Portfolio Changes and Market Views

November 3, 2025

As we head into the final stretches of 2025, I want to communicate the changes we made to the portfolio throughout the year, reiterate the consistent process August Wealth adheres to, and express my personal appreciation for allowing us to serve you.

Navigating 2025 has been especially challenging. The financial markets volatility, given the myriads of changes politically and geopolitically have been substantial.

August Wealth is nearly six years old:

Our mission is to help you navigate markets and financial uncertainty, to reduce stress and anxiety, allowing you to better focus your energy on what matters most in your life.

In my view those families who have had the most faith and trust in the AW process seem to have benefited the most. I believe this is a testament to those who have been able to let go of their desire for control in their life. These clients know themselves well, understand their strengths, and understand the strengths of August Wealth.

Our process will not work for everyone. Some prefer different paths which can be equally successful, some allow fear, greed, or past traumas too negatively impact an efficient plan, and some question the process but can never fully adopt it. In some cases, it makes little sense to charge for our time, care, and experience if you cannot benefit from it. Usually, we can find a middle path of assuaging emotion without allowing too much detriment to your

plan, but not always. My philosophy, and August Wealth’s, is not to force something which cannot be mutually beneficial.

As I have shared in these pages over the past 6 years, I have personally grown by letting go of my own desires to control, and you have helped me on that journey. The more I can give to others without counting the cost, the more I relinquish my own selfish desires, the less I try to control outcomes, the richer my life becomes. The better I am at being a husband, dad, son, boss, portfolio manager, advisor, business owner, and friend, the more successful I am. All of this is much more important than “business growth”. Your partnership with August Wealth

is a big contributor to the above; so, thank you!

Thank you also for those that have shared your stories of the benefits you have received from our perspectives and advice, the way we conduct ourselves, and any help we provided in growing your family’s wealth over the years. Hearing that we are positively impacting on someone’s life makes it a little easier to keep moving forward with our mission.

Changes to Portfolios in 2025 and Market Views:

We tailor your portfolio to your specific needs: your goals, risk tolerance, tax bracket, asset and liabilities, income, spending, estate plan, and more. So, although each account’s portfolio is unique, we adjust based on the available set of prevailing opportunities and probabilities. Therefore, it’s possible to provide some broadbrush assessments we have made for you and your family, and the resulting alterations made to most portfolios.

Year to Date and Portfolio Changes:

Some of you have been remarking that your portfolio performance year to date is similar to the broad market index, the S&P500 index. While that may be coincidentally true (it has been a positive year thus far), the makeup of your portfolio is very different. Of course, almost all of us own S&P500 in our portfolios, but it has not been the primary driver of your returns. So, when market pundits or friends talk about being in an “investment bubble”, you can let them know that your portfolio has much greater diversification than the 100% ownership of the S&P, and

you also own a reasonable amount of fixed income. This fixed income allows us to make purchases of companies which trade at attractive valuations in the future if any “supposed bubble” bursts.

What changes did we make:

• First Quarter:

  • Reduced equity exposure because Trump told us he would be making huge changes, we did not wait for the April tariffs announcement.

  • Increased international equity exposure because of attractive valuations outside of the USA, and the potential for a decline in the value of the US Dollar (from a high level on a historical basis).

  • Purchased inflation protected fixed income.

• Second Quarter

  • Sold ALL gold in portfolios (after many years of exposure).

  • Increased international equity exposure further on tariff related declines.

  • Increased USA equity exposure through after tariff related decline.

  • Increased USA technology exposure.

  • Reduced USA real estate exposure.

• Third Quarter

  • Some tax loss harvesting on individual company positions.

  • Added some new individual companies.

  • Sold some companies that realized significant gains since tariff announcements including technology sector.

• Fourth Quarter (thus far):

  • All mining companies are liquidated.

  • Reduced some individual equity positions.

  • Added some private credit because of attractive valuations in one of our preferred ETFs in qualified accounts and for families in low tax brackets.

The above recap is obviously very generalized, and we are happy to answer your personal questions related to your specific accounts in detail, and our rational for the specific changes. Please email or call us.

Market Views:

Are we in a bubble? Is private credit in trouble? Jamie Dimon says where there is smoke there is fire; should we be worried?

As usual, nobody knows. But I have some thoughts:

I suspect that there have been some terrible loans made by private credit firms that have gathered a lot of assets in the last couple of years from unsuspecting investors. They got too much money too fast, and they lent it to lousy businesses because they had to make investments to earn fees! But there are some very savvy managers out there too, and they make loans to good companies, on good terms, because they want to earn money from their

investments, and they charge their investors a fee for participating with them. We try and stick with the latter.

I don’t know if you reviewed the latest growth and margin numbers from some of the USA top tech companies (we did); it is impressive. These companies are investing their capital because demand for their products is equally impressive. The growth is astounding. Are valuations too high? Possibly. Is it a bubble? Possibly, although I’m not quite sure what people mean by “bubble”? Perhaps you can have the bubble people call me and tell me what

the definition is, and what I should be doing, please give them my number.

Can the top (mag 7) companies in the S&P500 fall by 20-40%? Of course they can. Meta is almost down 20% from its highest point. Alphabet (Google) dropped approximately 30% from its highs at one point in the year.

Look, I am not trying to rain on anyone’s (rainy) parade by continually being positive. I am just trying to call balls and strikes (7th game of the world series between LA and Toronto tonight). Here is what I am noticing:

• We are experiencing a technological revolution unlike anything I have ever seen. Not only in my experience, but in all the history I have researched.

• It is quite possible that valuations are justified because of the global demand for what these companies are providing (more on this below).

• Negativity is still pervasive in news and conversations (geopolitics, our democracy at risk, divisiveness, war, etc.), and this collectively seeps into market pricing.

• There is a lot of “bubble” talk. I rarely have witnessed significant market declines with so much focus on “bubbles”. For me to expect a 40-50% decline in a market, I usually experience conversations with amateur investors on how dumb I am for not participating in a market (gold fits this definition now; so be careful if you are long this market). I am not being told that by the masses in the stock market right now. In fact, I’m continuously being told that I am not worrying enough.

• Geopolitics continues to move along the path I have been writing about. Arab countries want to normalize relations with Israel. To do this, the Iranian government and its proxies that seek its destruction must be sidelined. Then, the USA needs to put a security coalition in place and put Israel in its box (seems to be happening).

• Russian economy continues to weaken.

• China’s economy continues to weaken.

• Venezuelan government is likely to fall within the next 6-12 months.

• Argentina reforms continue.

• Latin America is becoming more aligned with the USA.

• With the regimes of Iran, Syria (fallen), Venezuela potentially falling, China and Russia influence further wanes in propping up dictatorial regimes that pillage their people and send them to the USA and Europe for escape.

• USA Tariff policy is working to de-risk from China. I suspect that Europe will have to follow with tariffs of their own, or cede entire state supported industries to the Chinese. Odds are they will follow the lead of the US policy.

• China’s willingness to weaponize their rare earth supply chain has democratic governments concerned. This increases the likelihood of shifting global supply chains (led by the USA) away from China because the Chinese government has a different agenda to democratic governments. (Listen to Treasury Secretary Scott Bessent if you want to better understand US administration actions and rationale).

• China must play nice in the global sandbox because it is essential for them to sell their exports to the west to maintain social stability, while their economy continues to experience deflation and population reduction. Currently, it is unlikely they are able to take significant risks economically or militarily.

“In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the constitution.”

-Thomas Jefferson 1799

More thoughts about the importance of the United States (like it or not):

For all of you worried about the loss of democracy in the United States, let’s assume for the moment that the NY Times is pushing an agenda to sell lots of subscriptions (it’s working well as a business strategy), but that 5 years from now we don’t lose our democracy, there is a new US Administration, the world is more peaceful, and the global economy is booming.

I think this is more likely, and for people lucky enough to live and work in the USA, you could be much better off financially. So, your mission, should you choose to accept it is to place your faith in the US Constitution, and participate in worldwide growth led by the United States. My advice is to seize the moment and not worry about the noise which is out of your control. Here is my thinking:

Global democracy does not survive without the United States. Peace and justice would not exist in the 20th or 21stcentury without the wealth and military power of the USA. That power continues to grow.

Consider that the United States is like a toll road. If you desire peace for you and your family, legal protections of your property, the right to think and say what you like, you need the United States to defend you. Even if you do not live in the USA, to a degree, you rely on this country. It has been this way since WW1.

I believe the current US administration believes that if you like those freedoms, there is a cost to benefiting from them. The movie, Team America, sums this up in its song: “Freedom isn’t free”. Funny, yes, but also true. And that cost is probably a good deal for those governments aligned with the USA. It’s certainly better than the alternative in China, Russia, Iran, and North Korea. None of these countries are experiencing an immigration problem.

Companies like Amazon, Google, Nvidia, Microsoft, Meta, Tesla, and Apple are growing so strongly because everyone globally wants to use them. People want to start businesses from their own countries using these platforms. Ai, cloud services, communication, cutting edge chips, security, safety, and reliability and trustworthiness provide a partnership to grow your business. It’s never been easier to launch a business, but you must pay the toll. The cost isn’t egregious, and what you can do is amazing, but you still must pay these companies. These are US based companies, and everyone in the USA benefits from this. The wealth growth, the

taxes, the employment, the military applications, and the innovation. And boy are they growing currently.

Other countries will not be allowed to penalize these companies because their population will demand their products, the USA won’t allow them to penalize, because the USA will also protect their interests. The USA has a financial incentive to protect their interests, and this will include backing it up with military deterrence.

I can hear the cries of why the USA should dictate the rules to the rest of the world? Well, I don’t know why, except that the USA will likely be the wealthiest, most dynamic, and have the strongest military. It will also represent the ideals that are espoused in the constitution of the United States. Freedom of thought, speech,

protection of property, etc.

Other countries’ populations will develop more innovation, more development, and better governance for its people over time, and these countries will become wealthy and powerful as well.

Perhaps the Chinese government will have the confidence someday to allow more freedom of thought and expression, open their borders, their markets, and see how they too can become powerful one day.

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Peace be with you and your family this Thanksgiving.

Thank you,

Joe

i Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors, LLC and August Wealth Advisors are separate entities.

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