The Ascend Letter

Planning Corner: Escape the Matrix

Social media algorithms are funny. Now that I operate independently, my whole feed is financial firms selling me something or competitors working the same space. I recently saw an ad for a free seminar for retirees and people approaching retirement. Dinner included.

The catch? A $1 million minimum in assets.

That ad is one of the main reasons I went independent. Higher net worth clients pay advisors more, sure. But the people who usually need the most help are the ones still building. The investors grinding through their accumulation years, trying to get somewhere. And they are the exact people that seminar quietly turns away at the door.

Until life asks a harder question.

• What if a major medical need shows up?
• What if I want to travel a lot more than I planned?
• What if I want to fund a grandkid's college, or give back to my church or a cause I love?
• What if my house hits me with a bill I didn't see coming?
• What if Social Security gets trimmed down the road?

Any one of these can derail a retirement that looked fine on paper.

So here is the question.

Who is better positioned to absorb that hit? The retiree with $1m+, or the one with $150k? See where I'm going?

The people who need the most help are often the very ones excluded from it, simply because they do not "have enough assets" yet. That is backwards.

So what's the fix? Invest early and often.

Get help when you need it. When your car needs an oil change, you either do it yourself or you take it to someone who can. Your financial life deserves the same treatment. There is no rule that says you have to figure it out alone and some advisors, like myself, are willing to work with anyone regardless of asset levels.

Because this is a pattern I am passionate about breaking. Helping younger investors start the journey, optimize it through the building years, and lock it in for retirement. Meeting people where they are, not where their account balance says they should be.

So here is my ask. If you do not have an investment account, open one and fund it with whatever you can, even if it feels small. If you already have one and you feel behind, consider getting a second set of eyes on it. And if you have already made it to retirement, congratulations, that is no small thing. Just make sure you are set up right for the years ahead and aren't giving back your hard earned money in taxes.

The Macro Environment

The economy lost jobs last week, and the stock market threw a party.

Friday's report showed the US actually lost 23,000 jobs in July, the first monthly decline since February, and the prior two months were revised down by another 103,000 (I have always said to watch the revisions). That is a soft labor market by any read. And stocks ripped to fresh record highs on the news.

Why? Because a weak job market means the Fed has less reason to hike, and right now traders will take that trade every time. Bad news is good news, as long as it is the kind of bad news that keeps the Fed neutral or dovish. The S&P closed at a record, tech led the charge, and yields fell.

I want to gently point at two things under the surface.

The first is the earnings everyone is celebrating. When these AI giants report, the headline numbers have been jaw dropping. Google posted earnings of $9.11/share against an estimate of $2.88. A monster beat. Except about $6 of that came from paper gains on its stakes in SpaceX and Anthropic, not from selling ads or cloud services. Strip those investment marks out and the real number is around $2.90/share, right in line with expectations. Amazon did the same thing, a huge slice of its "beat" was a markup on its Anthropic stake, not money the business actually earned.

These are not profits from operations. They are accounting gains from writing up the value of private companies they happen to own. And here is why that matters. Those gains cut both ways. The hyperscalers are marking up their own AI bets, and those same bets are now propping up their reported earnings. If cheaper models come along and those private valuations get marked back down, the blowouts quietly become drags. Some of the strongest earnings in the market are partly a bet on the market staying in love with expensive AI models.

The second thing is the mood. This run to record highs went nearly straight up, led by a narrow band of big tech names while the average stock lagged behind. Fear has drained out of the room. The VIX, Wall Street's fear gauge, has collapsed into the mid-teens, about as calm as it ever gets. And yet the bond market is not singing along. Long term yields stayed stubbornly high on ongoing worry about government debt, and gold quietly broke higher, which tends to happen when people get nervous about deficits and the dollar.

None of that means the party ends tomorrow. Froth can run a lot further than anyone expects, and the trend is still up. But a market this calm, this narrow, and this reliant on paper gains is one to respect rather than chase. This is the kind of setup where a little patience and some dry powder tend to age well.

I will also be keeping a watch on CDS. Something you likely haven't heard since 2008. Credit Default Swaps. This is an indicator of the cost of funding for these tech giants to build out the AI infrastructure. They ran out of cash and are now relying on investors to fund it and CDS aren't looking so hot.