Sep 20, 2025
4
min read
💬 Weekly Observation
“The proper financial mindset is to be scared enough to save for the short run and brave enough to invest for the long run.” — Morgan Housel
Think of it as a balance dial, not an on/off switch. “Scared enough” is simply acknowledging near-term obligations and surprises; “brave enough” is accepting that long-term goals require time in the market and occasional discomfort. A useful gut check: If near-term bills keep you up at night, your dial may be too far toward risk.
If headlines regularly push you to the sidelines, it may be tilted too far toward safety. The aim isn’t perfection, it’s keeping both instincts in view so today’s worries don’t crowd out tomorrow’s plans.
☕️ So grab your coffee and let's dive into today's fresh edition of Diversification Weekly.
🗞️ Week's stories that matter (and why)
1. 🏦 Fed cuts 25 bps; indexes hit fresh records
The Fed lowered rates by 0.25% and acknowledged a softening labor market. Stocks closed at record highs as semiconductors rallied and Intel surged on separate chip news.
Why it matters: Cheaper money supports valuations and refinancing, but if the cut reflects cooler labor data, earnings durability, not just multiples, will drive returns.
Assets in Focus: Equities
2. 🪙 Gold hovers near records on easing path
Spot gold traded around $3,660/oz and is on track for a fifth straight weekly gain after the Fed’s cut and continued central-bank buying; Reuters notes gold is up ~37% YTD.
Why it matters: When real yields fall, non-yielding assets look better; gold remains a hedge against policy missteps and geopolitical noise.
Assets in Focus: Commodities
3. 💸 Record equity outflows even as stocks hit highs
Weekly flows into US equity, bond and money market funds in $ million
Investors withdrew $43.19B from US equity funds in the week to Sept. 17, the largest since Dec. 2024, while bond funds saw inflows. Reuters.
Why it matters: Classic late-cycle behavior: prices rise while positioning turns cautious. That can cap upside, and set up buy-the-dip flows if data stabilizes.
Assets in Focus: Equities
4. 🇨🇳 China’s August data softens, pressure builds for stimulus
Factory output rose 5.2% year over year (a 1-year low pace), while retail sales grew 3.4% (a 9-month low), underscoring fragile demand and export headwinds.
Why it matters: China is a major demand engine; slower growth can weigh on commodities, EM risk, and global earnings with high China exposure.
Assets in Focus: Commodities
5. 🤖 Nvidia buys $5B stake in Intel, new alliance rewires chip pecking
Nvidia will invest $5B (~4%) in Intel and partner on PC and data-center chips; Intel Foundry will supply CPUs and advanced packaging. Intel shares jumped sharply on the news.
Why it matters: Linking the top AI chip designer with the U.S.’s on-shore manufacturing push could reshape supply chains, standards, and margins across semis, cloud, and PCs for years.
Assets in Focus: Equities
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🧭 Three macro themes to remember
- Policy & liquidity: Central banks still set the tone, rate cuts support risk assets, but if the easing is about weaker growth, leadership narrows and quality cash flows matter most.
- Earnings vs. narratives: Records can coexist with outflows; when positioning turns cautious, earnings resilience and balance-sheet strength drive durable returns.
- Global demand mix: China’s slower pulse and shifting tech supply chains mean portfolios need true geographic diversification so commodity, EM, and semiconductor shocks don’t dominate outcomes.
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🤯 Alternative investment highlight: 🖼️ Record watch, Frida at Sotheby’s
AP Photo/Kirsty Wigglesworth
Frida Kahlo’s 1940 self-portrait El sueño (La cama) heads to Sotheby’s New York in November with a $40–60 million estimate. The work, Kahlo in a canopy bed beneath a skeleton clutching flowers, has been rarely seen publicly since the late 1990s and is currently on a short global tour before the Nov. 8 sale. If it reaches the top of the range, it would surpass the $44.4 million auction record for a work by a female artist, set by Georgia O’Keeffe’s Jimson Weed/White Flower No. 1 (2014). The lot will anchor a broader surrealist offering (Dalí, Magritte), reflecting renewed demand for 20th-century women artists and Latin American surrealists.
Rarity is a major driver: Mexico restricts exports of key cultural works, so blue-chip Kahlo paintings seldom hit public auction. Dealers note intense private-sale interest in recent years, with some transactions reportedly clearing $50M+, which helps explain the aggressive guidance. Still, this is art, not cash flows, prices blend cultural relevance, scarcity, and collector competition more than fundamentals. Whether it clears a record or not, the sale spotlights how “alternative” markets can trade on stories and scarcity cycles that move independently of stocks and bonds.
🧠 From the Education Center: Is private credit hiding more risk than it shows?
According to the IMF’s Global Monitoring Report, the private credit market reached $2.1 trillion in assets by 2023, more than doubling in size since 2015. With attractive income potential and what looks like minimal correlation to traditional markets, it’s no surprise that private credit has gained attention among allocators seeking steady returns during uncertain times. 🔗Learn more
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