loving and caring for each other, but there's this unintentional gap in understanding and and even ability to articulate uh what each spouse wants. So oftentimes the most valuable uh conversations we have is is when we have, you know, spouses together and we're we're talking to them. Hey, let's talk about your goals. Let's put some price tags. And oftentimes it's the first conversation they've really ever had. Again, not to over over value or overemphasize our role, but you know, it's it's it's kind of it's it's really heartwarming actually because you get to see the spouses look at each other and say, you know what, it's kind of crazy, but I don't think we've really had this conversation before. or you know I'm glad we are finally you know and often times you hear things that and and you'll see one spouse's eyebrow go up saying really that's that's how you feel like wow why don't we talk about this earlier so I again I don't want to overemphas emphasize our our role in unlocking those things but that's a huge part of it um and sometimes it's just giving people permission you know sometimes the the fear they have keeps them from doing things they really want to do um in just the last handful of days we've processed a bunch of folks requests to donate uh funds to charities sometimes and we help them in in smart ways to do that whether it's through qualified charitable distributions from their IAS to avoid income taxes or uh gifting directly of appreciated securities from taxable accounts that um you know avoids the need to have to incur capital gains. These are all the kind of the nuts and bolts financial things that we can you know optimize for them. Um but it starts with you know helping them really get in touch with what they want to do and then give them permission in some cases that they can actually do it without having to worry. Had another conversation with um you know parents and they're they they uh want to help their their children are independent on their own and and working really hard saving money um but they want to do some lifetime giving to not only from a smart estate planning standpoint but also to to help their children. You know, there's a book out there called die with zero that many people might might be familiar with. On the surface, it sounds like this hedonistic, you know, spend all your money and die with zero, but it's no, it's more about like, hey, if you've got resources, why not use them impactfully during your life if you can and not just at your death, right? Sometimes at your death, it's like a little too little too late that you know, other other people, including family members, might have been able to enjoy those resources more more positively, I suppose. So this this particular uh couple would like to gift some money to their children to start to build help them build up a further down payment for a house someday. Um and that's you know perfectly and and they very much want to make sure the kids have the discipline that they they get a mortgage that it's not a gift of a home but just a a helper you know kind of thing. So sometimes walking through those things in terms of can we do this in the in the realm of our needs because we don't want to you know kind of put your own life life you your own oxygen mask on first kind of analogy on an airplane. You don't want to starve yourself by giving too much to your kids or family or whatever or charity. So all these things are yeah they're mathematical discussions but they're just as much psychological and emotional and and feeling peace with with decisions. >> All right. Well a great answer. Right. Well Mike coming over to you f first off. anything to add to that? >> Yeah, Adam, I I think that we probably said this many times and John just said it too, that we do act as therapists, financial therapists for people, and I definitely don't want to usurp the hard work or the authority that licensed clinical social workers or therapists have. In fact, you know, frankly, if I wasn't doing this job, I think I'd like to be a therapist or a social worker. It's the type of work that I really enjoy because I can connect emotionally and heart-to-heart with people. But maybe it's just because of sheer life experience and and after doing this for 25 years, you you get to know people. And I think that we're uniquely we're uniquely equipped to help people in this slice of their life. You know, how psychology connects with money. And you know, like John just said, a lot of times we're meeting with a couple. And one of the two couples is the squirrel, you know, gathering the nuts or the acorns, and the other one is the one that wants to use them or do other things. And a lot of times we can bridge that gap and help people feel like it's okay to use some because most of our clients, and I know this is probably a a good problem to have, most of our clients really won't ever use most of their money. It's a human nature thing to gather as much as you can because nobody knows the future. We don't know what storms are going to come. But the whole purpose of this is to live your life and to the extent that we can prove to people either through our own experience uh and tell them look you've got enough or even with financial planning software to prove mathematically and it depends upon what type you the person you're talking to by the way. Some people need to see the evidence. Other people just need to hear somebody that has the experience tell them that it's going to be okay. Whatever it is, it can allow them to release a little bit and do some things. Put the addition on the house, redo the bathroom, go on a trip to Europe, give money to charity, like John said, give it to the kids. After all, that's what it's all about. This money is kind of not even real anyway. Our government's just making it up. So bring it down to something that is real. Bring it into your life and do something with it. Even if it's little by little, talk with us if you want to have some experience behind that based on people that have been there and have seen a lot over the years. But that's what this job is all about to me and um happy to help. >> All right. Well, [clears throat] hopefully this has been grounding for folks in terms of the you know what it all means in the big picture of things, right? Why are we doing this? And at the end of the day, you know what you get what you want to get clear on is okay, how do I want to use this money um if I have been successful in everything else, earning it, saving it, growing it, keeping it, etc. Right? Uh a lot of people I know who watch these videos um are well on their way to success there, if not already very much at success. Um, and so, you know, I encourage everybody during this holiday season while you're spending time with the folks that you love the most and you've got a little bit of a break from your your usual routine and grind um that you do some reflection on um all right well, you know, what are the what are the things I want to manifest in my life while I still have, you know, good years ahead of me uh that I can bring to bring into creation using the money that I've worked so hard over time to build. I mean again at the end of the day money is the means. It's not the end in itself. Um and I presume guys that anybody who wants help with thinking through that can contact you guys and you know leverage your guys' expertise as financial counselors and helping them kind of put that vision together if they don't have it clearly in their mind and then you know putting timelines and and uh you know progressive plans into making all that happen. Correct. >> Absolutely Adam. We u love having conversations. there's no pressure. Um, you we've been fortunate enough to build a uh, you know, a business here that is sustainable and growing and and we can truly just uh, embrace incoming inquiries just for the the natural conversation that it's meant to be. And if we can part a couple minutes of value to anybody that talks with us, that that's enough uh, enough reward for us. And and I should say it's not just Mike and I, of course, we have a great team that we work with. uh we we've been very deliberate to to grow our team with the kind of good people that we know our clients deserve and and uh we'd be remiss if we didn't give a great shout out to our team and express our thanks for for for our our joint role together on behalf of our clients. >> All right. Well, look, um gentlemen, thank you for again, you know, offering those services to everybody as generously as you do. Thank you for coming on this week, you know, the day before Christmas to film this with me. Thanks for coming on this channel with me every week uh to share your insights with the thoughtful money audience. Um huge amount of gratitude for you guys and nothing but the best uh holiday wishes for you guys, your families, your wonderful team there at New Harbor. Um, so folks, look, if you'd like to uh get some help from uh the team at New Harbor or one of the other financial adviserss that thoughtful money endorses uh to set yourself up, not just for hopefully a prosperous 2026, but as I was just mentioning, you know, really clarifying how you want to use your wealth to enrich your life in the big picture. Um, then consider scheduling a free consultation with one of these firms. To do that, just fill out the very short form at thoughtfulmoney.com. only takes you a couple seconds to fill out the form. Uh these consultations are totally free. There's no commitment involved. It's just a service these firms offer to be as helpful to as many people as possible. And um uh if you can also guys too viewers uh please join me in thanking John and Mike for coming on the channel by hitting that like button and if you haven't already clicking on the subscribe button below as well as that little bell icon right next to it. Uh John and Mike, I think this is the last recording we're going to have in 2025. So I just wish you guys and your families all the best. >> Think so too, Adam. And we're really grateful for your viewers for you prim primarily, but I think even more so the viewers. I think that you and I both agree on that. Uh without the viewers, neither none of us would be here. So this platform we're very grateful for and the the opportunity to do some good in the world. Thank you, Adam. And thank you all for uh tuning in every week. >> Here's to that. Thank you, Adam. Happy New Year. Merry Christmas. Happy holidays, everybody. >> All right, take care, boys. Yes, happy holidays to everybody watching. Thanks so much for joining this channel. As Mike said, none of this would be possible without you, the viewers. Wishing you the best of the holidays, a very happy new year, and uh see you soon on the channel. Thanks so much for watching, everybody.