Video Update - Our Post-Thanksgiving Investing Strategy

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As we return from the Thanksgiving break, the market landscape presents an interesting dichotomy between current optimism and underlying fundamentals. While the S&P 500 maintains its upward trajectory and enthusiasm builds for 2025, prudent investors should consider the broader context of current valuations and market dynamics.

Market Valuation Concerns

The current CAPE ratio warrants attention, having reached levels exceeded only by the Internet bubble. While compelling arguments exist around AI growth potential and the low interest rate environment, we cannot overlook that the broader market is essentially priced for perfection. This creates a potentially vulnerable environment as we approach 2025, particularly given the complex interplay of proposed policy changes and geopolitical factors.

Fixed Income Signals

The bond market continues to provide a more tempered perspective, expressing ongoing concerns about inflation persistence and potential tariff impacts. Recent trading patterns, including last week's rally, may reflect short-term factors such as holiday dynamics rather than fundamental shifts in outlook.

Inflation Reality Check

While headline inflation has moderated to 2.8%, it's crucial to recognize that prices have risen approximately 22% since January 2020. This cumulative impact remains significant, particularly given that current moderate inflation readings benefit from relatively subdued energy and grain prices - a situation that may not persist indefinitely.

Strategic Portfolio Addition

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