Staying Grounded as Markets Surge

As markets continue to grind higher, one thing most investors can agree on is that inflation remains out of balance and uncertainty is still abounds. Everyone seems to expect the Federal Reserve to begin cutting rates again soon, and fear of missing out (FOMO) appears to be driving much of today’s market action.

Valuation Concerns and the AI Rally

Valuations are at or near historic highs, fueled by an unrelenting AI narrative that has dominated headlines for the past few years. Much of the market’s gains have come from a handful of large-cap technology names, with Nvidia leading the charge. While this concentration has boosted major indexes, it has also created a lopsided market environment that leaves little room for error.

For value-oriented investors, these moments often signal the late stages of a rally. Chasing performance can feel tempting, but history shows that discipline and patience often yield better results over time. Instead of getting swept up in momentum, we prefer to focus on fundamentals that don’t go out of style such as dividends, interest income, and call writing strategies designed to generate steady returns.

Staying Defensive and Taking Inventory

Periods like this offer a great opportunity for investors to take inventory of their portfolios. It’s worth asking: Am I comfortable with what I own? How would my portfolio perform if markets correct or interest rates stay elevated longer than expected? Those questions matter far more than chasing the latest stock that’s grabbing headlines.

At Freedom Capital Advisors, we believe that staying defensive doesn’t mean standing still. It means maintaining thoughtful exposure, keeping some hedges in place, and seeking consistent income streams while others chase short-term trends.

Economic Uncertainty and Policy Watch

It’s been over a week since the government shutdown began, and one takeaway is becoming clear. A lot of “non-essential” jobs truly are non-essential. The bigger question is whether a recession is on the horizon or if the economy can continue to grow into year-end and beyond.

Even the Federal Reserve appears uncertain about the next steps. Mixed economic data, slowing job growth, and fluctuating inflation figures have left policymakers walking a tightrope. That alone is reason enough for investors to remain cautious, avoid overexposure, and stay grounded while the broader market tests its limits.

Maintaining Discipline in Volatile Markets

For now, we prefer to stay fairly conservative, maintain a disciplined allocation, and keep some hedges in place while others chase momentum. A steady, income-focused approach helps protect capital while preserving flexibility for when valuations normalize. In our experience, disciplined investors who focus on quality and patience often find themselves in the best position when the market narrative eventually shifts.

Ron McCoy
Freedom Capital Advisors

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Freedom Capital Advisors Inc. is a Registered Investment Advisor domiciled in Florida. This material is for informational purposes only and is not a solicitation to buy or sell securities. All investments carry risk, and there is no guarantee of future returns.