Last week, chip maker Intel delivered its seventh consecutive quarterly earnings beat with revenue growing 25% year over year, its fastest growth since 2011. Its non-GAAP EPS of $0.42 doubled the $0.21 consensus. Data Center and AI revenue surged 59%, and 18A foundry output exceeded internal targets by roughly 25%. Intel shares initially jumped as much as 13% after hours, but despite the outstanding earnings report, the shares gave up much of their gains. Furthermore, fellow chip makers Broadcom, AMD, and Micron were lower as well.

The lackluster price movement is a market tell. In late June, Intel was up over 250% year to date. Since then the stock has given up 30% from its high point. We saw a similar earnings reaction a day earlier with Alphabet. Their

Thursday’s selloff, led by Alphabet down 7% and Tesla down nearly 15%, was a great example of a story that has been unfolding throughout most of the year. While the largest stocks led the market lower last Thursday, many other stocks, especially small caps, were flat to higher on the day. That divergence has been a defining feature of 2026.

This year, the most followed gauge of small caps, the Russell 2000, has gained roughly 17% year to date, on pace for its best annual performance since 2003. Over the same period, the S&P 500 has climbed by 8%, weighed down by the Magnificent Seven, which are up less than 5%. For the first time in a while, small caps are meaningfully outperforming megacap and other AI-related stocks.

Earnings forecasts are supportive of the

Alphabet reports earnings after today’s close, and Intel follows tomorrow. Together, they provide a first clue as to whether AI-related spending and investment continue at the brisk pace of the prior quarters.

Alphabet represents the demand side for AI models. Google’s Cloud backlog nearly doubled sequentially last quarter to a record $462 billion, growing 63% year over year, the fastest pace among major cloud providers. That backlog is one important reason Alphabet and the other hyperscalers continue to allocate hundreds of billions of dollars to build out data centers. The problem, however, with their massive spending is declining free cash flow. Alphabet raised 2026 capex guidance to $180 to $190 billion and told investors 2027 spending will "significantly

The American Association of Individual Investors (AAII) sentiment indicator claims that 60.6% of the retail investors are bearish. The percentage of bears in its survey increased sharply from 40.5% at the prior reading on February 19. The AAII retail investor survey is now the most bearish it has been since September 2022. More stunning, this is only the sixth time since 1987 that bearish sentiment has been above 60%. Furthermore, the five-week change in the index is the third largest in history.

The graph below shows that a similarly high level of retail investor bearishness occurs most often when the market has already declined significantly. Some may argue that political sentiment may dramatically impact the current reading. While we certainly have seen that

The American Association of Individual Investors (AAII) sentiment indicator claims that 60.6% of the retail investors are bearish. The percentage of bears in its survey increased sharply from 40.5% at the prior reading on February 19. The AAII retail investor survey is now the most bearish it has been since September 2022. More stunning, this is only the sixth time since 1987 that bearish sentiment has been above 60%. Furthermore, the five-week change in the index is the third largest in history.

The graph below shows that a similarly high level of retail investor bearishness occurs most often when the market has already declined significantly. Some may argue that political sentiment may dramatically impact the current reading. While we certainly have seen that

Required Minimum Distributions (RMDs) are an essential part of managing your retirement accounts and income in retirement. While they provide a way to access your savings, RMDs can have significant tax implications if not handled properly. Understanding how RMDs work, which accounts they affect, and strategies to minimize their tax impact can help you optimize your retirement plan and protect your hard-earned savings.

What Are Required Minimum Distributions (RMDs)?

RMDs are mandatory withdrawals that the IRS requires from certain retirement accounts once you reach a specified age. They are designed to ensure that retirees eventually pay taxes on the pre-tax contributions and earnings in their retirement accounts.

Key Facts About RMDs:

RMDs must begin at

Required Minimum Distributions (RMDs) are an essential part of managing your retirement accounts and income in retirement. While they provide a way to access your savings, RMDs can have significant tax implications if not handled properly. Understanding how RMDs work, which accounts they affect, and strategies to minimize their tax impact can help you optimize your retirement plan and protect your hard-earned savings.

What Are Required Minimum Distributions (RMDs)?

RMDs are mandatory withdrawals that the IRS requires from certain retirement accounts once you reach a specified age. They are designed to ensure that retirees eventually pay taxes on the pre-tax contributions and earnings in their retirement accounts.

Key Facts About RMDs:

RMDs must begin at

Consumer Confidence, as surveyed by the Conference Board and University of Michigan, shows consumers are starting to lose economic confidence. Given that consumer spending drives the economy and influences inflation, confidence and the means to spend can significantly impact markets. Based on recent job data, the means (i.e., wages) to consume appear to be in good shape. However, consumer savings are historically low, while credit card balances are high. Recently, in a sign that the average consumer may be retrenching, consumer debt declined by the largest amount in ten years, excluding an instance in early 2020. Equally crucial to consumer spending is confidence. Even if consumers have the financial ability to consume, they must also have the desire or

Consumer Confidence, as surveyed by the Conference Board and University of Michigan, shows consumers are starting to lose economic confidence. Given that consumer spending drives the economy and influences inflation, confidence and the means to spend can significantly impact markets. Based on recent job data, the means (i.e., wages) to consume appear to be in good shape. However, consumer savings are historically low, while credit card balances are high. Recently, in a sign that the average consumer may be retrenching, consumer debt declined by the largest amount in ten years, excluding an instance in early 2020. Equally crucial to consumer spending is confidence. Even if consumers have the financial ability to consume, they must also have the desire or

During Donald Trump’s first term, some investors bought into the Trump 1.0 Put. The trade was based on the market’s belief that Trump believed the stock market’s performance was a referendum on his presidency. Accordingly, investors thought that Trump would do everything he could to backstop the stock market if it fell. Thus, some investors thought it worthwhile to sell puts, collect the proceeds, and sit back comfortably, not fearing losses. According to a Bloomberg article, US Treasury Yields Offer A Scorecard For The White House’s Cost Cutting Vows, Trump’s second term proxy may be the Trump 2.0 Put. The Trump 2.0 Put has a similar meaning to the 1.0 Put, except it pertains to the bond market. Per Bloomberg:

Trump has famously obsessed with the stock market

During Donald Trump’s first term, some investors bought into the Trump 1.0 Put. The trade was based on the market’s belief that Trump believed the stock market’s performance was a referendum on his presidency. Accordingly, investors thought that Trump would do everything he could to backstop the stock market if it fell. Thus, some investors thought it worthwhile to sell puts, collect the proceeds, and sit back comfortably, not fearing losses. According to a Bloomberg article, US Treasury Yields Offer A Scorecard For The White House’s Cost Cutting Vows, Trump’s second term proxy may be the Trump 2.0 Put. The Trump 2.0 Put has a similar meaning to the 1.0 Put, except it pertains to the bond market. Per Bloomberg:

Trump has famously obsessed with the stock market

In its annual letter to shareholders this past weekend, Warren Buffett’s Berkshire Hathaway announced that it had increased its cash holdings to $334 billion. As the Financial Times chart on the right shows, Berkshire’s cash balances have more than doubled over the last few quarters to its highest level. Additionally, cash as a percentage of assets, graphed on the left, shows it now holds more cash as a percentage of its portfolio than before the 2008 financial crisis. Warren Buffett must think stocks are expensive, and thus, he prefers the Treasury market’s safety and relatively high yields.

Another interesting fact from the report is that for the second quarter in a row, despite its massive cash holdings, Berkshire did not buy back its stock. Buffet has

When planning for retirement, most people focus on savings, investments, and budgeting for daily living expenses. However, one critical component that often gets overlooked is an emergency fund. Having an emergency fund in retirement is essential for maintaining financial stability and peace of mind. Unexpected expenses, such as medical bills or home repairs, can derail even the most carefully constructed financial plan.

This guide explains the importance of emergency funds in retirement, how to determine the right amount, and strategies to build and maintain this essential safety net.

Why Are Emergency Funds Crucial in Retirement?

1. Financial Security in Unpredictable Situations

Emergencies don’t stop just because you’re retired. Unexpected expenses,

In mid-March, the government is expected to hit the debt ceiling. As has seemingly become the norm, dire threats from both political parties will start shortly. However, despite the fiery rhetoric, they often get resolved before the government shuts down. Might the coming fiscal standoff be a little different? Our colleague Greg Valliere, a long-time Washington DC insider, explains why a shutdown may be more likely this time. Greg starts his latest article by asking the following: Democrats Are Asking: why should we give Republicans the votes they need to pass a debt ceiling extension in mid-March? He follows:

THE FRUSTRATION AMONG ALL DEMOCRATS and some Republicans over Elon Musk is palpable; a shutdown, perhaps for a few weeks, would send a message to House

The January CPI report was troubling as it rose more than expected. The monthly rate rose by 0.5%, about 0.2% above expectations. The core monthly rate was a tenth of a percent above expectations, at 0.4%. The year-over-year CPI rate rose to 3% from 2.9%. The latest CPI data argues inflation is stuck in a range above the Fed’s 2% target. Accordingly, we should assume that the Fed will almost certainly be on hold for quite a while. The market tends to agree with that assessment, pushing the next full rate cut out to December.

While the headlines are unequivocally bad, it is worth discussing a few details to illuminate the data more clearly.

Shelter costs accounted for 60% of the increase. While CPI shelter prices remain stubbornly high, they are known to lag

Managing risk is one of the most critical aspects of successful investing. While all investments carry some degree of risk, effective investment portfolio risk management can help you preserve wealth, achieve financial goals, and weather market fluctuations. Understanding and employing strategies such as diversification, asset allocation, and hedging can significantly reduce your exposure to potential losses.

This guide explores the concept of risk management, strategies for reducing investment risks, and tools to safeguard your portfolio during market uncertainties.

What Is Risk Management in Investing?

Risk management is the process of identifying, assessing, and mitigating potential losses in an investment portfolio. It is a proactive approach that

The graphs below, courtesy of Truflation, are very telling. The Truflation US Inflation Index uses over 30 million data points to assess price changes and, as a result, provide a robust forecast for the BLS CPI number. Moreover, their data have proven to be an incredibly accurate forecasting tool. As we share in the graph on the left, courtesy of Truflation, their index tends to lead CPI by 45 days. Their comparative analysis shown below stops at the end of 2024. Therefore, we share their current inflation index on the right to help better form expectations for tomorrow’s CPI number and, more appropriately, the coming month’s inflation data.

The Truflation Index started the year at 2.77%. It has since plummeted to 2.11%. Thus, if the index remains a good

If one weren’t paying attention to the cryptocurrency market, one would think that all cryptocurrencies were doing well. For instance, meme coins are all the rage, and Bitcoin has been up about 50% since the election. Donald Trump and his pro-crypto rhetoric help explain the rally. Moreover, Trump has nominated pro-crypto people to serve important financial roles within his administration. However, while most cryptocurrencies do very well, Ethereum is struggling. The graph below shows that Bitcoin (orange) and Ethereum (blue) have tracked each other closely for the last few years. However, ethereum has grossly underperformed Bitcoin since early December.

The graph on the right helps explain the irregular divergence. It shows that short positions in Ethereum are

Planning for retirement is one of the most important financial goals in life, yet it’s also one of the most complex. While creating a retirement plan on your own may seem feasible, the expertise of a financial advisor can make a significant difference. Financial advisors offer personalized strategies, help navigate complex financial decisions, and provide ongoing support to ensure your plan adapts as life circumstances change.

Here’s an in-depth look at the benefits of financial advisors and how they provide invaluable retirement planning assistance.

Personalized Retirement Strategies

A financial advisor doesn’t take a one-size-fits-all approach. Instead, they work closely with you to develop a retirement plan tailored to your unique goals, income, and

Bond vigilantes had been questioning Janet Yellen’s debt management tactics in her role as Treasury Secretary. Specifically, they accused her of shifting debt issuance away from longer-term maturities and toward shorter ones. We think her strategy made sense. Yellen was issuing more debt where demand was the greatest and trying to limit the amount of debt where demand was weaker. Secondly, she was making a bet on lower interest rates. She issued more shorter-term debt in hopes that rates would come down. It could then be rolled over into longer-term debt at lower interest rates when it matures. The new Treasury Secretary, Scott Bessent, also seems to believe that interest rates for long-term debt will decline in the coming months and years.

Unlike Yellen, Scott

The Wall Street Journal published an interesting article For Small Cap Stocks, Look Past The Trump Trade. It is worth sharing the article’s premise and the potential pitfalls in the analysis as quite a few articles seem to be popping up recently touting small-cap stocks. Let’s start with the scatter plot below, courtesy of Fuery Research Partners and the Wall Street Journal. Data from 1968 shows that the lower the ratio of the P/E of small-cap stocks versus the P/E of large-cap stocks, the better the forward small-cap relative returns versus large-cap stocks. Moreover, when the ratio is 80% or less, as today (64%), small caps beat large caps every time. Per the article:

According to monthly data by Furey Research Partners going back to 1968, which includes

Planning for retirement involves building a diverse and stable income strategy that ensures financial security throughout your golden years. Among the tools available, annuities in retirement planning offer a unique advantage: the ability to create a reliable, guaranteed income stream. However, understanding their types, benefits, and potential drawbacks is essential to determining whether they fit into your retirement plan.

What Are Annuities?

Annuities are financial products offered by insurance companies that provide regular payments in exchange for an upfront investment. Designed to deliver a steady income, they are particularly useful for retirees seeking stability and peace of mind.

How Annuities Work

You invest a lump sum or make periodic payments

When formulating its monthly employment data, the BLS includes an adjustment for the net number of new jobs coming from new businesses and those lost by companies that have shut down. This adjustment is logical, as neither new nor closing firms are included in their surveys. While the so-called birth death adjustment is rational, the number of net jobs added due to the estimate can be incredibly flawed. The latest example is in the latest BLS Business Employment Dynamics Summary.

Within the summary covering March through June 2024, the BLS reports the following regarding its birth death adjustment: "The difference between the number of gross job gains and the number of gross job losses yields a net employment decline of 163,000 jobs in the private sector during

The newly formed Department of Government Efficiency (DOGE), headed up by Elon Musk, is tasked with reducing government waste and increasing efficiency and productivity. The big question bond investors are keying on is how effectively DOGE can reduce the deficit. Tracking DOGE savings is now easy. As we share below, the US Debt Clock shows a running total of cumulative DOGE savings. Thus far, in less than a month, DOGE has saved $56 billion, as shown below (box in the upper left of graphic).

Musk’s goal from the onset was to save the government $1 billion per day. However, he is on pace for $2 billion or more daily. Let’s extrapolate his recent success to put the data into proper context. If DOGE can save $2 billion per day, the government can save about $700

Investors woke up Monday morning to a sea of red. On Friday, after the markets had closed for the weekend, President Trump announced a new series of tariffs levied against Mexico, Canada, and China. Moreover, he threatened that those tariffs could increase and that new tariffs would be announced for the Euro-region. Cryptocurrencies, technology, and the currency markets took the brunt of the initial selling reaction. For our latest thoughts on the tariffs, please check out Monday’s Real Investment Advice Show- Tariff Trouble.

The dollar index soared by $1.50, while the Canadian dollar, Euro, Peso, and Yen fell by similar amounts. In 2018, when Trump tariffs 1.0 were announced, the dollar index rose by nearly 10% throughout the year. Since early October, when

Securing your financial future begins with a comprehensive plan. This guide explores the fundamentals of financial planning, building a holistic strategy, and effective retirement techniques. Readers will learn how to navigate financial statements, manage tax planning, and engage with a financial advisor for wealth planning. Whether dealing with a single audit or seeking to enhance your financial strategy, RIA Advisors offers the insights needed to address these challenges. By following this approach, you’ll be equipped to create a robust financial plan tailored to your unique needs.

Understanding the Basics of Comprehensive Financial Planning

Comprehensive financial planning involves creating a detailed strategy that aligns personal goals with effective

The media holds bond vigilantes out as do-gooders looking to force the government to be fiscally responsible. In reality, these vigilantes are traders who are short bonds, and use the fear of deficits and inflation to drive yields higher. While the term has been around for 25+ years, their recent success is unlike any past. As we wrote in Why Are Bond Yields Rising?, and show below, the term premium, or additional yield on Treasury bonds, is the highest since at least 1990. The government must now pay almost 1% more than is typical due to the vigilantes fear-mongering. Elon Musk seems to understand how to save the government this 1%. As his statement below shows, Musk is trying to talk bond yields down.

Elon Musk says there will be "no inflation in 2026" if

When it comes to building long-term wealth, it’s not just about how much you earn but how much you keep. Taxes can significantly impact your investment returns, making tax-efficient investing a crucial component of any wealth accumulation strategy. By utilizing tax-advantaged accounts, employing strategies like tax-loss harvesting, and selecting tax-efficient funds, investors can reduce their tax burdens and maximize after-tax returns.

Why Tax-Efficient Investing Matters

Taxes are often one of the largest expenses investors face. Without a tax-efficient strategy, a substantial portion of your investment gains could go to the government instead of fueling your financial growth. For example, capital gains taxes, dividend taxes, and income taxes can erode your

Retirement may seem like a distant milestone when you’re in the early stages of your career, with other financial priorities like paying off student loans, building an emergency fund, or saving for a home often taking center stage. However, starting your retirement planning early offers significant advantages that can make a profound difference in your financial future. 

By taking proactive steps now, you can harness the power of compound interest, establish achievable financial goals, and build a solid foundation for long-term wealth. These efforts not only pave the way for a secure and stress-free retirement but also instill disciplined financial habits that will benefit you throughout your life.

The Power of Compound Interest

One of the most compelling