June 03, 2025
4
min read
💬 Daily Observation
“Diversification is protection against ignorance.” – Warren Buffett
When my good old friend, let’s call her Lisa*, received her year-end bonus, she poured it all into one idea, convinced it was a “sure thing.” For weeks, she tracked that single position like it was the only dish on her plate, celebrating every uptick. Then it fell 30% overnight, and her stomach sank. She realized she’d essentially been eating mashed potatoes for every meal – tasty for a night, but bland and risky long term.
Now, Lisa plans her portfolio like a well-balanced menu: a mix of varied ingredients that work together. Each component serves a purpose, and if one course fails, the rest still nourishes. Of course, even a varied banquet can face a surprise food recall: diversification helps manage risk, but doesn’t eliminate every hiccup.
It’s a reminder that a well-rounded menu, whether at dinner or in your portfolio, builds resilience when palates (or markets) shift.
🗞️ Today's stories that matter (and why)
1. 🌐 OECD warns of global growth slowdown amid trade tensions
The OECD on June 3 warned that global growth in 2025 will likely slow to 2.9%, the weakest since the Covid-19 pandemic, citing escalating trade tensions and tariff hikes as primary factors. The US economy is projected to expand only 1.6% this year, down from earlier forecasts, as rising inflation (approaching 4%) is expected to delay Federal Reserve relief.
The OECD urged international cooperation to reduce trade barriers, boost investment, and offset inflationary pressures.
Why it matters: A weakened global growth outlook could pressure equity markets, push bond yields lower, and support commodities as an inflation hedge; investors may need to rebalance toward more defensive sectors or nations less exposed to trade frictions.
Assets in focus: Equities
2. 🏦 Fed’s Bostic emphasizes patience amid trade uncertainty
Atlanta Fed President Raphael Bostic said on June 3 that “current economic uncertainties”—notably erratic tariff announcements—call for a cautious approach to monetary policy.
He noted that inflation remains above the Fed’s 2 percent target, but healthy labor markets and growth indicators give policymakers room to monitor developments before cutting rates.
Why it matters: A delayed rate cut keeps bond yields elevated and can pressure utilities and real estate, so investors should factor in sustained interest-rate risks for portfolio positioning.
Assets in focus: Fixed Income
3. 🤝 US-India nearing trade deal as talks progress
Commerce Secretary Howard Lutnick said negotiations with India aim to finalize a trade agreement before July 9, seeking reduced US tariffs on agricultural goods and broader market access for American firms.
India’s negotiator Rajesh Agrawal highlighted positive progress ahead of bilateral meetings in New Delhi on June 5–6, aided by President Trump and Prime Minister Modi’s strong relationship.
Why it matters: A deal could boost US export-oriented equities (especially in agriculture and defense) and reduce commodity-market volatility, offering diversified portfolios new opportunities in emerging markets.
Assets in focus: Commodities
4. 🏘️ Millennials & Gen Z hesitate as high mortgage rates persist
A Realtor.com survey of 2,203 adults found that one-third have delayed buying a home due to high mortgage rates, which averaged 6.86% as of May 22.Within that group, 23% of Millennials (ages 29–44) still plan to buy this year—up from 15% last September—while half of both Millennials and Gen Zers have already postponed their searches.
Gen Z buyers are the most cautious: over half report delaying purchases and preferring renting over locking in today’s rates.That pullback suggests younger cohorts may shift capital toward rental REITs or other income-producing assets instead of homeownership.
Why it matters: With deferred homebuying among Millennials and Gen Z, rental markets and real estate–adjacent investment vehicles (e.g., REITs) may see heightened demand as younger investors allocate savings elsewhere.
Assets in focus: Real Estate
5. 🏭 US manufacturing contracts for third straight month
The Institute for Supply Management’s May Manufacturing PMI fell to 48.5 on June 2, marking a third straight month of contraction as new and export orders plunged amid trade-policy uncertainties.
Supplier delivery times lengthened despite a modest production rebound, reflecting firms’ concerns over tariff-driven supply disruptions.
Why it matters: Slower factory activity can weigh on industrial equities and commodity prices, signaling potential headwinds for earnings in industrial-heavy indices.
Assets in focus: Equities
🌀 Diversification Score – Have you evaluated your portfolio's diversification?
Are you spread across the right risk factors—or leaning on just a few big bets?
📊 Market Movements Snapshot
Asset Classes:
- 🟢 Emerging Markets Equities: +7.05YTD. A softer US dollar has boosted local-currency returns and spurred renewed capital inflows into countries like India (e.g., $5.5 billion in May block trades), driving the MSCI Emerging Markets Index higher through early June.
- 🟢 International Bonds: +0.94%. International bond indices have risen modestly as global government-bond yields stabilized after late-2024’s tightening cycle and safe-haven demand amid renewed trade tensions underpinned prices.
For the full list, click here
Sectors:
- 🟢 Utilities +9.44% YTD. Defensive utilities stocks have outperformed, on stable dividends and expectations of lower borrowing costs as inflation cools (eurozone CPI 1.9% in May), while accelerated renewable-energy investments bolster growth narratives.
- 🔴 Health Care: −4.58% YTD. Health care equities are down YTD amid regulatory uncertainty around drug-pricing reforms and slower M&A activity as higher borrowing costs weigh on biopharma dealmaking.
For the full list, click here
🤯 Alternative investment highlight: Cheetozard 🐉 The Pokémon Cheeto that sparked an $87K bidding war
In March 2025, a Flamin’ Hot Cheeto shaped like Pokémon’s Charizard—nicknamed “Cheetozard”—sold for $87,840 ($88K including buyer’s premium) at a Goldin Auctions event after 60 bids. The three-inch snack was affixed to a custom Pokémon card inside a clear display box and originally fetched a $250 opening bid on eBay before viral internet hype drove bids sky-high.
This oddball collectible—found in a bag of Flamin’ Hot Cheetos between 2018 and 2022 by 1st & Goal Collectibles—garnered massive social media attention after being featured in an April 2024 Instagram post. Observers say the sale underscores how nostalgia and meme culture can turn a humble snack into a six-figure “alternative asset” without any financial jargon or return promises.
At roughly $3.33 retail, a bag of Flamin’ Hot Cheetos yields about 189 Cheetos, giving collectors 189 chances to find another “Cheetozard,” a return on investment even stranger than fine art trading.
Whether you’re a Pokémon superfan or simply amazed by internet-fueled auctions, the Cheetozard tale showes that sometimes, a crispy snack can outshine traditional collectibles.
🧠 From the Education Center: Diversification, a Practical Guide
Diversification is powerful—but only when it’s done right. Learn how to spread risk smartly across assets, geographies, and time.
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*For compliance reasons, these stories are complete fiction with made up characters and portfolios. Possibly influenced by real interactions, and definitely not financial advice."