Markets Dimming While Gold Shines Bright

A little free time is crucial to a healthy economy. It allows money to circulate. We should be grateful to those who established this nation with its freedoms and economic miracles. We are blessed with many opportunities, including learning, working, worshiping, and doing what we choose. Happy Presidents' Day.

Chart of the Week

Do countries with higher wages work fewer hours, or do fewer hours worked lead to higher wages? This question has been on my mind since my oldest daughter was in 5th grade. We had the chance to visit JA City in Salt Lake City, where schoolchildren ran their own town for a day. Picture this: a city hall, banks, convenience stores, and kids working as executives, salespeople, and even DJs. Every couple of hours, the CFOs ran payroll for all their employees. Workers had multiple breaks from work but no breaks from the simulation. There was never a time when everyone could be on break together. Break time was spent cashing payroll checks, spending money at stores, and visiting with friends. Take away work, and there would be little productivity. Take away breaks, and there would be little economic movement.

Market Update

The S&P 500 jumped 4.5% the week of the U.S. elections 2024. Since then, it has gained roughly another 1%. Technology stocks have been on a rollercoaster, often leading on good days but struggling on bad ones. What's been winning lately? Gold mining companies. They've been near the top as an industry, and I've been recommending them for months, along with energy and healthcare. I trimmed healthcare when it seemed overextended. I missed a similar opportunity in energy, but that's okay. I continue to hold all three.

I don't plan to add significantly to any areas of the market right now. I'm closer to locking in gains on some of these trades than adding to them. So far in 2025, sticking with the signals and current holdings has paid off. I designed my system to expect volatility, and it's nice to see it working in these times. If things continue to slow, then the defensive areas like consumer products and real estate will benefit.