Spring Time Market Déjà Vu

DANO WEIR: Welcome to On The Markets, Friday, March 20th, 2026. Welcome to On The Markets, Friday, March 20th, 2026. There's this feeling that you've heard that before. There's this feeling that you've heard that before.

DANO WEIR: We're talking about Deja Vu this week On The Markets because this spring is feeling a little bit like last spring with a bit of a drawdown, although the circumstances are a little bit different. Myself, Dana, we're going to look at this alongside our managing principal, Chris Sipes, the similarities between this spring's event versus last year's Liberation Day.

DANO WEIR: Also an 80 year look back on the S And P 500 in times of crisis and military action. How has it performed previously? How has the S And P performed during historically during oil driven events and a deep dive on major asset classes in the wake of, well, what's going on right now. Let's dive in.

SPEAKER 2: The stock market, the economy, your money. What's the latest and what could be next?

SPEAKER 2: Find out now with Fermata On The Markets. Straightforward financial market updates for the brands of Fermata Advisors, Sonoma Wealth Advisors, Fermata 401k and Fermata Tax. On The Markets starts now.

DANO WEIR: Chris Sipes, managing principal of the firm. Chris, it looks like the entire thing is being held up by the Strait Of Hormuz.

CHRIS SIPES CFP®: Yes, this was actually straight from Elon Musk. I don't know. At least that's where I found it. I don't know if somebody else created this and he reposted it, but it shows the whole long range strategic business plan basically all propped up by the Strait Of Hormuz. So trying to find a little humor.

CHRIS SIPES CFP®: In the Markets today. Hopefully most everybody's watching basketball and not paying attention to the Markets today. This would be a good day to be a sports fan. And if you're not one, maybe adopt it, and come back and, and look at the portfolio sometime in the future.

DANO WEIR: And I've seen a version of this as well, instead of the straighter homers, it's, Nvidia earnings, you know, or this one little thing, you know, that's just seems to be the entire market is hinging upon it. We've touched on it, obviously a down week in the market, and we're going to look at why we're going to look at historically how it's going. And Chris diversity, is the name of the game right now.

CHRIS SIPES CFP®: Yeah, I found this quote earlier in the week and I just think it's, it's so great. So bear with me while, while we read through this, but, Survival is the only road to riches. You should try to maximize return only if losses would not threaten your survival and if you have a compelling future need for the extra gains you might earn.

CHRIS SIPES CFP®: The riskiest moment is when you're right. That's when you're in the most trouble because you tend to overstay the good decisions. So in many ways, it's better not to be so right. That's what diversification is for.

CHRIS SIPES CFP®: It's an explicit recognition of ignorance. I view diversification not only as a survival strategy, but as an aggressive strategy because the next windfall might come from a surprising place. I want to make sure I'm exposed to it." That was from Peter Bernstein in 2004 in an interview with Jason Zweig.

CHRIS SIPES CFP®: I think that that's a very wise quote to keep in mind.

CHRIS SIPES CFP®: He is right. One of the worst things you can do is get lucky and be and be right, say like on a single stock, for instance, because you get wealthy and then what? How do you stay wealthy? How do you know when to sell? How do you know when to part with that asset that has done so much for you? It's really difficult for people that get in that type of situation.

CHRIS SIPES CFP®: And then when we go through times like this where the Markets are selling off, And it's somewhat comforting, I think, to know that you have exposure to different assets that can help you survive tough times that are inevitable. They're going to happen again in the future, just like they have many, many times in the past.

CHRIS SIPES CFP®: The Markets go through cycles, companies go through cycles, asset classes go through cycles, and they're inevitable, those down times. And so being prepared is... Is is a smart thing to do given that that these things will happen again in the future can i share an applicable story you're talking about single stocks of course yeah so last summer.

DANO WEIR: So the pretense to this is I'm still new at the firm. I'm still new at investing. And my role on this show is to sort of be just like you, our viewer, our audience, learning about this stuff, not in this every day. And I ask a lot of questions.

DANO WEIR: And so most of my portfolio, you know, obviously I'm with the firm, so we tend to be diversified. But I had great interest in what that single stock experience felt like. And so I won't say what, but I did buy a single stock of a company I like a lot.

DANO WEIR: As a test, Chris, and you know this test. I bought it at $13.68. And I said to myself, I said, when this hits 20, I'm going to sell it. And would you believe it, Chris, in six months it hit 20. And guess what I did?

CHRIS SIPES CFP®: I'm going to guess you did not sell it. Did not sell it.

DANO WEIR: And then it kept going up to 25. And I thought, okay, 50. That's, because it was based on how it sounds like 50. Yeah. It's now sitting at 15. So my point is, you know, I got to really feel that in a very small part of my portfolio, like less than 1%.

DANO WEIR: But this is that is that experience for me perfectly encapsulates what this tweet is about. And that is why if you can't, you know, handle that with a significant part of your portfolio, don't start having some FOMO on it.

CHRIS SIPES CFP®: Yeah. And that's, that's one of the most, I guess, frustrating or difficult things about investing is that we. And I say we like the royal we, including myself, are susceptible to creating narratives and seeing storylines that are there, we think are there, that are not right or may not be exactly how we think they are. And or the market does not respond to the story the way that you think it would or should.

CHRIS SIPES CFP®: And the timelines are different. Right. You know, a lot of times the market sees something coming that. That it's not obvious until it's later or sometimes it doesn't. So it's sort of like being in one of those hall of mirrors where you're just not sure what to trust. And I feel like that's heightened when you have a single stock because you can really hone in on the story, the emotion.

CHRIS SIPES CFP®: I won't mention the stock, but there's a stock that everybody knows. It's tied with a lot of movies and characters that we all know and grew up with and such.

DANO WEIR: I feel attacked right now. You're attacking me right now.

CHRIS SIPES CFP®: I know. That stock really hasn't gone anywhere in 10 years, right? I feel so attacked. But when you look at it, you're like, how is this possible? They have all these franchises and places you can go to experience these stories. And anybody that's taking kids there know it's cost a small fortune. So you're like, how could this stock not just be printing money, right?

CHRIS SIPES CFP®: And somehow it just doesn't. And, so you, you never know. And that's why going back to Bernstein's quote, being diversified is an aggressive strategy because you're in places that you might not otherwise be where those returns can pop up totally unexpectedly. And, and so you want, you want to be there. Usually when you expect it to be there, it's probably, probably not going to happen.

DANO WEIR: So, all right. Let's get to the market this week because obviously event-driven, we mentioned that a few times. You've got the war in Iran, whatever name we're giving that, however long that's supposedly going to last across many different assets, definitely having a down week. So let's start here with February.

CHRIS SIPES CFP®: Yeah, we have kind of two simultaneous narratives, you know, speaking of narratives that you shouldn't follow. But here's what is happening. Obviously, the war in Iran, driving. A lot of bad news, bad headlines, the straight-of-the-moves, can't get any supplies, no end in sight, yada, yada. But there's also this whole private credit, private equity blow-up happening in the Markets at the moment.

CHRIS SIPES CFP®: There was a gentleman, I feel like this is a movie in the making, Dan. Who knows? This has only come out over the last couple of days. This guy with no like credentials, he wasn't like a fund manager or anything. He was just some dude that got really, really interested in private equity and private credit.

CHRIS SIPES CFP®: And he published this whole like manifesto on one of the largest private credit funds and how a lot of the loans in his opinion are, are, are not solid essentially. And he even wrote a letter to like an open letter on, on X to the Treasury saying like, Hey, I think something's going on here. You guys should look at this. And it's really compelling.

CHRIS SIPES CFP®: It's interesting. So that's happening too. But I feel like most people are not really I guess, tying any of this turmoil to that part, other than maybe financial folks are like, whoa, maybe this is something that's happening. And it's not all just the events in Iran. We'll only know in hindsight, right? Or at least we'll only tie something to it in hindsight.

DANO WEIR: But whatever it is- Parallel to that, I want to throw in similar to 9-11, where there were all the writing on the wall for the dot-com bust. And then 9-11 is the catalyst, right? So that was all there anyways. And then 9-11 is the reason.

DANO WEIR: And 9-11 was going to cause a problem anyways. Obviously, many problems, but financially, financially, all the writing was all, you know, the recipe was already in the books for that to be a problem and very similar now.

CHRIS SIPES CFP®: Yeah, exactly. Usually when you see things like this happening, it takes a confluence of many factors. It's hardly ever just a simple one. One thing explanation, right? It's a whole bunch. It's like the conditions are correct for this thing to happen when it happens.

CHRIS SIPES CFP®: So regardless, what is happening, I think, is the most important story is the rise in interest rates. And here we're looking at the two-year Treasury versus the target Fed funds. So the two-year Treasury is, of course, set by the market, the supply and demand of treasuries.

CHRIS SIPES CFP®: In the market, however, we look at this as, and many market participants look at this as a kind of a market price for short-term interest rates. And that number is, that rate is peaking up and over the Fed funds, which is not a good sign for rate cuts from the Fed. If anything, there's actually been priced in, starting to be priced in a rate hike this year. So.

CHRIS SIPES CFP®: You know, I, I, there's a, there's several people, I guess, Dano that I would not want to be in this world, but probably close to the top of that list is going to be Kevin Warsh coming in to be the Fed head of the Fed, with the set of circumstances, he's going to be handed here.

CHRIS SIPES CFP®: Shortly the Fed met this week and kept interest rates, the same, unchanged, which is what everybody was expecting. There was only one descent, which was Moran. Which, based on the short-term market expectations of inflation due to the events in Iran, the interest rates are starting to reflect that expectation of inflation.

CHRIS SIPES CFP®: Remember, bonds are very sensitive. Interest rates are very sensitive to inflation because fixed-income purchasers, people that own bonds, don't want to lose money to inflation and therefore they require a higher return to compensate them for that inflation.

CHRIS SIPES CFP®: So interest rates have jumped significantly on the short end. They've also jumped on the longer end. This is the 10-year Treasury widely looked at for longer-term credit, specifically mortgage loans that are going to affect most people that might be listening to us.

CHRIS SIPES CFP®: The longer term rates are reflected. You can kind of think of the 10-year Treasury as sort of like the base rate because if you're an investor and you can buy a Treasury where you're not going to be worried about the credit risks, then you have to be paid something more over and above that Treasury rate to take on the additional risk.

CHRIS SIPES CFP®: So there's a spread over and above what treasuries are for things like mortgages. Car loans, credit card rates, et cetera, et cetera, on down the spectrum of riskiness. And this is also tied to that private credit situation as well, because if you're lending money to a company, that's what private credit is for the most part, is lending money to a company.

CHRIS SIPES CFP®: And a lot of those companies may not even have revenues yet. It's essentially like, hey, invest in us because we've got this great business plan and we are going to make money at some time in the future. So the farther you go out on that risk spectrum for credit, typically the higher the interest rate is going to be.

CHRIS SIPES CFP®: So if the base of that credit is treasuries, when they go higher, it pushes everything else higher. It makes money more expensive. It makes the conditions tighter in the market. And so the rise in interest rates is happening in the Markets right now in... Response to the events in Iran.

CHRIS SIPES CFP®: Which is tied to the fact that fertilizer and energy, et cetera, all these things are going to likely be more expensive, even if things were to end today. The short-term expectations on inflation today jumped over 5% to a little over 5.25% based on the, what they call them, inflation swaps, I believe.

CHRIS SIPES CFP®: And so the market is pricing in a significant rise in inflation in the short term, which can be a problem for interest rates. Obviously, that's being reflected in sentiment.

CHRIS SIPES CFP®: And, you know, I think it's important if you're an investor to remember that there's always going to be downturns in the market. That happens regularly. This one. At least so far, is not even that severe on the scale in terms of what it could be. If, you know, when you do see these different cycles, that's always going to happen.

CHRIS SIPES CFP®: There's always going to be something bad happening at the time that the narrative is tied to. It's never like, hey, everything's great. Let's sell our stocks, right? There's always going to be some event that looks very bleak.

CHRIS SIPES CFP®: That it looks like there's no end in sight, that people get worried, well, what if this happens, this happens, this happens, this happens, and then people tend to sell in that scenario. Now, historically, who knows what will happen in the future because, you know, history, you know, isn't the indicator of past performance or whatever the disclosure says. We all know that, right?

DANO WEIR: Past performance is not indicative of future results.

CHRIS SIPES CFP®: Yes. However, usually, and we're going to get into that here in a minute, usually these things do recover. It depends on what the timeframe is. We've gotten really used to very quick recoveries here in the last five years, right? We're used to kind of instant gratification.

CHRIS SIPES CFP®: But usually when you see sentiment as bearish as it's getting, And I'm guessing next week is probably going to get worse.

CHRIS SIPES CFP®: It's, it's jumped up to over 52% bearishness. Typically in the past, when you see that bearishness get into 50 and 60 percentiles, that has been a contrarian indicator because usually when people are feeling really, really badly, typically the Markets start to kind of recover, you know, it's not too far out.

CHRIS SIPES CFP®: So, so So counterintuitively, the worse people feel when they answer these kind of surveys, the more comfortable I think you should feel moving forward. Now, the CNN fear and greed index also hit 17, extremely low, extreme fear.

CHRIS SIPES CFP®: Bitcoin fear and greed is at 11, extreme fear. So all the indicators are agreeing with one another. Now, if you're just reading the headlines, you're probably thinking, oh my gosh, this is a horrible pullback in the S&P.

CHRIS SIPES CFP®: And really, going back to what I just said, I don't know if this makes people feel better or worse, but we're only about 6% off the high as of when this chart was put in. It might be a little bit more today. But when you look at the last drawdown, so these are all like how far off the high we were, right?

CHRIS SIPES CFP®: So further down is obviously worse. And you can see 2008 is the last major, major correction that we had. You mentioned the dot-com bust, Dan, when we started out back there in 2000 and 2002. That one took a long time. It was a grinder all the way down. But when you look at where we're at right now, this is actually just noise so far, like actual normal turbulence at this point.

CHRIS SIPES CFP®: So thankfully, at least for right now, the market is not. Is not actually panicking that bad over this. It's probably saying something like what we had last spring is, hey, the pattern here has been that we, that not we, President Trump throws a grenade into the room, blows everything up, creates a bunch of chaos for a week or two in some area, and then suddenly changes course.

CHRIS SIPES CFP®: And then we're onto something different, right? And the market, at least right now, what it's saying to me is like, That's what the expectation is here as well. Just like the tariffs, just like the other times that we've had these kind of pullbacks, these quick pullbacks in the market based on an event-driven situation, I think the market is thinking, hey, this is temporary.

CHRIS SIPES CFP®: We're going to get some short-term pain, and then he's going to change course again, and we're going to be on to something else two weeks from now and barely even remember this happened. I don't know. But at least for right now, the market seems to be pretty sanguine about it overall.

DANO WEIR: And let's look at this in detail, just because that is the title of this week's episode, which is Springtime Deja Vu. Chris, I do feel like you and I have already done this show because I believe it was this like maybe even this week last year that Darren was out of town and you and I were just doing the show.

DANO WEIR: And the investor, the the CNN fear and greed index was in the teens. And then and then, lo and behold, here came the Liberation Day.

DANO WEIR: Since Liberation Day, the six months after Liberation Day, not till now, but the six months after Liberation Day last year, Trump's words, not mine, the tariff event, the S&P was up 35%. That's just the S&P, mind you. And so we're not even at, as you said, we're not even at those depths right now.

DANO WEIR: And it just speaks to the idea, which we say over and over again, which, you know, you're not going to hear from every advisor. But speak to that idea that it's not always up and to the right. And you have to keep that in mind, you know, as you as you enter into investing.

CHRIS SIPES CFP®: That's correct. No, no. What to expect. You know, we often talk about a portfolio as if you're going to be moving to a region of the country. And if you're moving to some region of the country, you should know what that weather is like, you know, what the spectrum of outcomes is likely to be. Right. And be okay with it because you're going to live there.

CHRIS SIPES CFP®: And you can't just up and move. It's very detrimental to up and move once you've moved somewhere unless you have a really, really good reason. It works the same way with investing. If you say, hey, I'm going to be aggressive. I know what I'm in for. I'm okay with the big swings in the weather and I'm going to ride it out.

CHRIS SIPES CFP®: You need to make sure that you remember that when the hurricane's hitting, right that's the Florida thing it's like A lot of times the weather there is great, but then sometimes it's awful. But by the time the hurricane comes, it's really tough to uproot and change and make that work over time.

CHRIS SIPES CFP®: So one of the worst things you can do is switch strategies when you're feeling either a lot of panic or you're feeling a lot of greed. Either one of those situations where you feel your emotions pulling you in one of those directions. It's tough, but you got to fight. You got to fight through that.

CHRIS SIPES CFP®: So for better or for worse, war is sort of the norm when you look at it over the long term. This chart from Charlie Bielo, and I'll read what Peter Malouk said. He says, wars can move Markets in the short run as they are today, but over the long run, stock returns are driven by economic growth and corporate earnings.

CHRIS SIPES CFP®: Since 1941, the world has seen almost constant conflict, and yet a dollar in the S&P 500 still grew to over $12,000 today. Now, as you can see, all these wars since 1941, including the big one, World War II, this has happened before. It'll happen in the future. And we'll look back on it as...

CHRIS SIPES CFP®: You know, just another event, essentially a longer term from an investing perspective, the Markets get through it. Now that's not to say, Hey, put all your money in the S And P 500, because look at how it's done. No, you, you, you want to be more diversified than that for most people. And, make sure that you're in different asset classes, to, to absorb some of that risk.

CHRIS SIPES CFP®: Okay. What you had just mentioned, Dan, if we look at some of those annual S&P 500 returns, this was from the Burry Tracker. 22 years ago today, the U.S. Invaded Iraq. And just like the Iran versus Israel situation, everyone expected a market crash.

CHRIS SIPES CFP®: What happened after the invasion, the S&P 500 bottomed on March 11th, which was actually nine days before the invasion. By year end, the S&P was up 22%. Halliburton was up over 36% that year. Oil dropped from $37 to $25 as the war premium vanished. The S&P did a V recovery before a single boot hit the ground. And you see these other conflicts on here as well.

CHRIS SIPES CFP®: These are returns during periods of war. So And it's terrible to say, Dan, because obviously war is an awful thing. It inflicts a lot of pain on a lot of people.

CHRIS SIPES CFP®: So I am in no way saying like, hey, let's start more wars because it's good for the Markets. Definitely not. That's not the, I guess the... Point here is to let people know that this has happened before and that from a financial perspective, it doesn't mean it doesn't mean that the narrative has to play out the way you might think going into it.

DANO WEIR: And this is just a specific this chart is pulled to show what these periods look like. You know, there's lots of probably even better uptimes other than war, which, you know, which is what you would root for. So, yeah, this is just showing giving an indication of. Hey, how have things been during times of war previously? Certainly not something that we're hoping for or want to see in the future or currently.

CHRIS SIPES CFP®: That's right. Now, a common portfolio mix is the 60-40, which is 60% stocks, 40% bonds. I guess the most common reflection of this would be the S&P 500 and the Ag or 10-year Treasury index. Which is probably what they're using here from Goldman Sachs.

CHRIS SIPES CFP®: Although I don't have that specific information, apologies here, but you get the idea. Like what, what have been the drawdowns? And when we say drawdown, that means from the height of the portfolio to, to the low of that particular session before it started going up again.

CHRIS SIPES CFP®: Because usually people don't measure their portfolios based on, you know, the time of year or a certain date. They, they measured off of two things. One, when they put money in, that's, that's a really common one. And two, what the high point was, well, it got up to a hundred thousand and now it's worth 80,000. So that, that drop is called a drawdown.

CHRIS SIPES CFP®: And if you look at the 60, 40 during these different times of war, you can see that there's been times where, the Yom Kippur War being, kind of. Somewhat similar to this in that the oil shock was felt during that time. The S&P, because you also have the max oil increase here, so that one was a 200% increase in oil prices. And the 60-40 was down 29% in that scenario, while the S&P was down 45%.

CHRIS SIPES CFP®: And then there's been other times like the Iranian revolution in 79, the 60-40 barely had any impact, or the time we attacked Iran last year. It was funny, Dan, not funny, but when I was asking the computer when we struck Iran for some of our charts today, it went back to the 2025. And I said, I had to say no. This year.

DANO WEIR: Which time, Fris?

CHRIS SIPES CFP®: Yeah.

CHRIS SIPES CFP®: But anyway, portfolios are going to ebb and flow. Most planning software, if you're a client and you've done a financial plan, you know that we stress test these things. And of course, this time could be different, right? This could be the one-off. There's nothing to say that it has to fall into. What has historically happened. But if you weren't taking any risk, you also don't get any reward. We know that from bank accounts.

CHRIS SIPES CFP®: If you don't want to see your balance fluctuate, you know what kind of returns you can get. And so the trade-off, everything in life has a trade-off, and the trade-off for getting returns over time is you have to be comfortable taking risk. You have to be comfortable. Sitting through weekends like this where, you know, things are escalating and it looks pretty bleak on the, on the energy front, et cetera.

CHRIS SIPES CFP®: That's what you're getting paid for over time to take that risk. And if there wasn't that risk, you would not be getting paid anything for that. You would not have growth in the portfolio. So I know it's, it's not fun. Nobody likes it. But it's, it's the price of admission.

DANO WEIR: And another thing to consider, I've given this example a hundred times, but it's really applicable here. The old adage, Chris, like you don't lose it until you sell it. So yes, theoretically, the value is down.

DANO WEIR: Take a look at your house. If you live in Sonoma County, I live in Petaluma. My house from its pandemic peak is down 20%. I've lost 20%. And yet I was never going to sell it anyways, at least not right now. So it's sort of irrelevant. One. And two. Look at what I bought it for comparatively, I'm still up 50%.

DANO WEIR: So just, just to give a perspective on it, you know, your portfolio is, is no different. So it gets back to that planning question of like, okay, I mean, nobody wants to see the number go down, go down, get that. But it gets back to that planning question of before you emotionally start feeling it, ask yourself, well, what is it even for?

DANO WEIR: What is this money for? Is it just so I can have. Big number that I see and feel good? Or is it for something specific or what's for what? And, you know, that's, those are the questions and the conversations you have with your advisor. That's why you have an advisor.

CHRIS SIPES CFP®: Yep. If you try to take the perspective of look, once, once the Markets do recover from this and who knows when that will be, but once they do, you'll look back on this as an opportunity, you know, go back and watch the bear market playbook video from last spring. At that time, we had no idea what was going to be happening. It felt awful. The Markets were selling off and it felt awful.

CHRIS SIPES CFP®: And then by the end of the year, you look back on it and go, gosh, man, if I had some extra money to put to work at that time, I should have done that, right? It looks as an opportunity in hindsight and it's likely that days like today will as well. Now, let's look at where we're at for the year so far on different asset classes.

CHRIS SIPES CFP®: This is year to date of some of the major indices. We've got the NASDAQ down a little over 5%. The only index that's still green on the year so far is the emerging Markets, although they got hit really hard today. And so they're barely positive on the year so far. So very similar field to last year where we kind of sold off into the spring and got kind of a slow start to the year.

CHRIS SIPES CFP®: But on the encouraging side, one of the indices that's actually right behind the emerging Markets in terms of what's done the best is the small caps, the US small caps. Now, those are considered to be... Kind of more the tip of the spear in terms of impacts of everything. And so the fact that they're not down the most is somewhat of a good sign.

CHRIS SIPES CFP®: Also today, financials were positive and financials typically lead the market in a lot of ways. It's like Stan Druckenmiller says, the best economist is the inside of the stock market. And so financials kind of bottoming out, at least so far, who knows, could be a good sign. Now, if we look at those different sectors here. One thing, Chris.

DANO WEIR: About the small caps that I think is interesting is we've talked about the blow up in the private credit Markets. That's interesting that small caps would be green simply because you would presume they'd be looking at credit first, right? Not necessarily borrowing from private credit. So interesting that those two would be. Not in alignment.

CHRIS SIPES CFP®: Yeah. Yeah. Very interesting.

CHRIS SIPES CFP®: Now, if you look at the sectors, this is year to date, of course, the, the one that's, the golden child right now is the energy sector XLE, just having a rip roaring year so far. However, let's see, what's, what's second would be consumer staples and obviously a defensive sector people go to, in times of stress, as well as the utilities, XLU.

CHRIS SIPES CFP®: XLI, that's industrials. So those are all positive on the year so far, along with materials. And just barely positive is real estate, XLRE. Now, if you look at what's negative on the year so far, you've got a lot of the tech and tech adjacent sectors. So communications.

CHRIS SIPES CFP®: Technology, XLK, XLV, healthcare, XLY, which is your consumer discretionary. So what are people going to spend money on? And it makes sense that if people are concerned about increased food prices, increased energy prices, et cetera, they're probably going to be spending less on discretionary items.

CHRIS SIPES CFP®: And then at the bottom here, we've got financials year to date down about 10%. And so the financials, the banks, et cetera, really struggling this year. And part of that could be that private credit, private equity scare so far. But like I said, that kind of masked the last few days here where...

DANO WEIR: Financials have not been selling off which is interesting given that basically everything else has been so maybe a shifting current there is a silver lining and if you were trying to draw a narrative out of that Chris i mean let's flash back to even just August or July when there was just ai euphoria and everything is going to be ai and every you know Stanford grad who actually has zero jobs, but they start they they threw out a startup with a and I in the name, we're getting their series, whatever, all this funding, and there's money just going into tech, tech, tech, tech, tech, because it's going to be and then some happened in September, October, and the narrative changed and chat GPT is off and we're on to Gemini, you know, and now you're seeing you're seeing kind of coming back down to earth.

DANO WEIR: And, you know, going to things that are, like you said, defensives and energy. And it just, that would be how I would read this from a narrative standpoint.

CHRIS SIPES CFP®: Yeah. And that's a great point, Dan. You know, I don't have the exact date, but think back when, when everybody was, how every phone call was, how do I get into AI? How do I get into that stock that I can't pronounce?

CHRIS SIPES CFP®: And we were saying like, Hey, you know, this, this feels a little like. Pump the brakes here because typically when people are just tripping over themselves to get into something, that's when you want to have some caution.

CHRIS SIPES CFP®: And I can tell you that nobody was saying, how about we buy some energy in my portfolio? Have you thought about consumer staples? Can we add some utilities? Do you any, do you know any good utility stocks? Like zero people were asking about that.

DANO WEIR: Chris was just dying. He's saying, somebody asked me for international somebody. Somebody come up to me and say, what are your thoughts on?

CHRIS SIPES CFP®: Yeah. Well, it just goes back to when it comes to investing, we really can't trust our herd instincts. The thing that helps us as humans survive so well is our herd instinct.

CHRIS SIPES CFP®: But when it comes to investing, it can really shoot you in the foot because when everybody's running in one direction, whether it's good or bad, typically you don't want to be a part of that herd. It's a very poor long-term investment strategy. So anyway, off the soapbox. Now we take a look at the S&P 500 here. A lot of kind of technical damage done over the last week or two.

CHRIS SIPES CFP®: We lost the 200-day moving average, which is that red line. We're not yet in a downtrend, but you've got the 50-day moving average definitely curling over. You can see in the past this Last spring, we had the 50-day curl over. We got what they call the death cross when the 50-day crosses over the 200-day in the downward direction, which indicates a shift in trend, a confirmed shift in trend.

CHRIS SIPES CFP®: We are not there yet. However, it's curling over. And I forget which investor said it, but somebody had the quote of nothing good happens under the 200-day. I think that was Paul. Tudor Jones, but I could be wrong on that. And it's like, it's like you tell your kids or you tell yourself now that you have the experience, like don't, don't be out past midnight. Nothing, nothing good is going to happen.

DANO WEIR: Nothing good happens at 3am.

CHRIS SIPES CFP®: No, no. Okay. Now we take a look at the NASDAQ, the Q's same thing, technical damage. We're down under the 200 day moving average. Same thing, curling over a bit. But not quite in a confirmed downtrend yet. Could find some support around here. If we are going to get kind of a quicker turnaround, you would expect that to start happening here pretty soon around the 200-day moving average in these indices.

CHRIS SIPES CFP®: Now the small caps, and I created this just before the end of the day, so let me just confirm the small caps did stay above their 200 day. So that's a bullish, that's, I guess. Maybe not bullish. Let's not get too over our skis here. But it's a better sign than if it finished under the 200-day. So the U.S.

CHRIS SIPES CFP®: Small caps held their 200-day moving average there, just basically touched it and checked in. So again, if we're going to get a short-term kind of reversal in the market, you would expect to see that around here on that 200-day if that's going to act as support for this market. And we were seeing a lot of strength in the small caps coming into this event.

CHRIS SIPES CFP®: The hopefully that continues now we take a look at the developed Markets they've really taken it on the chin now this is going to be your japan your europe canada those types of Markets japan makes up about 25 of this now japan also was was on a tear coming into this doing really well there do they call the the head of the Japanese government the prime minister, Dan?

CHRIS SIPES CFP®: It is the prime minister, yes. Okay. And she's in town in Washington, D.C. Right now. Yes, she is.

DANO WEIR: An interesting moment there this week, let's say that.

CHRIS SIPES CFP®: Yes. But anyway, we've got the developed Markets under their 200-day moving average as well. I guess maybe we should have started these charts with a disclaimer like, hey Hide the kids. This is going to be a little ugly going into these charts.

DANO WEIR: Should have given a trigger warning, Chris.

CHRIS SIPES CFP®: Should have given a trigger warning. You might need your emotional support animal for the charts this week. Now, emerging Markets, again, a lot of strength coming into this event. They were really, I mean, you can see where they've been even after this sell-off is still looking.

CHRIS SIPES CFP®: You know better than some of the other other charts that we've looked at so far but nonetheless a pretty good sell-off now that one's a ways away from its 200-day moving average so for whatever reason a lot of times you'll see you'll see those charts kind of check in with those 200-day moving averages once you get through the 50-day moving average and you kind of ricochet off of it like you have here where the 50-day moving average was acting as resistance overhead.

CHRIS SIPES CFP®: And there's probably market technicians, Dan, that are, if they're watching this, I don't know if we have any, but if anybody is, they're probably cringing because I am not a market technician. I'm just reading basic 50 day and 200 day.

CHRIS SIPES CFP®: So just take it for what it is. Could be way off, but it wouldn't be surprising to see that emerging market. Dip a little further and check in with that 200-day moving average given where it's at today.

DANO WEIR: Darren is listening somewhere because he always listens when he's not able to be on the show. Darren's listening somewhere and cringing. He's saying, Chris.

CHRIS SIPES CFP®: You could have done this with the candlesticks. You could have done that with the candlesticks.

CHRIS SIPES CFP®: I had to mute teams because I don't know if you're like this, Dan, but if I'm talking on the phone, and this happens all the time with my kids, it doesn't even have to be on the phone. You're just talking to someone, and then someone else starts talking at the same time. It's like my brain shuts off completely.

CHRIS SIPES CFP®: I can't hear and process anyone. It's just, I just, nothing. So I had to turn Teams off. So apologies to Darren if he's typing in all caps right now. That is not what that candle is saying. I'm sorry, Darren. I'm not paying attention because I'll mess up these charts. He did actually message.

DANO WEIR: He messaged and said, spring break gets me every year. That's what he said to me. He's listening. Hey, Darren.

CHRIS SIPES CFP®: Yes. Yes. Alright, so now we take a look at the Ag, which is the kind of most followed bond index, you know, kind of medium term bonds. So this would be your like five to seven year bond. So not short term, not long term.

CHRIS SIPES CFP®: This is kind of the meat and potatoes of the bond market. And, you know, this is why I never celebrate Dan when we start talking about how well the bond market does, because, you know. You get a turnaround. And here we are. The bonds, obviously, we know there's an inverse relationship with rates. So if interest rates go up, bond prices go down.

CHRIS SIPES CFP®: And that's where we're at today. Bond prices headed down as well under that 200-day moving average again. Although, I guess on the bright side, bond investors are used to this pain. We've been in this zone for years. We all went through 22 and 23, the worst bond market in history. So, we're grizzled veterans at this point of the bond market, and this is nothing.

CHRIS SIPES CFP®: But a sell-off in the bond market is pushing those interest rates up, which is, you know.

CHRIS SIPES CFP®: Expressly against what this administration is wanting for things like the housing market, et cetera. So, you would expect to see some support there soon. The long-term bond market, the same thing. And you talk about pain, the bond market has the long-term bond market has been in the pain cave for a long, long time. And, here we are again.

CHRIS SIPES CFP®: You started to see a little bit of a signs of life. In the long-term bonds coming into the year with interest rates dipping down. And that's all been erased and then some. And so we're back in this familiar territory of the long-term bond. Gold, even gold this week, Dan. Gold's been the one bright spot here for a while. And now I guess we all know why gold was doing so well.

CHRIS SIPES CFP®: Foreseeing what we would be coming into in 26 but now that we're actually in the event gold should be doing really well right wrong gold selling off completely another narrative that's like okay that doesn't make any sense at all at least not in the moment maybe it'll make sense later another on the bright side possibility like hey stocks are not down that much And gold's selling off, so maybe that's saying, hey, there is a resolution around the corner on this that we just can't see yet.

CHRIS SIPES CFP®: Let's hope that that's the case, Dan, and let's hope that that's what we're seeing here. Could also be various nation states trying to raise cash that they need to buy energy, and one of the assets that they have to sell would be gold. That's a distinct possibility as well.

CHRIS SIPES CFP®: Whatever reason gold has really taken it on the chin. But when you look at the long-term chart here, it's, it's obvious that we are, we have been in a unrelenting uptrend in gold. Those, those ski tracks are straight parallel up to one another. And, and so we might, you know, that might've been it for the gold market or, or you can see gold return.

CHRIS SIPES CFP®: To its, its strength. And maybe this is just a short-term self who knows, but definitely some pain there this week as well. Not many places to hide, which is normal when you get a panic sell-off when people are just like, I'm worried about everything. Just take me to cash.

CHRIS SIPES CFP®: That type of selling is kind of what you're seeing in the market right now. Stocks getting sold, bonds getting sold, gold getting sold, everything getting sold. And, And... Typically, those are panics. Those tend to be short term in nature. And you really don't want to lose your head in a panic. That's the worst time to lose your nerve. Another bright spot, I guess you could say, is Bitcoin.

CHRIS SIPES CFP®: We ended the day, I think, here. Let's just see where we're at. We're above on Bitcoin, but we've been really flirting. With that 50-day moving average in the Bitcoin space. We peaked above it a few times. It's been kind of knocking on the door, which is normal when you're getting a trend change. You'll see it just kind of hit the 50-day, go under it, hit it again, go under it, peak above it, under it.

CHRIS SIPES CFP®: It's just kind of fighting with it when you're starting to see a trend change. So let's hope that Bitcoin is turning a corner here, much like financials, if we can get some you know, green shoots there, that would be the tip of the spear so that even if the news continues to get worse, but you start to see, Hey, Bitcoin's doing well, financials are doing well.

CHRIS SIPES CFP®: Interest rates start to even out a little bit. That would be a sign that, that the market is, is, is starting to, to shift a little bit. So, so some signs of life in the Bitcoin market, hopefully that is a, a good sign, to start the year, start the spring. Sorry. With that, I think that's all for the charts this week, Dan.

DANO WEIR: Chris, we didn't prep this beforehand, but I'll just ask you because it just popped in my head because we've mentioned a few times, you know, we would recommend not making drastic changes as we typically do during events like this. Have you in your investing life, prior even to being an advisor, experienced fear and gotten out and then regretted it? Has that ever occurred to you?

CHRIS SIPES CFP®: Yes, yes, it has many times. And I've experienced it with, with clients. And And, you know, sometimes no matter how much you kind of talk through it and try to, calm the nerves and such, sometimes, I'm not convincing enough. I'll still try to get Darren to convince them cause he's way more convincing than I am.

CHRIS SIPES CFP®: But sometimes you can't always convince. Right. And, and people have gotten out and, you know, like I said, this time could be different, Dan, this could be the end. It could be all over. Right. But if it's not. If it's not, and if this is like the other events in history, then we'll get through it and it will be okay.

CHRIS SIPES CFP®: And you'll be glad that you didn't make a drastic decision. But I feel like most of the time in life, whenever you make a decision because you're emotional, those turn out to not be smart decisions, right? So, like I said, turn off. Turn off the portfolio, go watch Some March Madness, unless you're an Ohio State fan. That might make you feel even worse.

CHRIS SIPES CFP®: But try to just control yourself, control your emotions, let yourself kind of think it through, because historically that's been the smart thing to do.

CHRIS SIPES CFP®: I distinctly remember working at a bank in 2008 during the panic of 2008 in the spring of 2000. It was this time of year, right? Markets selling off, everything collapsing, people were in a lot of pain. And I was at a bank in St. Helena, California. And for whatever reason, I'll never forget this. This guy walks in and he says, man, if I were you, I would buy everything you can buy with both hands right now.

CHRIS SIPES CFP®: And I was like, like, what? You know, cause everybody was kind of like in the doldrums. This is, you know, this is the worst ever. And I'm in no way comparing what we're experiencing today to what we were experiencing in the spring of 2008. That was totally different. But, I'll always remember him as kind of like a, a buoy in the storm, right.

CHRIS SIPES CFP®: Of like, hey man get gather yourself like what I'm doing is buying everything that I can buy because everything is on extreme sale right now. Everybody is running for the exits and dumping everything at fire sale prices. And man, at the time I thought that guy was crazy. And now I look back and go, man, he's probably, he's probably extremely wealthy now if he actually did what he said he was doing, which he probably was.

DANO WEIR: So here's something else to consider, too, when you when you're when you're when the performance is is feeling painful. Chris, I'll just talk about this for a second. You know, there is another aspect to your portfolio, which is the the tax alpha, the tax angle of your investments. We call it the block and tackle the extremely boring parts because everyone just kind of wants to talk about how much they're up.

DANO WEIR: But when you look at what you're paying in taxes, that can be some of the boring block and tackle work, that can help offset some of these painful times. And so I bring that up to say, we just this week on our other podcast, it's all money, which is on this very channel where you are, whether it's YouTube, Spotify, or Apple podcast. We just dropped a new episode on Thursday, from our tax aware investment solutions.

DANO WEIR: They are six strategies. That we use to help clients and you achieve optimal tax outcomes. So what does that even mean? I'm sure you're maybe thinking, I don't care. I would never want to listen to an episode about tax strategies. And yet it's those things in those times, Chris, where, you know, you're laying the foundation to feel better at times like now.

CHRIS SIPES CFP®: Dan, I'm just happy that you for once show a picture of me that's not AI generated with my teeth are terrible and blah, blah, blah, which I don't know if this picture is better or worse, but at least it's a real picture. It is.

DANO WEIR: It is. So that was a fun episode to do together. And Chris and Darren providing great insight on our tax aware investment strategies, learning some new tools in our tool belt that. Can, that in some cases I was surprised to learn about. So I hope you check that episode out. If you're one of our clients, those are available to you.

DANO WEIR: Just get to our YouTube Channel, which you may already be on. It's also all linked up at SonomaWealth.Com. That's also where you can book your wealth analysis if you're new to the firm and you want to learn what we're all about. Chris, thanks so much for being with me this week, for being on the show. Darren will return next week and hopefully with a better theme to the week.

CHRIS SIPES CFP®: With a fiduciary commitment. Learn more at fermata401k.com. Fermata Tax, personalized tax services for yourself, your family, or your business with an emphasis on efficiency. Find out how at fermatatex.com. If you haven't already, like and subscribe to Fermata On The Markets on YouTube, Spotify, and Apple Podcasts.

CHRIS SIPES CFP®: Fermata On The Markets features human hosts, editors, and voiceover talent. Music by Dr. Delight on Soundstripe, voiceover by Joan Alloway Nash. Thank you for listening to the very end. We appreciate diligent viewers and listeners.

CHRIS SIPES CFP®: Fermata Advisors, LLC is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempt from registration requirements. This content was produced by Fermata Advisors, LLC, DBA Sonoma Wealth Advisors, DBA Fermata 401K, DBA Fermata Tax, the opinions expressed by Fermata Advisors LLC on this show are their own.

CHRIS SIPES CFP®: Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.

CHRIS SIPES CFP®: Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented.

CHRIS SIPES CFP®: Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives.

CHRIS SIPES CFP®: And is not intended as recommendations appropriate for any individual. Viewers and listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.