James Van Stratin (all times unless otherwise indicated)
“There are decades where nothing happens, and there are weeks where decades happen.” Vladimir Ilich Lenin
Few quotes better capture the current turbulence of the global market. For decades, classic portfolios of 60% equity and 40% bonds have been considered the basis for balanced investments. This allocation usually provides protection in recession through bonds, and stocks have returned to an era of economic growth.
We saw this play during crises like 2008 and 2020, when Ishares’ financial debt (TLT) spiked over 20 years amid global uncertainty. Today, that dynamic is covered. The sustained geopolitical tensions sparked by President Donald Trump’s tariffs, stubborn inflation and slowing growth have led to rising Treasury yields and lower bond prices. TLT is currently down approximately 50% from its 2020 high.
The equity side of the portfolio is not that good. US stocks are performing poorly and are caught up in what some call the broader “sel-American” trade. Even dollars, which are usually strengthened in risk-off environments, are weakened as capital flows shift towards the yen and euro.
The new regime focuses on alternative assets. Gold surged to 3,500 ounces for the first time, solidifying its role as heaven. To highlight that meteor rise: precious metals added a market capitalization of around $6 trillion this year. Bitcoin (BTC) has the highest market capitalization ever. Gold ETF inflows measured over a 90-day rolling period are the biggest surge since 2022, approaching the biggest surge in the last decade, the 9 million ounces.
Bitcoin is behind the gold, but it reaffirms itself. It has reached new highs that dominate within the crypto market and is beginning to diverge from US tech stocks. It is increasingly behaving like a valuable and uncorrelated asset in a diverse portfolio. This Friday, the $6.7 billion Bitcoin option expires. This includes a $330 million call option at a $100,000 strike price, setting the stage for the potentially volatile final week of April. Keep alerts!