Today is October 6, 2025. The stock market is flourishing, Bitcoin is at an all-time high, Gold is also performing nicely this year, yet we are on our 6th day of the government shutdown, and the economy is showing signs of weakness.
- Government Shutdown:
- If you are a business waiting on a small business loan this may be delayed due to the shutdown, If you are employed by the Federal Government you are not receiving pay and if you are deemed a non-essential worker you are no entitled to back pay, If you are an essential worker you are presently working without pay. If you are a traveler, you may be impacted by increased absenteeism from agencies such as TSA.
- Market Performance:
- So far this year the S&P 500 has reached 31 record highs, investors seem resilient as they look towards strong corporate earnings fueled by AI spending and potential rate cuts by the Federal Reserve. What this means to the average investor is that their balances are up, however, you are paying up for US stocks as you continue to invest for retirement
Are we enjoying the roaring 20’s? Or is this more like 1999?
- Valuation Metrics:
- PE valuations are creeping higher; this is important because it is the stock valuation metric that shows how much investors are willing to pay for each dollar of a company’s earnings.
- Currently at 22.8X forward earnings, we last saw these values in 2021, 2022 and before that in the early 2000’s
- Lessons from the Past:
- In the early 2000’s we also had a new revolutionary technology with some excessive hype, we also saw market concentration in the tech portion of the markets, and we are seeing that today in the “Magnificent Seven” now we are building out AI datacenters as an infrastructure buildout like that of the early 2000’s. What is different is that this time adaptation of AI technology is happening at a much faster pace than the adaptation of the internet, the companies we are investing in are profitable and last time during the bubble some of the highest valued companies were not profitable.
How to navigate this challenging market??
- Diversification:
- To remain cautiously optimistic let’s not forget the basics of diversification.
- International stocks are also performing very well and now is a good time to add to your positions that are not achieving the market outperformance that tech has had. Rebalancing is a great way to take profits in your portfolio and keep your
- portfolio ready for changes as the economy navigates all these market forces.
- Cash Allocation:
When it seems like you can’t lose investing in the stock market it is important to look at how much cash is in your emergency cash accounts and how much cash you may need in the very near future, no matter how tempting it is to invest everything, don’t! Please keep cash that you need to spend liquid so that you have it when you need it.
- Looking to the Future:
- Keep yourself engaged and educated on how your money is being used not only in your portfolio but more importantly in your personal budget. How can you save more or spend less? Keep your focus on your goals and continue to work towards them.
- Although AI and tech stocks are winners so far this year, other sectors are making strides and will eventually benefit from AI efficiencies in their businesses as well. It is important to keep a balanced view of the markets.
Conclusion
- Everything is changing faster than it ever has and slower than it will. The AI spending is helping the economy. The other side of that spending is the job losses due to AI, (those we know of and those we don’t know of yet) the toll these data centers will have on energy and energy prices. There will be many headwinds and tailwinds to navigate in your personal spending as well as investing.
To ask any questions that may be answered in a subsequent blog feel free to send us an email to office.admin@moonshotfinancialgroup.com. Thank you for taking the time to read our blog.