This week on The Art of Investing, Rich McDonald and Mark “Spice” Holden are joined by JP Smith for a wide-ranging and timely discussion on one of the most volatile weeks markets have seen in months.With gold and silver suffering brutal flash crashes, crypto tumbling, US tech rotating hard, and a surprise nomination for the next Fed Chair rattling liquidity expectations, the team unpack what’s really going on beneath the surface, and how investors can spot early warning signs before markets move fast.From AI capex concerns and stretched US valuations to volatility indicators, liquidity conditions and portfolio protection, this episode is a masterclass in navigating late-cycle markets.This Week’s Market Highlights📉 Gold & Silver Flash CrashPrecious metals suffer violent reversals as margin hikes, positioning pressure and liquidity fears collide.💻 Tech Rotation AcceleratesUS software and AI leaders sell off sharply as markets reassess capex spending and future returns.🔄 Money Rotates, Not FleesCapital flows out of mega-cap tech into small- and mid-cap US equities, Europe and Japan.🪙 Crypto Volatility ReturnsBitcoin slides sharply, dragging crypto-linked equities with it, highlighting broken correlations with gold.🏦 Fed Chair ShockTrump nominates Kevin Warsh as next Fed Chair, spooking markets with fears of tighter liquidity and less QE.📊 Volatility Back on the RadarThe VIX becomes a key signal once again, with the team explaining how professionals actually use it.Portfolio SnapshotWeekly performance: –1.1%Total return since inception: +15.24%Top Performers 🥇 iShares MSCI India ETF: +5.0% 🥈 iShares Core FTSE 100 ETF: +2.5% 🥉 WisdomTree Copper ETF: +1.0%Underperformers 📉 VanEck Crypto & Blockchain Innovators ETF: –21.3% 📉 BlackRock World Mining Trust: –9.4% 📉 Invesco EQQQ NASDAQ-100 ETF: –3.1%Key Portfolio Decision🔄 Reducing US Mega-Cap ExposureSold half of the Nasdaq position (–2.5%)Reallocated into US small caps via the Russell 2000Why?Small- and mid-cap companies are better positioned to benefit if economic activity broadens and rate cuts resume later this year.Updated US exposure now favours diversification over concentration.What Investors Learn in This Episode✔️ Why gold and silver can fall fast, even in bull markets✔️ How margin changes and liquidity shocks trigger violent moves✔️ Why AI capex is now being treated as a risk, not a reward✔️ How professionals use the VIX to manage risk✔️ The difference between a healthy rotation and a market breakdown✔️ When cash and short-dated bonds become powerful tools✔️ Why small caps may be the next phase of the US cycle📈 Download the full Portfolio Performance SlidesView the portfolio breakdown: here📧 Get in touch: [email protected] for weekly market insight and to follow the live portfolio in real time.DisclaimerThis podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.February IncentiveGet up to £3000 when you transfer your ISA to IG.Earn 1% cashback up to £300k when you transfer your ISA before 5th April.Use Promo Code ISAPODCASTNew share dealing customers only. Offer available 31st Jan to 5th April 26. T&Cs apply.📋T&Cs :www.ig.com/uk/transfer-1-percent-cashback-feb-26

Ask this episode

“What did the council decide on item 42?” — answered with the speaker and the moment.

Transcript

Related