Investing

For much of the history of the stock market, investing was primarily about individual stocks and bonds. Over the past few decades, however, macroeconomic developments have increasingly influenced markets.

The human brain is excellent at finding patterns, a skill that has evolved to help us across many parts of life. However, it can also lead us astray when there is no real pattern at all, such as when we see shapes in clouds and ink blots.

It has now been more than three-and-a-half years since the bull market began in October 2022. At that time, inflation was rising at its fastest pace in fifty years, the Fed was hiking interest rates, and ChatGPT was still a month away from being released to the public.

Global events have been at the center of financial market activity, with high oil prices, geopolitics, and new tariff rules capturing investor attention. Behind many of these trends, however, is the level of the U.S. dollar.

For most Americans, the price of gasoline at the pump is one of the direct ways the conflict in Iran affects their everyday lives. Gasoline prices are prominently displayed and updated frequently, and filling up on at least a weekly basis is a basic necessity to commute to work, school, buy groceries, and more.

The ongoing conflict in Iran and the effective closure of the Strait of Hormuz have pushed oil prices sharply higher. Both Brent crude and WTI have jumped from around $70 per barrel to around $100 in just a few days, approaching levels last seen in 2022 when Russia invaded Ukraine.

As you have seen in the news, the U.S. and Israel have launched military strikes against Iran, targeting its leadership, military assets, and nuclear infrastructure. Iran's Supreme Leader is confirmed to have been killed, and Iran has retaliated with missile and drone attacks across the Middle East.

After nearly a year of trade policy uncertainty, the Supreme Court's ruling that recent tariffs are unconstitutional has reset the policy landscape. Yet, as is often the case in Washington, when one chapter closes, another opens.

Fifteen years ago, venture capitalist Marc Andreessen famously wrote that "software is eating the world." What he meant was that any service that could be written and automated as software, would be.

As the corporate earnings season ramps up, markets are shifting their focus from geopolitical concerns to tangible evidence of how businesses are performing. With the stock market hovering near all-time highs, questions around valuations and the sustainability of recent profitability trends have become increasingly important.

Gold, silver, and other precious metals have rallied over the past two years, capturing investor attention. Gold recently surpassed $4,700 per ounce while silver now trades above $90 per ounce, marking historic milestones for both metals.

The strong stock market performance of the past several years has been positive for investors and their financial plans. At the same time, these recent successes can lead to unrealistic expectations when it comes to long-term financial goals.