If you are even a casual observer of markets, or the news, you have noticed that the markets are currently under some pressure. This time the pressure is associated with uncertain administration and Federal Reserve policy. But it really doesn’t matter the source or catalyst of the decline. I often say that the market is down because of “fill in the blank” reason(s).

A stock chart for the last few months is not very encouraging, but if you expand the time frame, market moves that cause consternation today are merely potholes in the road.

I hate tariffs. Anyone in our office can confirm that. Or anyone I know for that matter. I firmly believe that tariffs are an economic evil, second only to communism. Today I will lay out the problems with tariffs when they are employed for the long term. The last part of that statement is important – more on that later.

What a difference a few days make. Last Wednesday, the Atlanta Fed was forecasting GDP growth of about 2.3% for the first quarter of 2025 with its GDPNow tool. As of Monday March 3, 2025, that forecast swung to -2.8%. If this is correct, it will be the first quarterly contraction since 2022.

From the Fed, “Latest estimate: -2.8 percent — March 3, 2025

“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.8 percent on March 3, down from -1.5 percent on February 28. After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcast of first quarter real personal consumption expenditures growth and real private fixed investment growth fell from 1.3 percent and 3.5 percent, respectively, to 0.0 percent and 0.1 percent.”

Sovereign Wealth Funds (SWFs) are investment vehicles owned by countries. These funds can act as investment accounts or development tools, or both. The concept of a sovereign wealth fund is to grow current funds for the benefit of future generations.

These funds have several potential uses and countries use them differently. Some countries use SWFs to invest their economic or trade surpluses (What a concept!). This allows for the future stabilization of the economy in times of financial stress. It can also reduce the dependency on a singular commodity. If a country is an oil rich state, it makes a lot of sense for the country to invest a portion of its petroleum proceeds into a SWF for diversification away from oil in order to reduce economic shocks. Some countries use SWFs as public benefit pension funds.

SWFs often provide a source of funding for multinational firms engaged in global investment and trade, contributing to economic development and job creation. SWFs can also be used to further geopolitical agendas.

DeepSeek R1 has caused an uproar in AI land. ‘Bigly’ as the president would say. It was a flaming salvo out of the dark that took the US AI titans Nvidia, Open AI, Microsoft, Google Meta and Amazon by surprise. Or did it?

This installment is the last in my series on alternative investments. While this series has been nowhere near exhaustive on the subject, it has highlighted a few of the more common investment types in the alternatives arena. You can read the previous issue on private credit funds here and the original overview on alternative investments here.

Private credit funds are debt-like, non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies (BDCs) to fund private businesses. These funds typically engage in direct lending to private companies at above market rates.

This is the latest installment in our series on alternative investments. You can find the original overview here and our last article on real estate investing here.

This letter is the second installment in our series on alternative investments. You can find the first in the series here and an overview of alternative investments in a previous letter here.

Real estate is a very big sector and probably the best known of the alternative investment group to retail investors. How big is the real estate sector? Well like many things, that depends from which angle you are viewing it. The real estate sector is generally broken down into three segments: residential, commercial and industrial.

Historically, private equity investing has been the province of institutions and very high net worth individuals. Today, private equity is more widely available thanks to regulatory adjustments regarding investor suitability, increased transparency of the asset class in general, and the emergence of ‘fintech’ driven alternative investing platforms. These elements combine to bring access to private equity to more investors than ever before.