Trump Is Bold But Liquidity Is A Coward

McAlvany Weekly Commentary

Interest Rates Rise In Worldwide Competition For Liquidity Mag 7 Stocks Represent 70% Of Trading Volume Gold & Dollar Rise In 2024, What Does That Mean? "Yeah. I mean, breadth is the idea of how spread out the participation is in a market move to higher levels. Are all boats rising with the tide or just a few? And when you have narrow breadth, it's just a few names participating. It's not a good sign when breadth is narrow in only a few names. 70% of trading volume in seven names, 20% of global market cap, breadth this narrow is, to say the least, worrying." - David McAlvany Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick, along with David McAlvany. Well, David, where the holidays fell this year—Christmas on a Wednesday, New Year's on a Wednesday—with my travel plans, with my kids' travel plans, I honestly feel like, well, happy New Year. It feels like the holiday was about a month. It was wonderful. It was wonderful. But gosh, it's sort of nice to be back in the pattern. David: It is good to be back. I love the holidays. I love the guests and hosting parties. I love the family time and the change of pace. And I love getting back to routines as well. As the new year starts, there are the common reflections on the past year and anticipations or goal setting for the new year. And everybody has prognostications of what will be in 2025. I feel this with clients, the number of requests to do financial planning reviews, how are we doing. It increases dramatically in the first quarter. And I encourage you to do that as well. The next four years are likely to have surprises geopolitically, economically, and in the financial markets. And I think getting your bearings is a good idea. So whether it's a quick look at how you're balancing liquidity, precious metals, growth and income assets, real estate, or factoring in new situations like retirement, a new job, other new variables, our staff are a great resource to bring perspective and counsel. Kevin: Well, and you know, Dave, I dream triangles. Okay? I love the triangle, the foundation, the preservation element, and then of course the left side, which has to do with growth and income, and the right side, your cash savings. And that's what I encourage my clients to do. I have, I think, trained— We talk about habits and how you can train yourself in habits. You can also help train others to have good habits. I've been really thinking about this. One of the great habits of what we've done is we draw triangles and we do that analysis, the how-we-are-doing analysis. So that's what I would encourage our clients to do too. I've got my clients calling me right now and saying, "Hey, let's do a triangle update." David: Yeah, I think probably the underemphasized portion of the perspective triangle for most investors is the metals piece. We think of it as insurance, that's the role that it plays in an overall portfolio. From a practical standpoint, it's there as a reserve. And you don't know you need the reserves until you need the reserves. We're watching a lot of currency volatility, 2024, and that's a big question. When do these countries who are defending their currency, supporting their currency with tens of billions of dollars, sometimes in a week, when do they run thin on reserves? That's when you end up with real currency crisis. You can get through any kind of crisis—whether it's an emotional crisis, a spiritual crisis, a family crisis, a financial crisis—if you're adequately reserved, and I think that's worth taking stock of. Kevin: You know, Dave, that's a great point as far as reserves emotionally, spiritually, financially. I remember I was walking out to the car the other day, and sometimes in the first of the year I can also feel a heaviness. It's like, "Wow, what have I got to do this year? There's things I've got to do." I felt this heaviness, and I realized I had forgotten to be thankful.