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Aug 31
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Update on the Bond Market: What the Price Chart Doesn’t Show You

By The Bond Market

Bonds have had a rough stretch this year. Prices fell as interest rates rose. It is fair to look at a bond fund, see a lower share price, and wonder why you still own it.

Here is the part the price chart hides. Total return is what matters, not price alone. The majority of a bond fund’s total return comes from interest payments, which are not shown within a bond fund’s price.  When rates rise, bond prices fall. But the fund then buys new bonds at higher rates. That higher income lifts future returns. Right now the income is doing most of the work.

A broad bond fund yields close to 5% today. Inflation sits near 3.4% (BLS). That gap is real income, and it gives your money a cushion. Rates would have to climb a good deal further before a full year of total return turned negative.

What pushed rates up? A few things lined up at once. Oil prices spiked due to the conflict with Iran. Inflation rose due to higher energy prices and concerns that the conflict will last longer than expected. The Fed and Treasury sent mixed signals. We are monitoring these changes in the economy and markets.

We also position your accounts for this type of volatility. Our bond holdings carry a shorter duration than the broad market. A shorter duration means less price movement when rates change. That is deliberate.

We look at cash the same way. Money market yields have slipped. For cash you do not need soon, a short-term Treasury fund can earn a bit more. The tradeoff is a little price movement and some rate risk. We weigh that account by account.

We are watching one thing closely. Whether inflation reaccelerates or long-term rates stay high. If that picture changes, we adjust.

Let us know if you would like to discuss your specific situation and whether a change in your asset allocation is warranted.

 

Your Market Analyst,

Tony

Aug 26
Love0

A Surprisingly Effective, Old-Fashioned Way To Capture, Retain and Recall Information

By Capturing Information

Key Takeaways:

  • Longhand note-taking can potentially help you retain and recall information better than taking pictures of slides, reports, etc.
  • Using abbreviations, codes and other shortcuts can improve your ability to take effective, usable notes.
  • Consider creating mind maps based on your notes to help see how information is connected.

It’s no secret that retaining and recalling important information that we learn are invaluable skills—ones that serve us well throughout our lives in just about any professional or personal situation.

It also may be that holding on to info and calling it up on demand feels especially challenging today. Thanks to factors such as the internet contributing to shortened attention spans and the aging of the Baby Boomers, there are a lot of people looking to keep their minds sharp. What’s more, many highly successful people tend to recognize the importance of lifelong learning—continuing to build new skills and discover new insights that can help them remain successful.

That’s one reason the brain-training apps market is expected to grow to a $56 billion industry by 2031, according to InsightAce Analytic.

But the thing is, you might be able to boost your memory retention and recall skills—at home, in the workplace or out in the world—simply by taking a very low-tech action that you probably did for a good chunk of your life: taking good notes using a pen and paper.

The power of the pen

If you’ve attended a lecture, a training session, a seminar or even a Zoom presentation in the past few years, you’ve likely seen participants taking pictures of slides or other info with their phones. Snapping a quick pic of that informative pie chart is the new form of note-taking these days.

But according to a 2023 study published in the Journal of Experimental Psychology, longhand note-taking may better enable you to process, remember and recall that info.

The survey compared the effects of longhand note-taking, photographing lecture materials with a smartphone camera and not taking any notes at all. These are some of the findings:

  • Longhand note-takers outperformed photo-takers and non-note-takers on a recall test.
  • The longhand note-takers even did better when the photo-takers and control participants were allowed to review an exact transcript of the lecture slides via their photos or printouts.
  • Photo-takers performed comparably to learners who had not taken any notes at all.
  • Relative to those who took photos or did not take any notes, longhand note-takers maintained better focus and, in turn, demonstrated superior retention of the content.

If those results seem obvious, consider this: Across the experiments, participants misjudged all three techniques as being equally effective. As the study’s authors note, “Knowledge that is easily and conveniently acquired in a snap may not be better remembered.”

Indeed, taking a picture on a smartphone requires no meaningful mental engagement with the information being captured. In contrast, writing down notes requires you to focus, keep up with the information being presented, and decide in the moment which details are most relevant as well as how disparate bits of information connect to each other to form a bigger, more comprehensive picture of the situation.

If you’re looking for more reasons to take pen in hand, consider reports that Bill Gates, former Meta COO Sheryl Sandberg and Virgin’s Richard Branson make it a point to regularly write down notes on paper.

Hone those note-taking skills

There’s a decent chance it’s been a while since you’ve taken handwritten notes while someone is speaking. With that in mind, consider these tips:

Jot down key phrases

Note-taking is exactly that—notes. Don’t try to write down a speaker’s full sentences or even every “a,” “the” and “and.” Rather, write the key words and phrases that you need to get the idea or the point—including any technical terms that are important for comprehension.

Abbreviate

If you need to get notes written down fast, use abbreviations. You can make up your own (as long as they make sense to you), or you can use common abbreviations. For example:

  • etc. (et cetera) = and the rest
  • ex = for example
  • RE = regarding
  • info = information
  • p = page (pp = pages)
  • s = stocks; b (or FI) = bonds

Add your own words

Paraphrasing in your own words can help you better comprehend what you’re hearing and remember it later. That said, if the speaker is relaying highly specific terms or data, aim for accuracy.

Use a code

For example, when the speaker makes a major point, circle, underline or star it—then use a different code for each minor point or subpoint they make. Make numbered lists that track the order of the speaker’s points. You can choose your specific codes for emphasis, of course—just be sure you’re consistent.

Print out the slides

Most presentations are accompanied by slides. Print them out and mark them up—annotating them with the relevant information in the exact right place.

Flag missing info

Even if you have an efficient, fast system, you likely will miss an important detail occasionally. If so, leave a space or a “fill in the blank”-style line. After the presentation, seek out the missing info.

Write down questions that arise

As you engage with a presentation and process what you’re hearing, it’s likely that questions will arise in your mind based on what you’re hearing. Write them down—during pauses in the presentation, perhaps—so you can research them or bring them up during a Q&A session. Questions can both help crystallize your understanding of the material and increase your knowledge.

Tweak your approach with asynchronous learning

Asynchronous presentations, webinars and the like are recorded for participants to view at their convenience. You can pause these recordings, of course, but try to watch them all the way through without stopping them. The reason: It can help you avoid the temptation to write down every word accurately—at which point you become more like a transcriber going for perfection rather than a learner seeking to understand and process information.

Another tip: Watch the presentations at regular speed instead of speeding them up, to get yourself closer to the “you are there” feeling that helps with focus and concentration.

Harness the power of your notes

One problem with taking pictures during presentations is that the photos are likely to sit, untouched, on your phone afterward. But the same issue can occur with written notes. If you stick them in a drawer, they won’t do you much good.

To get the most from your note-taking efforts, consider some post-presentation work.

Mark ’em up

Review your notes very shortly after a presentation to ensure they make sense and to fill in any missing info that you heard but didn’t write down. Use one color to highlight the major sections and point, another to indicate supporting points. If the speaker followed up on a point several minutes later with new or augmented information—which often occurs if a presentation is somewhat nonlinear or if someone in the audience asks a follow-up question—indicate the connection between those two moments (using stars, arrows, a specific color, etc.).

Check in with others

If you’re part of a cooperative group or team that’s attending a meeting or presentation, compare notes with each other afterward to see whether you’ve missed important details. This action can also lead to group discussions about the information, which can help further your understanding or provide insights you hadn’t thought of.

Do a study-sleep-study routine

After the meeting or presentation, review your notes briefly before you go to bed as a check-in for understanding and to reinforce the information that is especially relevant to you. Then, in the morning, do another brief review. The reason: A study out of France, published in Psychological Science, found that getting sleep between two learning sessions not only reduced the amount of practice needed by half but also ensured much better long-term retention.

Create a mind map

Mind mapping is a visual technique used to graphically organize notes and draw clear connections between the various ideas that may have been raised during a presentation or meeting. It captures information quickly yet in a highly organized format. It also makes it easy to link and cross-reference very different yet connected pieces of information. And it translates your notes into a visual document that is fast and easy to review. The end result is a clearer picture (literally) that translates information into knowledge that can then be used to create next-step action plans.

Mind mapping techniques can be found across the internet, and software programs also enable on-screen mind mapping.

Conclusion

In an increasingly tech-driven world, it’s easy to forget that old, well-established techniques for getting things done may work as well as or better than the latest modern approach. Give pen-to-paper note-taking a shot the next time you need to capture information, and use it to make informed decisions about your business, your life or both.

 

 

VFO Inner Circle Special Report

By John J. Bowen Jr.

© Copyright 2026 by AES Nation, LLC. All rights reserved.

This report was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families, and is distributed with its permission. Copyright 2026 by AES Nation, LLC.

No part of this publication may be reproduced or retransmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the author nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The author will make recommendations for solutions for you to explore that are not his own. Any recommendation is always based on the author’s research and experience.

The information contained herein is accurate to the best of the publisher’s and author’s knowledge; however, the publisher and author can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing.

Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. NewEdge Advisors, LLC and Tony Baruffi are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of VFO Inner Circle reports.

Jul 09
Love0

In Search of Lost Margins

By State of the Economy - 2Q 2026

Daniel Kahneman spent much of his career studying why smart people make bad decisions, and his book ‘Thinking, Fast and Slow’ boils it down to two systems running inside every one of us. System 1 is fast, intuitive, and emotional. It reacts to a loud noise, a scary headline, a sudden price spike, before you’ve had a chance to think. System 2 is slow, deliberate, and effortful. It’s the part of your brain that actually does the math, and most people avoid engaging it whenever System 1 offers a plausible-enough answer on its own. Kahneman’s core finding was not that System 1 is bad. It is fast for a reason. His finding was that we consistently let System 1 answer questions that only System 2 is equipped to handle.

Markets run on the same two systems, and this quarter was as clean an illustration of the difference as I’ve seen in some time.

The story everyone watched

At the end of February, war broke out with Iran, and oil markets did exactly what System 1 would predict. WTI crude spiked above $112 a barrel as traders priced in the risk that the Strait of Hormuz, the channel through which roughly a fifth of the world’s oil moves, would close entirely (Bloomberg). For the better part of three months, it seemed that every headline and dinner conversation was about gas prices and the risk of a 1970s-style oil shock. That is System 1 doing its job: a threat appeared, and everyone reacted to it immediately. Then a ceasefire was announced, the strait partially reopened to traffic, and by June 30 WTI had settled back to $70 a barrel.

The crisis that dominated every conversation during April was, three months later, largely back to where it was before the crisis began.

The story almost no one watched

Memory chips required System 2, and that’s exactly why almost nobody engaged with the story. While oil was in the spotlight, a quieter commodity was undergoing a consequential repricing. According to Stanford University’s DRAM price index, the price of DDR4 memory rose from $2.665 per gigabyte on July 1, 2025 to $8.44 per gigabyte on July 1, 2026, an increase of more than 200% in a single year. This is not a niche input. Memory chips sit inside every smartphone, laptop, gaming console, and, most importantly, every server rack being built out for artificial intelligence. In response to the price increase, both Apple and Microsoft have announced price increase for iPhones,MacBooks and Xboxs.. Those are consumer-facing symptoms of a much larger story happening inside the data centers that the market has been paying up for.

What the data actually shows

My experience as an analyst and portfolio manager have taught me that the market’s System 1 and System 2 rarely agree on price for very long. The S&P 500 gained a strong 15.2% during the second quarter, and on the surface that reads like a straightforward AI-driven tech rally. The number that actually matters is what happened underneath it. Hyperscalers, the companies whose capital spending has anchored the entire AI narrative, are down 5% year to date on a price basis. Semiconductor companies, the ones that supply them, are up 46% over the same stretch (p. 11). The market rotated from the platforms to the picks and shovels this quarter, quietly enough that most headlines are still describing this as one trade instead of two.

The index itself closed the quarter at 7,499, trading at a forward P/E of 20.4x versus a 30-year average of 17.2x (p. 4-5). The Shiller P/E, which smooths for a full economic cycle, sits at 40.7x against a 28.8x long-run average. Markets are not cheap, and the reason they are not cheap has a name: concentration.

The 10 largest companies in the S&P 500 now account for 37.9% of the index’s market capitalization but only 33.7% of its earnings, trading at a forward P/E of 21.6x versus 19.6x for the other 490 companies.

For the first time, that top 10 list includes a memory chipmaker: Micron, alongside Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta, Tesla, Broadcom, and Eli Lilly. A company that spent most of the last decade as a commodity cyclical is now sitting at the table with the platform giants, and that seat was earned specifically because of the price dynamic described above.

The earnings numbers explain why the market rewarded semiconductor stocks and punished hyperscaler stocks this quarter. Semiconductor earnings are projected to grow 103% in 2026, up from 53% in 2025, while hyperscaler earnings growth is decelerating, from 41% in 2023 to an estimated 28% in 2026. Semiconductors now trade at 22.5x forward earnings and represent 19.2% of the S&P 500. That is a very high bar to clear.  Hyperscaler capital expenditures are projected to rise from $416 billion in 2025 to $758 billion in 2026, and to nearly $1 trillion by 2028 (p. 24), and that spending is the direct source of semiconductor demand. But memory chips are a direct line item in that spend, and a 200% cost increase on a core input does not disappear. It remains to be seen whether Hyperscaler will be able to increase prices or cut other expenses enough to maintain their profit margins.

International markets offered a reminder that the U.S. does not have a monopoly on returns. Non-U.S. equities are up 14.0% year to date versus 10.2% for the S&P 500, and emerging markets are up 24.0% (p. 43). Non-U.S. developed and emerging market equities continue to trade at a meaningful discount to the U.S., 31% below on a forward P/E basis versus a 20-year average discount of 20% (p. 46). Fixed income remains a reasonable ballast, with the U.S. Aggregate yielding 4.73%, up from 4.32% at year-end (p. 36).

One thing I’m watching

The mechanism I’m watching closely is a System 2 problem hiding behind a System 1 rally. Semiconductor earnings are priced for 103% growth in 2026, and that estimate assumes hyperscaler capital spending keeps accelerating at its current pace. But hyperscaler earnings growth has already decelerated from 41% in 2023 to an estimated 28% this year, and hyperscaler stocks are down 5% year to date, which tells me the market already has some doubt about how long that spending pace holds. Memory chips are the mechanism that could resolve that doubt in the wrong direction. If DRAM and NAND prices keep climbing at anything close to the pace of the past twelve months, hyperscalers face a real choice: absorb the cost through compressed margins, which slows the capex growth semiconductor earnings are counting on, or pass it through to customers, which raises the cost of the very AI services meant to justify all of this spending. Either path makes a 103% earnings estimate harder to hit. This is not a call to abandon technology exposure. It is a reason to ensure that exposure is diversified across the supply chain, including the companies that make the chips, and not concentrated solely in the platforms that consume them.

What this means for your accounts

Nothing about this quarter changes the shape of your plan. Diversification across large cap, international, and fixed income did its job when oil spiked in April and did its job again when it retreated. The memory chip story is a reminder of why we own the picks and shovels alongside the platforms, not a reason to chase either.

Your Market Analyst,

Tony

May 22
Love0

Here’s What the Ultra-Wealthy Are Worried About. Do You Agree?

By What Keeps the Ultra-Wealthy Up at Night

Key Takeaways:

  • Taxes—and the potential for rising tax rates—are on the minds of many wealthy investors.
  • Investors are also worried about how to best pass along their values and beliefs to the next generation.
  • Health concerns are top of mind for many investors—their own health, and the health of their spouses and parents.

Wealth can help people both avoid and address many challenges. But affluence doesn’t magically make all of life’s problems and worries disappear. Indeed, the wealthiest investors—the ultra-affluent, with a net worth of $25 million or more (not including personal residence)—studied by CEG Insights have a wide-ranging list of issues that concern them.

What’s more, a number of their concerns—about the state of the country, personal health, money and other key topics—may be on your own list of issues that weigh on you. To see how your concerns compare with those of the ultra-affluent—and for ideas on how to tackle those concerns effectively—read on for responses from 350 ultra-wealthy investors, summarized in the 2024 CEG Insights report, The $25 Million+ Investor.

Financial concerns

When focusing specifically on financial concerns, ultra-wealthy investors are apprehensive about inflation, the national debt, federal and state income tax hikes, stock market performance, and the possibility of a market correction. Wealthy millennials are particularly troubled by the prospect of rising state and federal taxes (see Exhibit 1). The very wealthiest investors—those with over $125 million of net worth—are the most concerned about market volatility, inflation and a potential market correction (see Exhibit 2).

Action step: Continually assess your portfolios, incorporating your concerns into your wealth management strategies throughout the process. Bring comprehensive tax planning services into your overall wealth plan, and create diversified investment portfolios to minimize risk exposure. Regular discussions with trusted advisors about these strategies and concerns may help ensure that your wealth management plan remains aligned with both your needs and market conditions.

National concerns

Ultra-wealthy investors are primarily concerned about inflation, the national debt, federal and state income tax increases, stock market performance, and potential market corrections. The political environment is the most significant social concern for wealthy investors. Older investors are more worried than their younger counterparts about political issues. Immigration policies, crime rates, the national debt and climate change are also major concerns for over two-thirds of the wealthy. Among investors, Gen Xers are the most apprehensive about these social issues.

Action step: Consider strategies to hedge against inflation and mitigate inflation risk in your portfolio. Also assess strategies aimed at navigating the uncertainties of the political landscape (particularly during election years).

Global and cybersecurity concerns

Cyberattacks, global relations and terrorism are major concerns for the ultra-wealthy, on the radar of approximately three-quarters of this demographic. Note that the most affluent investors are the most concerned about cyberattacks (see Exhibit 3).

Action step: Protect your financial information with the latest cybersecurity protocols—and ensure that your financial services providers are doing the same. Beyond implementing cutting-edge security measures, get educated on the importance of cybersecurity and the steps you and your advisors need to be taking to safeguard your assets.

In addition to addressing cybersecurity concerns, stay vigilant about ongoing global issues—including terrorism and geopolitical risks. You don’t have to make changes to your plan based on every development, but it can be helpful to understand what is going on in the world and how those events are impacting the financial markets.

Family and legacy concerns

Closer to home, wealthy households—especially millennial and Gen X households—are concerned about financing their children’s or grandchildren’s education. This isn’t surprising, given that many investors pursue advanced or graduate degrees, which can be costly. And households with higher levels of wealth aren’t eligible for financial aid, meaning they often pay full tuition costs—often upward of $60,000 a year.

Additionally, younger households with assets exceeding $25 million place high importance on passing down values to the next generation, leaving a legacy for their heirs and ensuring their pets are well cared for. Protecting assets in the event of a divorce is also critically important for these younger generations. It’s worth noting that even the wealthiest investors are critically concerned about many of these issues.

 

Action step: Tailor your financial plan to support your children’s and grandchildren’s educations (if this is a goal). Determine the most effective strategies to meet this objective, such as using tax-advantaged education savings plans like 529 plans.

Legacy planning is another critical component for wealthy families. Create a comprehensive estate plan that reflects your values and goals for the next generation, including—but not limited to—addressing your desire to leave a legacy, philanthropic efforts and even pet care.

Health concerns

Health issues—particularly their own and their spouse’s health—are important to more than two-thirds of the wealthiest clients. Another significant concern is the responsibility of caring for aging parents. Gen X investors are apprehensive about these issues, particularly the care of elderly parents. Additionally, millennial and WWII generation investors are concerned about spending their final years in a care facility (see Exhibit 6).

Action step: To address these concerns effectively, carefully examine the potential costs for long-term care, in-home services and specialized medical treatments. This knowledge can help you (and your advisors) develop more comprehensive financial planning that accounts for health care expenses and helps you prepare for potential caregiving responsibilities. Perhaps most important, be willing to openly discuss these issues. People often avoid these topics despite them being some of their greatest worries.

Social concerns

CEG Insights’ research found that WWII generation investors are more concerned than any other age group about immigration policies, with nearly 90% indicating it is a concern. They are less concerned than millennial and Gen X investors about the impacts of climate change, with 65.5% indicating it is a concern, compared with 81.1% of Gen Xers and 76.1% of millennials. Gen X investors are most concerned about crime rates (see Exhibit 7).

Action step: Consider how these developments may or may not impact your wealth going forward. Although societal challenges are ever present, financial markets historically have had a habit of climbing that “wall of worry” to new heights over the long term (although, of course past performance is no guarantee of future results). That said, strategies that are built around big-picture changes—such as ESG investing, as one example—may be worth considering based on your goals and other factors.

Conclusion

There’s a good chance you share some of these same concerns yourself, even if you have far less than $25 million in net worth. And if you’re not a member of the ultra-wealthy demographic, it’s likely that some of these issues aren’t high priorities for you.

Regardless, one of the most important things you can do is recognize the key aspects of your life—financial, health, social and otherwise—that you’re concerned about. Benchmarking yourself relative to the ultra-wealthy is one way to do exactly that. By knowing what’s on your mind, you can take steps aimed at addressing those areas and creating a more secure financial future.

 

VFO Inner Circle Special Report

By John J. Bowen Jr.

© Copyright 2026 by AES Nation, LLC. All rights reserved.

No part of this publication may be reproduced or retransmitted in any form or by any means, including but not limited to electronic, mechanical, photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees.

This publication should not be utilized as a substitute for professional advice in specific situations. If legal, medical, accounting, financial, consulting, coaching or other professional advice is required, the services of the appropriate professional should be sought. Neither the author nor the publisher may be held liable in any way for any interpretation or use of the information in this publication.

The author will make recommendations for solutions for you to explore that are not his own. Any recommendation is always based on the author’s research and experience.

The information contained herein is accurate to the best of the publisher’s and author’s knowledge; however, the publisher and author can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Advisory services offered through NewEdge Advisors LLC, a registered investment advisor. Anthony Baruffi is a registered representative of NewEdge Advisors LLC. Anthony Baruffi and NewEdge Advisors LLC are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.

 

Apr 10
Love0

The Upside-Down Swan Market

By State of the Markets - 1Q 2026

“If you remain calm in the midst of great chaos, it will eventually subside.” Julie Andrews

People often describe how complex systems function using the analogy of a swan. Above the water, it glides along effortlessly—calm, composed, and elegant. Beneath the surface, however, its feet are kicking furiously in all directions, a hidden chaos driving that smooth motion.

Today’s markets feel like the exact opposite.

At first glance, everything appears unsettled. Headlines are dominated by geopolitical tensions—from Ukraine to the Middle East—along with concerns about cracks forming in private credit and growing skepticism around the scale and sustainability of AI-related investment. The narrative is noisy, uncertain, and at times, outright unsettling.

Yet beneath the surface, the underlying fundamentals remain relatively steady.

The labor market, while showing signs of cooling, remains healthy with unemployment still low by historical standards at 3.7% as of early 2026.

Corporate earnings, perhaps most importantly, continue to grow at a solid pace, with S&P 500 earnings expected to reach approximately $320 in 2026, representing double-digit growth driven by both revenue expansion and stable margins.

This helps explain the seemingly counterintuitive outcome for the quarter: despite the volume of negative headlines and some sectors of the market being down, portfolios as a whole were relatively unchanged.

The one area that we are keeping our eye on is consumer spending.  Real consumer spending has held up well recently and has grown at well over 2.5% over the last three years.  If inflation remains elevated, it could reduce consumers’ real incomes and lead to lower consumer spending.

Equities – Strong Fundamentals, Full Valuations

U.S. equities continue to be supported by earnings growth, but valuations are no longer cheap. The S&P 500 currently trades at approximately 19.7x forward earnings, modestly above its 30-year average of 17.2x.

This places the market in a range where future returns are likely to be more muted and increasingly dependent on continued earnings delivery rather than multiple expansion.

Importantly, market concentration remains elevated. The top 10 companies now represent roughly 38% of the S&P 500’s market capitalization. While these companies have delivered strong earnings and performance, this level of concentration introduces both opportunity and risk. A narrow leadership group can sustain markets, but it also increases vulnerability if leadership falters.

The influence of the “Magnificent 7” remains significant, accounting for a large share of returns in recent years, though 2026 has shown some early signs of performance dispersion.

This may indicate a gradual broadening of market participation—something that would be constructive if sustained.

At the same time, the AI investment cycle continues to accelerate. Capital expenditures from major hyperscalers are projected to rise dramatically—from under $100 billion in 2020 to over $800 billion by 2028. While this supports earnings growth in the near term, it also raises a key open question: when and how these investments translate into durable returns.

Inflation – Normalizing, but Energy Prices complicate the picture

Inflation has continued to normalize, with headline CPI declining to approximately 2.4% year-over-year as of early 2026, a significant improvement from the 9% peak in 2022 (page 22). However, progress has become more incremental, particularly in services-related components. The war in Iran has caused spot oil prices to rise dramatically, but interestingly, the bond market has shown muted concern, with 10-year Breakeven Inflation rates still close to historical averages.

The Federal Reserve now faces a more nuanced challenge. With inflation closer to target but growth slowing, policy is likely to remain cautious. Market expectations suggest a gradual path for rates rather than an aggressive easing cycle.

Fixed Income – Income Returns to the Forefront

One of the more notable shifts in the current environment is the re-emergence of income in fixed-income markets. The U.S. Aggregate Bond Index now yields approximately 4.6%, which historically has been a strong predictor of forward returns—implying roughly mid-single-digit annualized returns over the next five years. Credit markets remain relatively well-behaved. Spreads are below long-term averages, and default rates, particularly in high yield, remain contained. This suggests that, for now, markets are not pricing in a significant deterioration in economic conditions.

Global Markets – Divergence Persists

Outside the U.S., performance remains mixed. While some emerging markets have shown resilience, developed international markets continue to lag, and structural challenges—particularly in China—persist.

Valuations outside the U.S. remain more attractive on a relative basis, but this discount has been persistent for years and reflects differences in growth, profitability, and sector composition.

Currency dynamics also remain an important driver. The U.S. dollar has been relatively stable, supported in part by interest rate differentials, though this remains a variable to watch.

Private Markets and Structural Trends

Two structural trends are worth highlighting.

First, the continued growth of private markets. The number of publicly listed companies has declined meaningfully over time, while private capital—particularly private credit—has expanded significantly. This shift has implications for liquidity, transparency, and risk dispersion across the financial system.

Second, the increasing role of AI—not just as a market theme, but as a broader economic driver. Adoption rates across industries continue to rise, and capabilities are advancing rapidly. While the long-term impact is likely significant, the near-term investment implications remain uncertain.

In summary, the markets present the following picture:

  • Solid economic fundamentals
  • Strong corporate earnings
  • Elevated but not extreme valuations
  • Persistent geopolitical and macro uncertainty

The consensus view is that the economy is moving toward a soft landing. We would assign a moderate probability—approximately 60–70%—to this outcome. However, there remains a meaningful risk (20–30%) that the lagged effects of higher interest rates lead to a more pronounced slowdown. A smaller probability (10–15%) exists that inflation proves more persistent than expected, keeping short rates elevated and leading to a deeper economic slowdown.

From a portfolio perspective, this is an environment where discipline matters more than prediction.

Markets may continue to appear chaotic on the surface, but as with the inverted swan analogy, the underlying drivers remain more stable than headlines suggest. Earnings, income, and diversification—not short-term narratives—continue to be the primary determinants of long-term outcomes.

As always, we appreciate your continued trust and partnership. Please do not hesitate to reach out with any questions.

 

 

Sources: J.P. Morgan Guide to the Markets (as of March 31, 2026), Federal Reserve Bank of St Louis via FRED, Bureau of Labor Statistics vis FRED,

Jan 15
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What to Do if You Become a Victim of Identity Theft

By Identity Theft

Advice from a Wealth Manager Who Has Experienced It Firsthand

As a wealth manager, my job is to help protect my clients’ wealth — not just from market risk or taxes, but from the very real and growing threat of identity theft. Unfortunately, this is not just professional advice I’m sharing — it’s personal. I’ve lived through identity theft myself, and I can tell you, it’s not just an inconvenience. It’s a violation that affects your finances, your sense of security, and even your peace of mind.

If you ever find yourself in this position — whether it’s fraudulent unemployment claims, unauthorized credit cards, or someone impersonating you — here are the critical steps you need to take immediately.

Step 1: File a Police Report

Your first call should be to your local police department’s non-emergency line to file a police report. This creates an official record of the crime — something creditors, financial institutions, and even credit bureaus may request as you work to clear your name.

Be sure to keep the case number they provide you. You’ll need this for the next steps, especially when placing fraud alerts with credit agencies.

Step 2: Notify Your Financial Institutions

Next, alert every financial institution you work with — banks, credit card companies, investment custodians, and even lenders. Let them know you are a victim of identity theft and ask them to flag your accounts for suspicious activity.

In some cases, you may want to request new account numbers or additional security measures like verbal passcodes when calling in.

Step 3: Report Unemployment Fraud (If Applicable)

If someone has fraudulently filed for unemployment benefits in your name — a common scheme I’ve seen — you’ll need to report this directly to your state’s Employment Security Department. Each state has its own process, and acting quickly helps prevent the payment from being issued in your name.

For quick reference:

Step 4: Review Your Credit Reports

This is critical. You need to review all three of your credit reports — from Experian, Equifax, and TransUnion — to check for any accounts, loans, or inquiries you don’t recognize.

The good news: you can get your credit reports for free at www.annualcreditreport.com. I recommend making this review part of your regular financial routine, even if you’re not a victim.

Step 5: Place Fraud Alerts on Your Credit File

Contact each of the three major credit bureaus and request a fraud alert on your file. This tells creditors to take extra steps before issuing credit in your name. It’s free and lasts for one year, with the option to extend if needed.

Here’s where to place fraud alerts:

Step 6: Freeze Your Credit (Optional but Highly Recommended)

If you want an even stronger layer of protection, you can freeze your credit with all three bureaus. A credit freeze completely locks down your credit file, making it impossible for anyone — including you — to open new accounts until you temporarily “thaw” the freeze.

It’s free to place and lift a freeze, and most credit bureaus offer easy-to-use tools to manage the process. Just be sure to keep your passwords in a safe place — you’ll need them if you apply for a mortgage, car loan, or any other type of credit in the future.

Step 7: Report the Theft to the Federal Trade Commission (FTC)

Finally, file a report with the Federal Trade Commission at www.identitytheft.gov. This creates an official record at the national level, and the site offers a wealth of resources to help you recover your identity.

Your FTC Identity Theft Report can also be used to help dispute fraudulent accounts with creditors and credit bureaus.

Final Thoughts — From Someone Who’s Been There

I know firsthand how overwhelming this process feels. When I discovered my own identity had been stolen, I felt a mixture of anger, confusion, and vulnerability that’s hard to describe. I also know that acting swiftly and decisively made all the difference in minimizing the damage.

As your wealth manager — and as someone who’s walked this road — my advice is this:

  • Be proactive. Review your credit regularly and set up monitoring alerts so you can catch issues early.
  • Be organized. Document every step you take — every call, email, and case number.
  • Be patient. Recovery is a process, not a single phone call.
  • And don’t be afraid to ask for help. Whether it’s your advisor, an attorney, or a trusted identity theft resolution service, having a professional advocate in your corner can make a world of difference.

If you’ve been impacted — or if you just want to know how to protect yourself before it happens — please reach out. This is part of what I do for clients every day, and I’m always happy to help.

Your wealth is important — and so is your identity. Let’s protect both.

Jan 07
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2025 Year-End Markets Overview and Outlook

By 2025 Year-End Markets Overview and Outlook

Markets have a way of humbling consensus views. Entering 2025, many investors expected a narrow path to returns—led once again by a small group of U.S. stocks, with little help from bonds or international markets. Instead, the year delivered something different: strong absolute returns, broader participation across regions, and a re-emergence of diversification as a meaningful contributor to results. It was a reminder that market leadership does not move in straight lines—and that patient, diversified investors are often rewarded when expectations are most one-sided.

U.S. Equities: Strong Results, Higher Expectations

U.S. stocks delivered another solid year. The S&P 500 finished 2025 at 6,846, generating a 17.9% total return per Bloomberg. Economic growth remained resilient, inflation continued to cool, and corporate earnings proved more durable than many had anticipated.

At the same time, optimism became increasingly reflected in prices. The S&P 500 ended the year trading at a forward price-to-earnings ratio of 22.0x, well above its 30-year average of 17.1x.

Valuations are not a reliable guide to short-term market movements, but they do matter over longer horizons. Historically, starting valuations have shown a much stronger relationship with five-year forward returns than with one-year results.

Market concentration remained elevated. The ten largest companies now represent roughly 40.7% of the S&P 500, near historical extremes.

The “Magnificent 7” again accounted for a disproportionate share of returns—about 46% of index performance in 2025—reflecting their scale, profitability, and earnings momentum.

Much of this dominance has been reinforced by the extraordinary surge in capital spending related to artificial intelligence. The largest U.S. technology companies are at the center of a massive investment cycle, committing hundreds of billions of dollars toward data centers, semiconductors, cloud infrastructure, and AI model development. Planned capital expenditures by the major AI hyperscalers have grown at a staggering pace and are expected to continue rising over the coming years.

This level of investment has naturally fueled investor enthusiasm around AI’s long-term potential, but it also raises reasonable questions about returns on invested capital. In 2025, investors periodically expressed concern around whether some companies—such as Oracle and Meta—would ultimately earn attractive returns on this spending, leading to periods of volatility. Even so, the data make clear that capital markets remain willing to fund this investment cycle, with AI adoption broadening across industries and corporate spending on AI tools continuing to accelerate.

As with past technology cycles, the long-term winners are likely to be those companies that can translate scale and innovation into durable cash flows, rather than simply the largest spenders.

Corporate fundamentals, however, remain supportive. Profit margins reached approximately 13.9% in the third quarter, well above long-term averages, and earnings expectations for 2026 remain constructive. Still, margins at these levels leave less room for error should growth slow or costs rise.

International Equities: A Long-Awaited Broadening

One of the most important developments of 2025 was the return of international equity leadership. Markets outside the U.S. did not simply perform well—they meaningfully outperformed U.S. equities despite strong U.S. returns. The MSCI All Country World ex-U.S. Index gained 32.39% in 2025 per MSCI, far exceeding the S&P 500’s advance.

This was notable because international equities outperformed the U.S. during a year when U.S. stocks themselves delivered strong, above-trend returns. Rather than a rotation away from U.S. assets, 2025 reflected a broadening of opportunity.

Valuations played an important role. International equities entered the year trading at a 30–40% discount to U.S. markets, a gap that remains wide by historical standards. Over the past decade, U.S. equity returns have benefited significantly from rising valuation multiples, while international returns have relied more on earnings growth, dividends, and currency movements. In 2025, those factors aligned more favorably outside the U.S.

Performance varied by region. Japan benefited from improved corporate governance and earnings momentum; Europe saw strong gains in the banking sector as growth stabilized; and emerging markets experienced strength in countries such as China, India and Taiwan. A weaker U.S. dollar further supported international returns, consistent with historical periods of non-U.S. outperformance.

For long-term investors, 2025 served as a reminder that international markets can play a meaningful role—not only as diversifiers, but as contributors to returns.

Fixed Income: A More Familiar Role Returns

After several challenging years, fixed income regained its footing. The 10-year U.S. Treasury yield ended the year near 4.2%, and the yield curve moved back into modestly positive territory following a prolonged inversion.

The Federal Reserve signaled that policy rates are likely to trend gradually lower over time, toward a long-run level near 3.0%, assuming continued progress on inflation. Credit markets remained healthy, with investment-grade and high-yield spreads near the lower end of historical ranges and default rates well contained.

Just as importantly, starting yields matter once again. With the Bloomberg U.S. Aggregate yield near 4.3%, history suggests five-year annualized returns in the 4–5% range, a meaningful improvement compared with much of the past decade.

Looking Ahead

The experience of 2025 reinforces several principles that continue to guide our approach:

  • Strong markets can coexist with rising valuation risk
  • Market leadership can remain concentrated longer than expected—but eventually broadens
  • Diversification often proves most valuable after periods when it has been least rewarded
  • Fixed income once again plays a meaningful role in balanced portfolios

As we look ahead, we remain focused on building portfolios that balance participation in growth with discipline around valuation, quality, and risk management. While short-term market outcomes are inherently unpredictable, history continues to favor patient investors who stay diversified, remain disciplined, and avoid reacting to headlines.

We are grateful for the trust you place in us and look forward to navigating the opportunities and challenges ahead together.

Nov 18
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Women, Retirement and Longevity

By Retirement

Funding a comfortable retirement has the potential to be a challenging process for anyone. But women, in particular, are especially likely to confront a number of financial risks during their 60s, 70s and beyond. The main reason: Women have a well-established history of living longer than men as well as building less wealth than men over their lifetimes. That one-two punch can make retirement feel like a bit of a minefield for many women—even those with significant wealth.

The good news: There are steps women can take that can potentially put them in a better position for retirement.

Women face some unique hurdles that make their march toward retirement that much steeper. For example:

Women live longer.

Women live almost six years longer than men, on average, to age 79 versus 73½ years old, respectively, according to the Centers for Disease Control and Prevention. The CDC has also forecast life expectancy at birth for women in 2019 at 81.4 years, versus 76.3 years for men. But at age 65, women are likely to live nearly another 21 years compared to men’s additional expected 18 years.

What’s more, affluent women tend to live even longer. One study found that women in the top 1% were expected to live to 88.9—10.1 years longer than those in the bottom 1%. Those extra years can boost the odds of women both running out money and spending some of their retirement years without a partner for support.

Living longer may lead to spending more money on health care. More than 70% of assisted living residents are women, and over half of nursing home residents are female, according to statistics compiled by Zippia.

Women build less wealth.

Women’s financial health is also generally less sound than men’s. U.S. Census Bureau data shows that just 22% of women have $100,000 or more saved for retirement, while 30% of men do. What’s more, U.S. women are projected to reach retirement with just 75% of the wealth accumulated by men, according to Willis Towers Watson.

This disparity can lead to some alarming outcomes. For example, women 65 and older are 80% more likely than men of the same age to be living in poverty, according to The National Institute on Retirement Security.

If you have significant assets, you may not be likely to become impoverished, of course. But the research highlights the risks that women, in particular, face when it comes to having adequate funds to live a comfortable lifestyle in retirement.

STRATEGIES TO CONSIDER

Some of the biggest systemic challenges for women—such as the gender pay gap—won’t likely be solved overnight. The good news is that a successful retirement is possible for women who harness these various strategies:

  1. Plan for a multistage retirement. The facts point to women in general living longer than men. Therefore, heterosexual women with a partner should consider what retirement will look like as part of a shared journey and, later, as a solo voyage. Each stage may have different financial requirements and costs as well as other issues to navigate. The solo stage, if it occurs, is likely to be more expensive and complicated as you age and potentially face increased health care costs and responsibilities you’ll need to address on your own instead of with a partner. Planning for a multistage retirement should involve honest discussions about investing and spending—as well as wishes and needs—with advisors, family members and others who might one day be involved in helping with caregiving.
  1. Get involved—and stay involved—with family finances. If you’re not already, look to be an active partner in investment decisions and other financial matters. That might mean learning more about aspects of financial planning and retirement spending (from your advisor, books, adult ed classes and other resources), as being financially literate can be crucial in making wise, confident decisions about wealth—or even simply understanding actions that people may want to take on your behalf.
  1. Work smarter. If you work, look for ways to increase your take-home pay. One idea is to job hop. Pew Research found that 60% of workers who changed jobs saw an increase in their real earnings, versus only 47% of those who remained with the same employer. Staying in the workforce for a longer period of time is another way to potentially arrive at retirement with more money saved up. It could also help you build up additional Social Security credits that result in more retirement income.

Another advantage to working longer: People with “post-retirement” jobs related to their previous careers reported better mental health than those who fully retired, according to research published in the Journal of Occupational Health Psychology.

  1. Allocate more money to retirement savings. An obvious move—one that could be easier said than done, of course—is to set aside more money in retirement-focused accounts. That might mean putting more into a 401(k) or Roth IRA, or a health savings account designed to help fund health care expenses. There are also spousal IRAs, which let a working partner open an IRA for a nonworking spouse to save for retirement. Consult with a professional about the rules, benefits and risks of any retirement savings option you’re considering.

Conclusion

Retirement can present some unique and tough challenges for women. But there are plenty of ways you can increase the likelihood of living the lifestyle you desire and remaining in healthy financial shape throughout your golden years.

 

ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2025 by AES Nation, LLC.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Advisory services offered through NewEdge Advisors LLC, a registered investment advisor. Anthony Baruffi is a registered representative of NewEdge Advisors LLC. Anthony Baruffi and NewEdge Advisors LLC are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report.

Nov 05
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High Earners Face New Limits on 401(k) Catch-Up Contributions

By Changes to 401(k) Catch-Up Contributions

Originally published in The Wall Street Journal, September 24, 2025, by Ashlea Ebeling

What’s Changing

Starting in 2026, workers age 50 and older who earn more than $145,000 will no longer be able to make pretax catch-up contributions to their 401(k) plans. Instead, these contributions must be made on an after-tax basis into a Roth 401(k).

Key points:

  • The IRS finalized rules from a 2022 law mandating Roth-only catch-up contributions for high earners.
  • The income threshold is $145,000 in wages (indexed to inflation).
  • For those 60–63, the “super catch-up” of up to $11,250 will also fall under the Roth-only mandate if income exceeds the threshold.
  • Savers without a Roth 401(k) option could lose access to catch-up contributions entirely.
  • Pretax deductions will be lost—e.g., someone in the 35% bracket forfeits nearly $4,000 in tax savings on an $11,250 catch-up contribution.
  • This change could also increase taxable income, phasing out other deductions and potentially pushing some into higher tax brackets.

Why It Matters for High Earners

While the loss of upfront deductions may feel like a setback, Roth contributions bring long-term advantages:

  • Tax-free growth and withdrawals in retirement.
  • Diversification of tax exposure—balancing pretax, Roth, and taxable accounts.
  • Protection against rising future tax rates, since taxes are paid now.

Employers are rapidly adding Roth options to plans, but if yours does not, catch-up contributions may disappear until it does.

Recommendations for High-Earning Clients

To ensure you remain on track for a tax-efficient retirement:

  1. Confirm your plan offers a Roth 401(k). If not, encourage your employer to add one—most large providers already do.
  2. Review contribution strategy now. Consider gradually shifting a portion of regular 401(k) savings to Roth, not just the catch-up.
  3. Balance across account types. Maintain a mix of pretax, Roth, and taxable savings to provide flexibility in retirement withdrawals.
  4. Evaluate income thresholds. If you are close to $145,000, planning compensation and deferrals carefully could preserve pretax catch-up eligibility in certain situations.
  5. Coordinate with tax planning. Since Roth contributions increase adjusted gross income, review the potential impact on phaseouts of deductions and credits.

At Baruffi Private Wealth, we view this change not as a loss but as an opportunity to strengthen long-term retirement planning. By embracing Roth strategies, high earners can build a more resilient and tax-efficient income stream for the future.

Oct 09
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In the Flow

By State of the Markets - 3Q 2025

When an athlete is performing at their highest level, it is often said that they are “in the zone” or “in the flow.” This state of complete focus and harmony—where effort feels effortless—is a goal pursued by professionals and weekend athletes alike. Legendary figures such as Kobe Bryant, Serena Williams, Tom Brady, and Mikaela Shiffrin are renowned for consistently reaching this state. Teams, too, have experienced it—think of the 1985 Chicago Bears, the Boston Red Sox of the 2000s, or the Red Bull Formula 1 team. (With some luck, perhaps the 2025 Seattle Mariners will one day join that list.)

At the risk of tempting fate, financial markets over the past quarter have also seemed to find their rhythm. Every major sector delivered positive returns, with markets rewarding good news and, for now, brushing off less favorable headlines. While this kind of synchronized momentum is encouraging, we know from both sports and markets that staying “in the flow” is not a permanent state.

U.S. Equities – Strong Earnings and AI Momentum

As of October 1, the S&P 500 reached a record high for the 29th time in 2025, even briefly moving above 6,700. The positive returns were underpinned by solid fundamentals: second-quarter operating earnings rose 10.55% year over year, according to Standard & Poor’s.

Growth companies led the way, with the Vanguard Growth ETF up 12.50% in the quarter. Value-oriented companies and small caps also advanced, though more modestly, at 6.85% and 3.50% respectively. Investors continue to reward companies tied to artificial intelligence, though the question of when those substantial investments will begin to deliver measurable returns remains open.

International Equities – Positive but Uneven

International markets also contributed to gains. Emerging markets climbed 10.11% for the quarter, and Asian developed markets advanced 7.62%. European equities trailed these regions but still managed a respectable 3.24% return.

While the breadth of international gains is encouraging, regional performance continues to diverge, underscoring the importance of diversification and careful allocation.

Fixed Income – Support from the Fed

Bonds also enjoyed a strong quarter. Signs of a softer labor market, combined with steady inflation, prompted the Federal Reserve to lower short-term interest rates by a quarter point in September. Yields moved slightly lower, and both corporate bonds and mortgage-backed securities outperformed U.S. Treasuries, helped by healthy corporate balance sheets and reduced volatility in interest rates.

Economy – Growth Signs Mixed

Consumers, for the most part, looked past tariff-related concerns, as many companies absorbed costs rather than passing them along. Still, revisions to labor data raised new questions: the Bureau of Labor Statistics cut its estimate of 2024 job growth by more than 900,000 positions. Forecasts for job growth in 2025 are trending below 2024 levels. Consumer spending, however, has remained resilient. High-income households, which account for over half of all consumer spending, continue to support economic activity. Whether this spending power can offset broader labor market weakness is a key trend to monitor.

Looking Ahead – Staying in Rhythm, Aware of the Clock

Corporate profits continue to expand, consumers remain willing to spend, and businesses are investing for future growth. Technology continues to dominate headlines and portfolios, with the ten largest companies in the S&P 500 now representing more than 40% of the index’s market capitalization. Such concentration highlights both the power of innovation and the importance of vigilance.

The overall backdrop remains constructive: inflation is moderating, interest rates have eased slightly, and spending is steady. Yet, just as an athlete cannot stay in the flow forever, markets eventually face disruptions. For now, the momentum is intact—but we remain mindful that the positive fundamentals that have led to this virtuous cycle will change over time.

As always, we appreciate your trust and partnership. Our focus remains on helping you navigate markets with clarity, discipline, and perspective. Please don’t hesitate to reach out with any questions.

 

Source: JP Morgan, Bloomberg.com, Bureau of Labor Statistics, and https://investor.vanguard.com/Vanguard