Enlightenment - A Herold & Lantern Investments Podcast

When The Past Warns The Market About Tomorrow

• Keith Lanton • Season 8 • Episode 1

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January 5, 2026 | Season 8 | Episode 1

We unpack the shock capture of Nicolás Maduro, why refiners rallied on heavy crude math, and how history’s forgotten shocks can sharpen today’s market judgment. Then we map 2025’s finish, 2026 scenarios, and concrete income ideas that balance risk and yield.

• geopolitical signal from Maduro capture and market reaction
• refinery advantage from Venezuelan heavy crude
• currency and bond moves across Latin America
• lessons from Panama and Black Tom for risk perception
• 2025 performance recap and 2026 return scenarios
• futures, commodities, gold and volatility read
• macro calendar: ISM, JOLTS, payrolls, sentiment
• Venezuela reserves and oil price paths near and long term
• energy positioning: refiners, services, midstream
• Charles Schwab’s pivot, earnings drivers and growth lanes
• income strategies: dividend ETFs, pipelines, REITs, BDCs, bonds

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** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.

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Alan Eppers:

And now introducing Mr. Keith Lanton.

Keith Lanton:

Good morning. Today is Monday, January 5th. Wishing everyone a healthy, happy, and prosperous New Year. Today is our first discussion of 2026. And we certainly got off to a not a not a start that lacked in headlines as we come into the office here this Monday morning following a relatively quiet in the financial markets New Year's week as we start thinking about what our goals and plans are for 2026. We have some new information to factor into our thinking, and we'll certainly talk about the events over the weekend. U.S. capture of Nicholas Maduro in Venezuela, bringing him back here to the United States to stand trial, and we'll talk about the implications that may or may not have in financial markets and what that may or may not mean for your individual portfolio and your investing as we move forward. We will talk about that. We'll talk about history and how history is critically important to understand, not because the goal is to look backwards and say, hey, this is what happened, but to look backwards and understand that the present has been shaped by the past and how that can help us make more intelligent decisions going forward with respect to our lives, and you know what we're really focused on primary primarily here is how studying the past can help us make more intelligent investment decisions. And then we'll talk about financial markets performance in 2025, what we may expect in 2026. Barron's talking about their income ideas for 2026, they've done a good job in 2025, so we'll hear what they have to say about 2026 for those who are looking for some income in their portfolios in order perhaps to give some ballast where the best places to look might be here in 2026. So as we get started this morning and we talk about the events over the weekend, we be mindful that after the after the apprehension of Nicholas Maduro, this follows some of the large geopolitical players here in the world stage. The Russians started perhaps with the greatest aggression and the changing of the stability that we had largely seen from the major powers of the world when when they invaded Ukraine in 2022. We saw the world's reaction to that, and we saw a perhaps a different tone from clearly the world's most powerful country, , the United States, when President Trump assumed office in 2025. And now we have the United States taking unilateral action against a dictator here in Venezuela, and the questions that now come to mind aren't so much what does this mean today as what does this mean going forward? Does this mean that the United States will be more aggressive in taking out other leaders perhaps in Cuba, as Marco Rubio is referred to as a potential next target? We saw Stephen Miller ate to President Trump, his wife posting on X that perhaps Greenland will be soon. That would be something that potentially could really try the the alliance we have with the European countries and NATO. And , of course, the continuous giant elephant in the room is what does this all mean? What is the message to China with respect to the Indo-Pacific region, and specifically with respect to Taiwan, and what are their thoughts with respect to these actions. So we wake up today to a world where we face perhaps even more geopolitical uncertainty after the capture of President Maduro. This is a move that could potentially unlock Venezuela's oil reserves. We'll talk about what this may mean for oil prices and could boost risk assets over the longer term, has the potential to weigh on sentiment as things settle in. We are seeing this morning that U.S. refiners' shares are moving higher. These are the companies that process oil. The reason for that is why U.S. refined why are U.S. refining stocks moving higher? Well, the refineries that were built here in the United States, specifically built along the coast, the Gulf Coast, California, they were largely built to process heavy crude. And heavy crude is predominantly drawn out of the ground in Venezuela. The oil that we that we produce here in the United States as a result of fracking tends to be a lot less viscous, a lot less, a lot less thick. And therefore, we can't, in the current refineries that we have here in the United States, by and large, we can't refine that oil. The refineries are actually built here to refine lots of Venezuelan oil. So the potential to have this heavy oil now have access to it is something that could be a big benefit to the refiners here in the United States, which can't refine a lot of the oil that we have. Interesting fact is that the United States imports six million barrels of oil a day, even though we produce so much oil, and we export four million barrels a day. And that is largely because of the fact that we can't refine this oil. So there is a strong business component and a benefit to the refiners here. Also, a big stock that may be a beneficiary is Chevron, which is still operating in Venezuela, so potential that Chevron could see an increase in the business that they're doing there in Venezuela. And Chevron is up significantly this morning, as well as Halliburton Slumberger, the companies that are the facilitators or the infrastructure builders of oil and gas assets. Venezuela's leader Nicolas Maduro is doing New York court to face drug charges while the UN is scrutinizing the legality of U.S. President Trump's extraordinary operation to capture him. The Colombians, with support of the Russians and the Chinese, are requesting a U.N. Security Council meeting that is taking place today in New York. There are jitters in Latin America. The Mexican peso is the worst performer among major currencies, weakening about three-quarters of one percent against the dollar after President Trump said the U.S. will have to do something about the flow of drugs from the country. Investors are also keeping an eye on the Colombian peso after the U.S. President said the country's leader has to watch himself, and that's the leader of Colombia, Petro. Venezuelan bonds, poised again, defaulted notes from the sovereign country of Venezuela and state-run oil company, which is PDBSA, they have more than doubled from to between 22 and 33 cents on the dollar in recent months, and a potential debt restructuring could potentially fuel further advances. Now I mentioned that in order to understand the present, we have to look and study the past. We've been talking about that the last several weeks, and we looking back at the past, some of us who are a little bit older may remember the 1989 U.S. invasion of Panama, where the United States sought out Manuel Noriega, has some parallels to what's happening today with Nicholas Maduro seeking Manuel Noriega on drug charges, just like we're seeing today, a little bit of a rhyme here with with Maduro. And we've seen other interventions by the United States and Latin America in recent years, involvement in the coup in Chile in the 19 seventies and involvement in the politics of other Latin American countries. But once things fade from memory and they aren't something that have been experienced in the lifetime of those who are living, very often the history is f is forgotten, or at least largely out of the mindset of the of the majority of the people within within the nation. And as a reminder that that history does frequently repeat itself and we can learn a lot from history, bring you back to an incident that happened a long time ago, and one that when we asked the question of what was the first significant terrorist attack on US soil, specific to an attack in the tri-state area near New York City. What was that big attack that happened that that was the first big attack that happened in in the United States, specifically in New York City? Most people might say the the horrible events of nine-eleven. Some may say, oh, the first attack was actually in 1993 when when they first the middle when the when they first tried to blow up the terrorists first tried to blow up the World Trade Center. But in fact, the first major terrorist attack to happen on US soil that was in the New York City area was what is known as the Black Tom Explosion, which was an act of terrorism by agents of the Office of Naval Intelligence of the German Empire, which was a act to destroy U.S. made munitions that were about to be shipped to Allies during World War I. And what these agents did is they attached explosives in in New York Harbor, which is currently in New Jersey, just off from Ellis Island in the Statue of Liberty, and they detonated military goods worth about twenty million dollars in today's in in in 1916 dollars and five hundred and eighty million in two thousand twenty-four dollars. And this explosion was so powerful, in fact, it was the largest non-nuclear explosion to ever occur on U.S. soil. Many of you haven't heard of this, and it's almost s shocking, mind-blowing, that this explosion shattered windows, some say as far as every store up to 14th Street in Lower Manhattan. In fact, this explosion is the reason why, for about a hundred years, you still can't, but the initial reason why you could not travel up to the torch at the Statue of Liberty, because the torch was damaged as a result of this explosion. This non-nuclear explosion measured of five to five point five on the Richter scale, could be heard as far away as Philadelphia. So this was a munitions depot in the United States, and at the time you may remember the United States was neutral in respect to World War I. The munitions that were created here in the United States, in theory could be shipped to any country, including Germany, but the British Royal Navy had blockaded the the Germans, so we couldn't ship to the Germans, and we didn't really have much incentive to or desire to, , as we were very friendly with the UK and France, but nevertheless, we couldn't ship to them anyway. So the Germans decided that they would take out the largest munitions depot outside of Europe in the midst of World War I. So looking back at this event here, at the time, for a long period of time, it was not exactly known what was the cause of the blast, and some who are skeptical of figures of authority suggest that perhaps the administration at the time, the Wilson administration, Woodrow Wilson, did not want to pin this on the Germans at the time, A, because maybe they didn't know, or B, because at the time the United States was still very concerned about entering World War I, and this might have been something that pushed the United States over the top, and therefore it was kept relatively quiet at the time. But interestingly, those who were alive during this event in 1916 and World War I, even though many of us today don't know about the Black Tom explosion, those who were alive when World War II was occurring, they certainly remembered it. It was something that was in their mindset, in their psyche, something that had occurred in their lifetime. And in fact, President Roosevelt, at the outset of World War II, when we declared war on Germany and the controversial period when the United States interned Japanese citizens in intern camps, one of the justifications for that was in fact the Blackcom explosion, which was carried out by German agents with the assistance of German Americans and the concern that Japanese might repeat that history. So, thinking back to this, other factors that affect us today is that the Black Tom explosion resulted in the establishment of domestic intelligence agencies in the United States. We may think of 9-11 as being the beginning of programs that were born out of terrorist acts. But going all the way back here to 1916, agencies were created that that would serve this country for long periods of time. In fact, Secret Service, which with the time was largely tasked solely with protecting the president, this was the period of time when the powers were expanded in the Secret Service to fact focus on not just the protection of the president, but in in enhancing the size of the Secret Service to protect protect against domestic terrorism. In addition, the FBI was significantly enhanced to focus on operations taking place within the United States having to do with terrorism. So lots of the task forces and things that we see today are actually the result of this event that happened in 1916 that very few of us may be aware of. So here we are, significant historical event, studying what could be the implications. One of the thought processes that makes a lot of sense is not only to think forward, but to look backwards in order to be able to determine what are some of the possible outcomes going forward so that we can make more intelligent decisions as it pertains to our investments and our portfolio, which is critically important as we begin 2026. So talking about 2026, let's let's take a look back at 2025, where we had a year where the SP was up about 16%. This is on the heels of last week, where where we saw markets decline slightly. Last week we were down about 1% roughly last week, and that was something that preceded a strong December. So up 16%. Overall, the market was somewhat relaxed going into the end of 2025 as we look for the buildup into 2026. The expectations are that the Federal Reserve will keep cutting interest rates, which could keep bond yields down, help expand the economic expansion. We also, of course, have the AI push continuing to drive profit growth, and at least at the moment nothing has interrupted that that trajectory here for for artificial intelligence. We have the volatility index, so the SIBO, the VIX volatility index, closed the year around 14, down from 26 after a brief spike in late November, and near the low end of its range in the past five years. So given geopolitical risk that we see today, one of the things that market participants will be focused on is does volatility increase from here, not only because of geopolitical risk, but because of uncertainty about interest rates, uncertainty about profit margins, uncertainty about the continued AI investment, uncertainty about whether or not we're gonna have a government shutdown at the end of January. So these are the these are the short-term milestones that the markets will be focused on. Now, you may want to study history and say, well, what's happened when the SP has gained more than 10% in each of the past three years? Well, certainly in the last past three years we've been up more than 10%, and cumulatively over the last three years, the market as gauged by the S P 500 is up 78%. So in the nine times when the index is up at least 10% three years in a row, the average move following that year is a rise of 4.6%. And of those nine years, five years saw declines. Most recently, 2022, after we had three up years, we saw declines of 19%. So what are strategists saying about 2026? Well, let's look back to what strategists thought last year. Strategists were expecting a rise of 7% going into 2025. We can safely say that they were wrong because we know that SP was up 16%. This year, I don't know how much credence we put in this given the track record, but this year, strategists expect the SP to gain about 9.6%. That's probably unlikely because gains of between 0 and 10% are very unlikely, not impossible. If you look back at gains of 9%, that has happened once in the last about 25 years. In 2015, the SP was up nine and a half percent. So we'll see. If strategists are right, perhaps they'll get this one right, and we will see a gain of roughly nine percent. But if history is is a gauge or a guide, it is a difficult target to achieve to predict what the financial markets will do. Of course, there's so much uncertainty, so much information. All right, so let's take a look at markets where we are this morning, relatively quiet despite all of the news. The Dow futures are down 17 points, SP futures are up 15, Nasdaq futures leading the way up about 150 points. Oil this morning is up about 60 cents a barrel, so that is certainly something markets will take a look at. Gold up about 2%, up about $90 an ounce, silver is up about 5%, copper up about 4%, so we're seeing a move to safety amid the geopolitical turmoil. Interestingly, the 10-year U.S. Treasury bond, which typically sees flows, positive flows when financial uncertainty is abounding. Ten-year treasury now is relatively unchanged, so that is an interesting development. We were seeing 10-year treasury yields lower a little while ago, and the dollar is relatively flat, so we're not seeing a big move to the dollar outside of some of the Latin American currencies relative to the dollar. Secretary of State Marco Rubio told NBC News that the U.S. is not at war with Venezuela. Axios is reporting that the country's interim leader, Del C. Rodriguez, has vowed to cooperate with President Trump after he threatened a second strike if they, quote, do not behave, unquote. Besides the smattering of corporate news items, headlines are relatively quiet elsewhere as the market gears up for its first full week of trading of the new year. At 10 o'clock today, we will receive the December ISM Manufacturing Index. President Trump did repeat that he plans to travel to China in April. Political reporting that the Republicans and Democrats are both signaling a government shutdown will be avoided on January thirteenth. NBC News is reporting that a clear extension of the affordable care subsidies is likely dead on arrival in the Senate, even if it passes the House. In Hong Kong, Minimax, which is A competitor to DeepSeek. You may remember DeepSeek as being the company that briefly sent shockwaves through the AI world as they were able to achieve some powerful results with respect to artificial intelligence computing with not as not as up-to-date state-of-the-art chips from NVIDIA, so Minimax a competitor to them going public. Goldman Sachs expects China's gross domestic product to grow about 4.8% in 2026. The Chinese recently reported that 2025 was about 5%. We had talked about the potential for chip shortages last week, and Honda this morning is considering a production pause in China due to chip shortages. We may see more of that and see what effects that has on inflation. Paramount Skydance, symbol PSKI, is reportedly running out of patience amid increased offers for Warner Brothers, WBD, according to the New York Post. This is as Paramount Skydance and Netflix both compete to purchase Warner Brothers Discovery. Philadelphia Fed President Anna Paulson, who is a voting member, says she sees inflation moderating, the labor market stabilizing, and growth coming in around 2% this year. She said if all that happens, then some modest further adjustments to the Fed funds rate would likely be appropriate later in the year. So giving some indication she's not necessarily for a rate cut in the near term, but perhaps later. Also, with respect to the oil markets, Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman have reaffirmed their commitment to market stability, unsteady global economic outlook, and current healthy oil market fundamentals, as reflected, they said in low inventory. And today, Versant Media Group, symbol VSNT, will trade independently. It had been trading on a win-issued basis. This is a spin-off from Comcast, CMCSA, Versant Media Group comprised of companies or properties like CNBC, the USA Network, the Golf Channel, Fandango, and Rotten Tomatoes, all comprising Versant Media Group VSNT, that spin-off being officially launched. This morning, I mentioned today we get the manufacturing PMI, expected to come in at 48.4. The Services Purchasing Managers Index is being released on Wednesday. We're looking for that to come in at 52.2, which would be down from 52.6 in November. On Wednesday, we get what's called the JOLTS or Job Opening and Labor Turnover Survey results. Consensus calls for 7.7 million job openings on the last day of November, about even with October. Job opening figure is important since they give us some sort of insight into how many jobs are available for folks who are looking for work. And then on Friday, speaking of folks looking for work, the Bureau of Labor Statistics is reporting the jobs for December. This is the first up-to-date look we get on the jobs report in a few months because of the government shutdown. Economists forecast a 55,000 job increase in non-farm payrolls. That's after the 64,000 gain in November. The November numbers affected by the government shutdown. So first sort of clean look. Unemployment rate expected to edge lower to 4.5% from 4.6%. Also on Friday, we get the Michigan, University of Michigan releasing the consumer sentiment index for January, looking for 53.5. Consumer expectations of year-ahead inflation was 4.2% in December, which sounds like a high number when inflation as recorded by the CPI is about 3%, but that 4.2% was the lowest it's been in 11 months. All right, let's talk oil here. Obviously, Venezuela, big oil-rich country. Not only are they a big oil-rich company, based on proven reserves, Venezuela has the most proven oil reserves in the world, about 20% of all proven oil reserves, more than Saudi Arabia at this point. So Venezuela certainly a lot about what has to do with the oil there. Goldman Sachs this morning talking about what the implications may be for oil prices given the events over the weekend. And they say that they are leaving their oil price forecast unchanged for Brent crude at about $56 a barrel and $52 for West Texas Intermediate, but they say there are some potential effects that could change those forecasts. They say in the near term they see some risks to those forecasts, and they say that you could see a potential slight increase in the price of oil as a result of this uncertainty. You might see a reduction in the amount of oil coming out of Brazil initially due to the actions over the weekend. And they also think that in the near term, after there is a period of digestion of this initial conflict, that we could see a increase in supply and therefore a decrease in oil. So suggesting that in the near term, instead of that 5652, you might see 58.54 on Brent to West Texas intermediate. But longer term, they say that we could see a pr increase in production in oil prices from Venezuela. Venezuela did produce 3 million barrels a day at its peak in the mid-2000s, and any recovery in production they say would be gradual and require substantial investment. But they say that if that were in fact to come to fruition, they estimate a $4 a barrel of downside to their 2030 oil prices. So over the longer term, the potential for lower oil prices on increased production, you might see a little bit of a bump in the short term because you really can't get that oil online and may have some setbacks before you start increasing that supply of oil. With respect to oil and oil stocks, I mentioned some of those companies moving higher this morning. Barron's before, this was written on December 31st, so this happened before all the events over the weekend, but Barron's suggesting that oil stocks are worth a bet in 2026. I don't think that the events over the weekend would dramatically shape or change that view. They were saying going into 2026 that oil prices are were reflecting a lot of bad news and oil stocks had lagged the market, and they said that buying oil stocks now makes sense in the face of some tailwinds that could commence soon. Saying that everything that could go wrong did go wrong for oil stocks in 2025. Overproduction was an issue with both OPEC and U.S. producers drilling more than the markets needed, and therefore supply high, higher than demand. We know that means that prices are lower. Now oil stocks didn't have a terrible year. They were up about 8.5%, but that is less than the SP's 19% rise. But they say the coming year could be better, suggesting that oil prices have exhibited a floor at around $55 a barrel, and that may hold. And also saying that oil holding up in a rough environment could be a sign that oil sector's makeover could be working, saying that the oil stocks are no longer simply a bet on the direction of oil prices. Companies now are managing their balance sheet, their free cash flow, they're buying back stock, they're growing their dividends. So suggesting that as the oil business becomes even more mature, that the outlook for shareholders could be bright in 2026. One company that was mentioned very positively in Barron's was Charles Schwab stock, symbol is SCHW, Sam Charlie Hotel Whiskey. Barron saying that Charles Schwab is back on offense, its stock is a buy. You may remember a few years ago Charles Schwab stock was under pressure because the predominant way that Charles Schwab, the company, makes money is that if you are an investor in in with Charles Schwab, the default for your cash is a very low-yielding Charles Schwab money market. And you have to move that cash into a higher-yielding product if you don't want to get that very low rate. And most investors, when rates are fairly low, just left their cash in the money market. It was easier, and the Charles Schwab was making a lot of money because they were paying investors who kept their cash at Charles Schwab a rate below what investors could earn elsewhere, and Charles Schwab was earning the differential. What happened is when the Federal Reserve started raising interest rates in 2021, well, what started to happen is investors that had their accounts at Charles Schwab started noticing, hey, I'm getting a quarter of a percent or a half a percent on my money, and my friends are getting two, three, four percent on their money market balances. What can I do in my Charles Schwab account to earn a higher return on my cash? And investors started moving their cash into higher yielding investments at Charles Schwab, higher yielding money markets, and therefore Charles Schwab was earning less on their cash. And also because they had less cash available to them, they had to go out and borrow money because they didn't have access to this cash hoard from these low-yielding deposits. So they had to borrow money, and at the time the cost to borrow that money was high. So a double whammy for Charles Schwab margins decreasing, borrowing costs increasing. At the same time, they had bought the T D and they were integrating T D. That was a very large integration, very challenging. So you had two big headwinds going on at the same time, but now it looks like the company is leaning into their traditional strengths, and Barron's talking about them adding to new strengths as well. UBS analyst Michael Brown saying the company has made a clear shift from defense to offense. He has a buy rating and $119 target on the stock. Morgan Stanley analyst Michael Cyprus has a street high $148 target on the stock. The stock's trading just over a hundred dollars a share coming into this morning. So Schwab is now opening new accounts, putting more investing dollars into, as investors are putting more investing dollars into stocks. Schwab has seen new brokerage account openings exceed a million for four consecutive quarters. And Schwab this year through November had raked in more than $440 billion in core net new assets this year. Put that into perspective, Robinhood's total platform assets are $325 billion. So that means basically that Schwab onboarded one Robinhood this year alone. So investors bidding up Schwab stock up 36% this year, on pace for their largest gain since 2021. Despite that, the shares trade at a market at a multiple below the market, trading at 18.2 times forward earnings. market is trading around 23, 24 times forward earnings. Schwab five years ago traded around 23 times forward earnings, so perhaps Schwab can regain that mojo from years past. In addition, there are some trends working in Schwab's long-term favor. More Americans are trading stocks, more Americans are seeking out financial advice, and nearly four in ten investors have both advised and self-directed accounts. Charles Schwab is also going to be investing into enhancing their platform to offer potentially private investments to their clients, perhaps through a fund. They recently bought a company called Forge Financial in order to accomplish that. And also they say they have a forthcoming cryptocurrency offering set to launch in 2026. Schwab will finally allow investors to directly hold Bitcoin and other digital assets and may consider launching its own crypto fund. At the same time, Schwab is leaning into its in-person experience by adding locations to its 400-plus branch office networks. The company is also having success attracting younger investors. Two-thirds of new customers are either millennials or Gen Zers. Alright, let's change gears here as we come into the end of the discussion this morning, and let's talk about income ideas for 2026. Baron's saying the outlook for income is good in 2026 despite some growing risks. Income investors last year they said had a very healthy year, lending further credence to the sort of the 60-40 split between stocks and bonds for those who want a more conservative portfolio. And if you are looking forward to 2026, they say that yields are generally good, not great in stocks and bonds. Within fixed income investors can get 3-5% on municipals, 6-10% on junk bonds, 10% plus on private credit loans, 6% yields on preferred stocks, 5% on mortgage securities, and 3.5 to almost 5% on treasuries. Where do they suggest looking for yield? What's their favorite spot in 2026? And that would be U.S. dividend stocks. Dividend paying stocks last year had a mediocre 2025, but still offer bond-like yields and appreciation potential, they say, making them an ideal choice for income investors. What are spots within the dividend paying universe that they find attractive in 2026? Well, they say take a look at the Schwab U.S. Dividend Equity ETF, that symbol is SCHD, which now yields almost 4% and was only up 5% last year. And the ProShare is 500 dividend aristocrats, symbol NOBL, which invests in companies with 25 consecutive years or more of annual dividend increases and yields 2.5%. Buying companies with an impressive dividend record has generated strong results over time. The ProShares NOBL fund has had a single-digit return for two straight years, well behind the market, but they suggest perhaps their time has come and 2026 could be better for both NOBL and for SCHD. Number two on their list, having to do with energy, and that is pipeline stocks. While pipeline stocks don't have a lot of exposure to oil, despite that fact, the fact that oil dropped 15% last year did send a chill through the sector. But Barron's saying the sector offers high yields, dividend growth, and improving balance sheets. That should enable more stock buybacks. Senior investment portfolio manager at Tortoise Capital, Rob Thummel, sees 10% total returns in 2026, driven by 5% dividend yields and dividend growth. Number three on the list is real estate investment trust REITs were just up 4% last year, but Barron thinking this year could be better. They quoted JP Morgan Securities REIT analyst Anthony Paulone, saying that you have a relatively cheap sector with reasonable growth. He sees total returns in the neighborhood of 10%, driven by 4% annual dividends, and growth in funds from operations of about 5%. Also, what could be a catalyst for the REIT sector is that if you're looking at the valuation of public real estate versus private real estate, public real estate trading at a discount to net asset value significantly more than private real estate. And we're starting to see deals where companies that are in the private space are buying public companies and taking them private because that's where the discounts or the valuations are. Recently, Blackstone bought Alexander and Baldwin, and you may see more of that going forward. Apartment REITs like equity residential and Avalon Bay communities trade below private market values, now yield 4%. They could get a boost if investors were to take a peek outside of private REITs and take a look at REITs for public markets. We mentioned a couple of weeks ago Barron's talking about their top 10 picks for 2026. Among those was SL Green, which is a leading Manhattan office REIT, which is benefiting from strengths in midtown rents, and that's another option in the REIT arena. Going in order of where Barron sees the opportunities, foreign dividend stocks, then tabling telecom, like ATT yielding 4.5%, and Comcast yielding about 4.4%. then they suggest taking a look at business development companies. A little further down the list, there's certainly some risk here, but yields north of 10%. Then they suggest looking at utilities, mortgage securities, emerging market debt, and then rounding out the bottom of the list, preferred stocks, municipal bonds where they don't see a lot of value in the shorter term municipal space inside about 10 years, but do see some attractive valuations on the longer end, albeit with some risk from longer maturities, and finally treasury securities rounding out the income opportunities in 2026. That's everything I've got.

Alan Eppers:

Thank you for listening to Mr. Keith Lanton. This podcast is available on most platforms, including Apple Podcasts and Spotify. For more information, please visit our website at www.heroldlantern.com.

Sophie Cohen:

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Past performance is no guarantee of future results. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. The material does not constitute research, investment advice or trade recommendations.