It’s very tempting to chase AI and “Mag 7” gains, but your long-term returns are ultimately determined by the price you pay. With the S&P 500 trading near 25x forward earnings and the Shiller CAPE ratio flashing warnings similar to the 2000 dot-com bubble, the market is lofty territory. History is clear: investing at such elevated valuations drastically lowers subsequent 5 and 25-year returns. While FOMO is powerful, be cautious. As a long-term investor, focus on the risk of what you could lose, not just what you might miss
GOOG
Actionable market insights delivered to your inbox weekly
Uncertainty Weighs
It doesn’t take much these days to knock investors off balance. This week it was Trump’s 25% on auto tariffs and a slightly hotter-than-expected inflation print. Tariffs are inflationary… a tax on the consumer. And with (services) inflation remaining stubborn… it gives the Fed very little wiggle room to cut rates. In combination with various geopolitical developments and aggressive government spending cuts from the Department of Government Efficiency (DOGE) – this has pushed policy uncertainty to its highest levels since late 2020.