Tactical Edge Podcast - Brought To You By TWM - Episode 7

The Tactical Edge Podcast with Raj Bhuyan returns at a critical moment —when markets, geopolitics, and policy are colliding in ways that could reshape portfolio outcomes for years to come. 

In this episode, Raj breaks down why today’s environment may be even more complex than investors realize, moving from a “triple threat” to a full-blown convergence of structural risks. From elevated valuations and market concentration to geopolitical instability and persistent inflation pressures, the conversation challenges conventional portfolio construction and questions whether traditional diversification still works.

Topics discussed include:

• Why today’s market may represent a “quadruple threat” vs. prior cycles.
• The breakdown of traditional 60/40 and modern portfolio theory assumptions.
• Financial repression and why bonds may continue to underperform in real terms.
• The risks of extreme market concentration in mega-cap U.S. equities.
• How geopolitical conflict and supply shocks are impacting energy and inflation dynamics.
• The case for international equities and a potential global rotation.
• Gold, commodities, and the role of hard assets in inflationary regimes.
• Why liquidity and flexibility are critical in uncertain markets.
• Lessons from the 1970s analog—and what investors may be underestimating today

Disclaimer:
This content is for informational and educational purposes only and should not be considered investment advice or a solicitation to buy or sell any security. Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. Please consult with a qualified financial, tax, or legal professional before making any investment decisions.

Transcript

SPEAKER_02 0:00

The US long-duration bond market has been producing negative returns for nearly six years. The best bull markets in history have the innate ability to shake out the weak hands. If a Fed chair says, hey, this is not the 1970s, that means it probably is.

SPEAKER_00 0:45

Raj Buyon is a managing partner of Tactical Wealth Management. Advisory services are offered through New Edge Advisors LLC, a registered investment advisor. Opinions expressed and information shared are for informational and educational purposes only and should not be considered as a solicitation for the purchase or sale of any security. Please consult a tax or legal professional for any specific information related to those topics. Past performance may not be indicative of future returns. Investing involves risk and the possible loss of principal capital. For those seeking additional information, please visit our website at tacticalwm.com and contact us.

SPEAKER_02 1:34

I'm Raj Buyan, a managing partner at Tactical Wealth Management, and here we are with episode 7 at the later stage of March of 2026. And it looks like this year is going to be a quite interesting year to say the least. So much so that we think this is a good time to talk about portfolio construction during tenuous times. You know, we've had a chance to take a look at a number of portfolios from other firms in recent months, and for the most part, we're not on the same page with a lot of those construction methodologies. So we thought this would be a good time for us to use the current environment to delineate our approach from what is generally out there. We do have this approach and this desire to narrow that gap between what folks out there will generally want and what's generally available in the wealth management space today. Now, with all of this news coming to the forefront over the past number of weeks out of the Middle East, I'm using news at high level on purpose at this stage. We're going to have politicians and policymakers have the power, quote unquote, to really move markets. And what the markets are going to try to do is try to decipher what's real and what's not real. Because it doesn't mean if it's said that it is actually happening. And here's a great quote, of course, the infamous quote from Jean-Claude Joncker, who was the Prime Minister of Luxembourg, also spent some time in the European Commission for a number of years. And during the 2011 Greek bailout by the European Union, he stated infamously, when it becomes serious, you have to lie. And kind of related, I'm not necessarily saying it is totally related, is from Chairman Powell last week in the FOMC press conference QA section, where he stated, when we use the term stagflation, I always have to point out that that was a 1970s term at a time when unemployment was in double figures and inflation was really high. That's not the situation we're currently in. And that statement kind of makes me think, you know, if you have someone in your social orbit who says, hey, I'm not a jerk, that means they're probably a jerk. And if a Fed chair says, hey, this is not the 1970s, there's nothing to see here, that means it probably is. Now we've been talking about this for a number of months. In fact, episode two, three, and even four, we went into length about the analog with the 1970s, and we even stated back at the time last November, we believe the period going forward could be the most difficult in a generation. Well, the reason why we're bringing this up is because we were talking back then about a triple threat. Well, now we've got a quadruple threat, or let's be a little nicer and call it a historical convergence of four major factors. And let's cover those real quickly just for the background. Of course, we have the extended valuations complacency. We can see this with this updated data on this table. Even with the drop-off the last several weeks, we're still looking at 99th plus percentile for all of these metrics from the capitalization of GDP to price of sales, the cape ratio, stock market concentration, etc., etc. This is a market that's priced for perfection. And of course, one can ask well, is this a perfect environment for such lofty valuations? Of course, these valuations just come out of the blue. They came for a reason. We had the mixture of a lot of money printing and accommodation and incredible innovation coming out of the technology sector over the past decade and a half. But now we're seeing something different with this big AI push. We're now seeing folks focus on the disruptive element from a job standpoint. In fact, we're seeing net job growth in the technology software, finance banking, and customer service call center industries. We're seeing the job growth really tail off into negative numbers on a rolling basis in the last couple of years. And people might think, well, is this going to affect consumer spending? We already have a K economy. We talked about this K economy where the top 59th percentile, the middle and the upper middle class is not doing well as a share of total net worth. The top 0.1, they're doing swimmingly. That's the K economy right there. And of course, this is the problem. If you have folks that are not able to keep up and the inflation is, let's say, understated, uh, they're going to be unhappy. And the best way to see this is through this Michigan Consumer Sentiment Survey. This goes back to the 1960s. Even though we're looking at a stock market on a rolling basis, five years rolling, that's decidedly positive in double digits, even with the decline lately. We see this historic divergence where we've never seen it before to this extent. People are feeling really sour about the economy, even as the markets are doing pretty nicely. Now let's add upon this this new geopolitical front, to say the least, or maybe you want to call it a hot war. We have a lot of supply disruption at the minimum going on in basically the Strait of Hermuz, and all of the fuels in the neighboring area are at risk to some degree. And the question is, how long will this supply disruption last? And what could the long-term effects be? And that could be a question that could be posed to the constructor of a portfolio along those lines because a lot of those may not necessarily have that type of mindset built into the equation at this time. And that's been our biggest issue for the most part. And that is a lot of these types of strategies lacked context or at least the application of some contextual nature when it comes to the construction or the risk management application or anything in between. Because as we've already stated, we've had this historic run in U.S. stocks, especially large cap stocks, 21% a year for the NASDAQ for the last 17 years. We have the situation where, from a rolling standpoint, we've gone from minus 6% from a 10-year analyzed rolling number back in 2009 to plus 12.5. That is just an incredible upward move in the better part of two decades. And of course, this type of move has not been, let's say, not noticed. It's definitely been noticed by the rest of the world. We can see it in the net international investment position where US investors had$41 trillion invested all over the world, and the world has almost$69 plus trillion dollars invested here. That equates to almost a minus$28 trillion deficit, meaning that we should be playing really nice and well with our international investors that are invested here. Because if they repatriate those dollars, that would probably impact the pricing of our real estate, our treasury bonds, and our equity investments. And speaking of equity investments, inside that$28 trillion spread, we've got basically the highest allocation to U.S. stocks by international investors. And history shows they are the worst market timers. The last time they were invested to such a degree was in 1969, right before a horrific 17-year run for US equities, especially in relation to international markets and also inflation. Now that the US market has basically tripled the international markets over the past 16 years, now international investors want some of that return. The question is, are they trying to buy the past performance or do they have an outlook for some reason that thinks it's going to continue for the next 10 or 15 years along these same lines? The best way to see the cycle nature of this back and forth is through this chart here, where we kind of have the run between US and international going all the way back to the 1970s. We had this historic run going all the way from 84 to 99. We had a pullback from 99 to 2008 in US stocks. So US stocks did poorly from 99 to 2008. Then we had this run again from essentially the 2009 period of 2021. Yes, I said 2021. On this rolling basis, using 10-year rolling returns, the international markets have started to outperform for the past five years. Really so more the last year and a half, two years, but for the last five years, the tenure number is trending better for international right now. And if we look at net flows for the past five years, essentially since that top in relative 10-year rolling performance, we see upwards of six and change times more investments have gone into US large cap growth investments versus any type of international equity investment in the ETF space. That is pretty telling from that standpoint if you're a contrarian or have some level of a contrarian bent. So let's look at an example of this portfolio construction with the issues that we're talking about. Let's say we have this portfolio of a household. Here's the investment policy statement. And basically, this household has a 4%-ish desired from an income standpoint. They want to help fund retirement lifestyle. They have some philanthropic goals, they have goals to provide inheritance to their children. And essentially, with modern portfolio theory in play, which a vast majority of these investment strategies are based upon, we're looking at 50 to 80% equities, 15 to 40% in fixed income, and only 0 to 5% in cash or cash equivalents. That to us really stands out. Of course, generally speaking, we have multitudes of that number at this stage of a market cycle. So if we look at the way the portfolio is diversified, you know, we basically have all these different types of asset classes, and that's what the prude investor rule asks you to do. Basically, you know, diversify by asset class, diversify by style within the asset class, etc. But there's a couple of problems with this type of construction, we would argue. Number one is the financial repression argument. What is financial repression? Well, financial repression is simply the government keeping rates artificially low so that it can simply ford its own interest payments on its debt, on its spiraling debt. Because the interest payments on US debt have gone from$35 billion way back in the 1970s to over$1.2 trillion today over the last 12 months for the period ending last December. That's almost 20% of all tax revenues. The government simply cannot afford to pay six, seven, eight percent on its debt. Basically$39 trillion today. It'll be probably$40 trillion before we get to the election in the fall. And that is something that people need to understand and consider, we would argue, when it comes to the fixed income investments out there. Repressed interest rates usually lead to negative real returns and fixed income. That's the whole idea of repression or keeping interest rates below the official or true inflation rate. On top of that, we can see the genies out of the bottle with regard to the money supply growth. We're looking at a 7% annualized money supply growth over the last 20 plus years. On top of that, we've got this unipolar to multipolar switch with regard to economic activity over the world. So the amount of globalization is actually falling down to 1%. It's actually negative in Europe, while the onshoring or redundancy efforts are actually picking up. So as the United States is looking to bring productive capacity back onto our shores, that is certainly an inflationary move because you're going from full out efficiency to a redundant platform. On top of that, a chip that is built in Arizona will cost a lot more than a chip that's built in the Philippines. There's just no doubt about that. And that's just is what it is. I'm not saying that redundancy is a bad idea. It's actually probably a really good idea, but it's not going to happen without a lot of inflationary pressures, uh, I would contend. So here we have this problem. We have the official inflation rate in the mid-2s, the pre-1983 definition for CPI running around 10%. Let's take the average of those two. Let's say it's six. Well, even if it's six, the entire spectrum of investment grade fixed income is well below that six. So that's the question. The question is if you have a significant allocation to fixed income today, with the prospects of repression dropping is not likely. The prospects of a persistent deflationary move, we would argue, is also not necessarily likely. Well, now we have a we have a problem here because in this post-COVID world, people that have had bonds looking at five-year annualized returns have been dealing with basically zero to one to negative returns. They've made zero money on a nominal basis and they've actually lost to inflation, whether it be official or the real inflation rate. And the question is, will that continue or will that reverse? We don't see any fundamental macro signs of that reversing on a sustained basis. There could be a rally. People have been talking about rallies and bonds for a long time now, for multiple years, and it could happen. But generally speaking, we would view that on the surface as an opportunity to sell if you still owned a lot of long-duration bonds. Um, we wouldn't view that as a potential new long-term bull market, at least at this stage of the environment, with the data that we have available to us right now. Okay, the second big one, market concentration. This one here we've been saying for a while, and didn't really matter until it kind of does start to matter. And that's the problem we have. We have a concentration that went from 44% for the top 10% of stocks in the US stock markets, all the exchanges, to now it's nearly 80%. And you can see it through this angle. This is a market carpet from the folks at stock charts. I have all the stocks in the SP here. It's listed by the size of boxes, really, the kind of contribution to the market cap. So Nvidia and Apple are huge. They're like 13 plus percent of the SP alone. And those numbers below those, those are the year-to-day performance of those individual stocks. You see a lot more green, generally speaking, when you look over towards the energy, utilities, materials, staples, and industrials, not much so with the with the discretionary healthcare, financials, uh, com services, and certainly the technology stuff, especially the big technology companies. But if we look if we hone in on this, the top two companies, Nvidia and Apple, the two of them together are 13 and a third percent of the SP 500. That is almost the exact same number in terms of the weighting as the entire energy, materials, and industrial sectors combined. That is crazy. And those three sectors were almost 55% of the SP way back in January of 1980. Today the 13. And will it go back to 55? I don't necessarily say so, but I won't be surprised it gets a 25 or even 35% in the coming decade or so. And of course, if you own the NASDAQ or SP, you have virtually very little allocation to these sectors right now. You own, of course, a lot of the big technology stocks. You can really see it here in this angle where you'll see a portfolio that we actually took a look at where you have allocations to large growth, large core, large value, and then some small cap, mid-cap, and of course a global equity manager. A global equity manager is not an international manager. Because today, where the stock market has gone over the last two decades, a global equity manager will have upwards of two-thirds of the stocks will be U.S. stocks. Only a third will be international. So if you add this all up, you're looking at nearly 70% of this portfolio, which is diversified, supposedly, in U.S. large cap uh sector. And on top of that, with the concentration we're talking about, we're talking about a handful of companies will have 30, 35% influence on the entire portfolio, which is great if those companies are doing very well. If those companies would start going in a different direction that we've seen the last several years, that could impact the portfolio marketly, perhaps a lot greater to a degree than people might be expecting with regard to what they believe to be a diversified investment portfolio. So if we look at the entire spectrum of investments, there's$800 trillion. That is a lot of seconds. If I do the math, that's 20, that's 25 million-ish seconds out there. So that's a that's a big number. And if we look across the board, what do you want to own? Well, we think the best way to look at this is through the liquidity spectrum, with the uncertainty level really rising, with valuations at very lofty levels in the largest companies in the entire market universe. We think this is probably a good time to have more liquidity than not with regard to the kind of investments that you may hold, simply because it'd be much easier to pivot if the market environment really makes a material and sustained change. And that's why we think conceptualization is such a big deal from our standpoint. And that is try to figure out where each asset class might be within its own cycle. Now, all the asset classes aren't in the same part of the cycle. In fact, they're all going to be in different parts, and they're all moving, and maybe perhaps in different speeds. And of course, nothing's 100%. We're all using probabilities to our advantage. But to us, it's so important to try to distinguish what could be in a rising trend and what's probably at the later stages of a rising trend, and of course, what could be in the early to mid stages of a major downtrend. And the best way to look at this, we believe, is through maybe a before-after with this latest um military outbreak in the Middle East. Let's play a game of before-after uh February 27th, 2026. That's the last trading day before the war in Iran really got going. So let's look at it from the spectrum of the liquid fuels market or crude oil. Obviously, that's been the most impacted change so far that we've seen. If we look at the spectrum of the futures contracts going out, let's say a couple of years almost, we're looking at a backwardation angle where the higher there's a higher price for the shorter duration contract,$67 to$60 going out a year and a half, almost two years. And if you look post, this is as of the close. Business on March 20th, we're looking at a very different angle here. We're still looking at a backwardation angle, but we're looking at prices that have gone to 98 on the short end, and there's 72 going out of ways. This is supply destruction. This is actually probably more supply destruction than we might have ever seen in modern times because we actually are seeing upstream um facilities being taken out to a degree. Obviously, it's not we're not sure exactly to what degree and how bad the damage is, but we're talking in some cases months or maybe even years for someone of this to come back online. And of course, we're not even done at this stage as this recording is being made. The military conflict is still ongoing. This is about what not even 0.14% of total risk asset market capitalization. That's the global capitalization of the stock markets, plus the global capitalization of all precious metal and other commodities out there. Now, let's look at the mega cap fang stocks. Now, before the war, we already saw a deterioration in the trend for these megacap stocks. In fact, the top was in late October. We were talking about this at the time, about this perhaps great rotation that could be taking place. And of course, we were um you know talking about this at length, even in January with Marty Ruther um on the podcast. And the question now is is this something new? Post the outbreak in war, we actually saw a rally for a few days, but then the Fang companies in this case hit the 50-day moving average, which is falling and has now rolled lower. Now we're down to only 3% and change above this 88-week moving average, which is still rising. But we're not in quad A when you look at this chart in more of a relational pattern in terms of international companies or even the precious rental complex. And this market is nearly a quarter. We're talking the top 25 companies in the SP 500, essentially, are almost a quarter of the total capitalization of all risk assets out there globally speaking. So this is still one of those things where if these companies cannot outperform your average company or can outperform the global stock market or even the global or the international stock market, then why are we so overweight here? Someone could ask that question. Now let's look at the inflation deflation trade. Of course, there's been a lot of talk about this war maybe propagating a recession and perhaps catalyzing a flight to quality for US treasuries. Well, we're not seeing it as of yet. Now we had a little rally in US Treasury up to the war where we had a peak above that 88-week moving average on the 27th of February. But since then it's been basically straight down. U.S. treasuries have really pulled back here, and now we're back into quad D where the 88-week moving average persists to fall. This thing's been falling for a better part of five years now. And if you look at the five-year number, long duration treasuries have annualized at a minus 10.6% rate. Um, that's pretty poor. And of course, that's before inflation. This is the big thing here. The deflationists have been out there a long time. There's been uh some that have written a lot of books and still believe that we're looking at a deflationary environment forward. And of course, that is the hard part about how this all might play out. We believe still from a macro thesis that a right tail event might become a higher probability than a sustained left tail event simply because the incessant money printing would probably lead to a lot of devaluation in underlying currency. Because, yes, we've seen deflationary episodes recently, uh, briefly in 2020, more so from 2008 to early 2009. We also saw one a little more uh death of a thousand cuts between 2000 and 2002. However, we still would contend we are in a post-COVID world, or at least post-global response to COVID world, where the politicians got access to the money printer alongside the central bank policymakers. And there is zero talk for sustained austerity in any material way right now. And the question is, will there be a politician who says, listen, we need to fix the balance sheet, we need to cut spending, we're gonna have to deal with 10-15% unemployment for a few years, but this is what we have to do to protect and save the world for our children, right? They might say something like that, and if that person gets elected and they get congressional support on both sides of the house, then yes, the deflation angle probably makes a lot more sense, even for a number of years, because that's probably how long it would take to fix the economy in a big way. We just don't see any type of political expediency along those lines at this stage. And if we see some data points that suggest otherwise, we will uh for sure talk about it uh going forward. Okay, now let's look at the international stock market. International stock market has actually done extremely well. We talked about how it's been outperforming in the US for a while. It actually made a top two days before the market close on February 27th on a nominal basis, and since then it's actually come down pretty good. So even though we're still solidly in quad A, still well above it 12.9 percentage points, we are definitely coming back down, approaching that 200-day moving average, which is rising. So the international basically economies are being more impacted by this supply disruption than the United States has, and that's been basically probably the biggest reason the geographic proximity to what's going on there in terms of any potential expansion to the conflict in terms of widening the geographic footprint of the conflict, and of course, the supply disruption to for energy has a greater impact on a lot of countries over in the Mideast and also to the far east. We'll see how that plays. But a better way to look at this is more from a relational standpoint. If I look at the relational move for international versus domestic, we see this big move up. Uh basically starting in 2024, we had a consolidation into the fall of 25 and that big move higher, pretty much into the market close on February 27th. So the racial pattern actually hit a high at the market close. And of course, it's pulled back a bit, but we've still are well above the breakout level, and now we're in quad A on a relational side. Generally speaking, and Marty Ruther and Andrew Gildehaus would definitely back me up on this. Whenever you see a major multi-year breakout and you see a retracement of substance, that is generally the time to start looking for, you know, basically more opportunist exposure in that asset class. This is a really good setup, technically speaking. It doesn't mean it can go lower. We're just looking at from a probability standpoint. Okay, now the gold market and the silver market. Boy, these have been all over the place to say the least. My goodness. So we've had this tremendous run in the pressure metals miners. I'm using the Philadelphia gold silver mining index because that gives you the most beta or the most volatility on both ends on the up and downside to show you what's happened to precious metals since the war started. So this index hit an all-time high on February 27th. So basically zero deterioration before the war started. This is very unlike what we were seeing with large cap US stocks, which actually peaked last October. And then, of course, since the war started, we've had a really nice, nice meaning, very material pullback. We're still above the 88-week moving average by like 40 some odd percent still. I think it was more like 80 some odd percent before. So we're still quite extended. And we were talking about how extended they were looking a little parabolic. Believe it or not, this is really positive from a long standpoint. This is obviously not fun to see all these back and forth, but this is what a good bull market will do from time to time. A good bull market is very good at shaking out the weak hands. A weak hand is someone who is getting into an investment simply because their neighbor told them to, or they saw it on TV, or they just looked in the uh online and saw something that was higher and they want to get into it. They really have no conviction in the underlying investment. Now, one reason why we might have seen such a strong drop-off in the price of the precious metal miners has probably a lot to do with a huge jump in diesel prices. That's probably 20 to 30 percent of the input costs for a miner trying to extract precious metals out of the ground. And of course, the diesel prices have gone up a lot more than regular gasoline prices. We're talking almost 75 plus to 80 percent versus 35 to 40 percent here in the states. And so the question is, will that be a sustained deal? Regardless, we still see what 0.8%. Uh, we're talking exposure in terms of capitalization of the total risk markets. This is still a very, very tiny sector. This sector was more like seven to eight percent, or about ten times as much in 1980 when gold made a major decade peak back then. Of course, we have to talk about the consumable fuel equities or the oil and gas equities. This is an area that we really picked up a lot of exposure in the last year, generally speaking, across our platform. So, this is what's really interesting. The energy stocks really started picking up a lot of steam, you know, going back to the fall of 2025 and really in a very concerted way just kept on rising right up to the high on February 27th, the day before the war started. And since then, they've just gone straight up. And so, did investors somehow know the energy sector was gonna be the recipient of some type of major supply disruption? Going back to the end of February of 26. It's hard to know for sure, of course, but we were getting positive on the energy sector simply because we see a supply disruption more from a more organic level. We weren't looking for a military supply disruption, we were looking for less available net supply out there, mainly because there just hasn't been enough investment in the space over the last decade to keep up with the decline rates in existing wells. So, this supply disruption, part of which could be semi-permanent or even permanent to a degree, is only going to exacerbate the issue from our standpoint. Of course, there can be some demand disruption with prices making such a sharp increase, and then we have to be on the lookout for that as well. But there's increased confidence from our standpoint that the overall picture for the energy sector will probably improve simply because people, generally speaking, will be more appreciative of how important energy is just to maintain the livelihood on their daily experience. The energy sector in whole, we're looking at on a global level, is only 4.5%. This is a pretty amazing number because this number used to be closer to 30% back in 1980. So 80 was definitely a very extreme time period on the upside for energy. So we're not saying we're gonna go from 4.5 to 30, but wouldn't be surprised if we go from 4.5 to 12 or 15 even, which would only be half of the 1980 high from that standpoint. So let's revisit this 1970s deal that Chairman Powell was talking about. Let's go to 1972. Now, this is about a year after Nixon closed the gold window. The gold moved from 35 an ounce and really started making some waves. The price of gold went from 35 all the way up into the mid-60s. And of course, this is uh delineated by the market top in the SP 500 on January 11th of 73. And of course, since the market top, gold actually went a lot higher with 25-ish percent corrections along the way, multitude of them. But here's the one thing I want to focus on. We had gold pullback a lot because there's a chance the Federal Reserve may stop lowering rates or easing rates and could even start increasing or raising interest rates. Raising interest rates in and of itself is not the kryptonite to which I was alluding. What I was alluding in terms of gold's kryptonite, in terms of how it really got taken out in the past, is when an increase in interest rates can actually kill off the actual inflation, the devaluation of the dollar. So we need the interest rates to supersede the actual inflation rate. If the actual inflation rate is six or seven, can the Fed really take Fed funds rate to six or seven, not including where it might go to eight or nine? Can the Fed do that? Can the US government afford eight or nine or ten percent interest on 39, assumed to be 40 trillion dollars in debt, where every 1% increase will be nearly$400 billion in interest payments on an annual basis? We think that is a very low probability outcome. Even as interest rates were being increased in this 1973 to 1974 period, we still had a very marked increase in the price of gold from around$65 to upwards of$180 over that year and a half period. So an increase in interest rates by itself is not necessarily bearish on the price of gold by any means. It's when the interest rate increase supersedes what the real inflation rate is on a sustained basis. Volcker had to take rates up to 20% almost and keep it there for a while, in some cases, two or three fold higher than the inflation rate at the time. That's what killed off gold back in January of 1980. Now, if we look at the stock market, 1970-1974, going into 1972, we had the top 50 companies or the nifty 50 companies trading at 37 times earnings. The Mag 7 as of last October, they were trading at 56 times on a trailing basis. That tells you a little bit there. So if we look at the stock market here, we actually had the stock market go up 75% in the year and a half before the top in 1973. We had a nice corrective phase in 1972, right to the 88-week moving average, circled in yellow, and a nice bounce off of that. And of course, things changed. We had a big uptick inflation in early January. We also had the start of a Middle East conflict and the oil embargo in the latter part of 73. And now you can see how the market kind of turned around and tailed off. We had the market drop off by about 12% in change to the November 1973 period when we officially went into quad D on a nominal basis on the SP. So this could be a nice little educational piece showing that you don't go from quad A to quad D in two months. Many times when you have a market on an uptrending environment and the 88-week moving average is moving higher, it'll take the better part of three quarters, sometimes four or five quarters for that trend to change and actually move from A to D. Now the war starts, the Yom Kippur war with this resulting oil embargo really catalyzed the decline in the SP at that point. And that's where you start seeing more of a waterfall decline all the way to the bottom in October of 74, where we basically saw a 49% decline in the SP. And of course, as we've already talked about, a near 70% decline for the top 50 companies in the SP 500. So we're not saying a nifty 50 crash or the Mag 7 will go through something similar. We're just letting you know that that can happen again, and it'd be very important from our standpoint to keep a very close eye on these nominal trends to know are we still in an upcycle where we're buying the dips like we are in Quad A, or are we sellers of rallies or trying to hedge rallies if we move into a quad D environment? Is it time to batten down the hatches? Well, why not answer that question with Marty Ruther, our CIO at the helm? I will be interviewing him again in the coming days. And in the meantime, stay vigilant out there. We really appreciate your participation through the feedback that we received in the last few months, and we will continue producing these podcasts. So, therefore, we will be in touch.