"Conviction is contagious, which is exactly what makes it dangerous."

 I read this quote a few weeks ago from Scott Melker, who writes a newsletter, and thought how very true this is.

 My partner and I have been managing client’s assets for over 38 years and we can attest to this quote as factual. When everyone is sure of something on Wall St, it might work for a while, but eventually it stops working or at the very least, will test your “conviction.” The problem is, since it wasn’t your idea in the first place, you begin to question yourself and your alleged conviction in whatever it is.

 Look no further than what happened Friday, January 30th to the precious metals markets. Over $7 trillion in market cap losses in a single day to the four largest metals; Gold, Silver, Platinum and Palladium. If you have any exposure to these in your portfolio, we hope you read our previous blogs warning about Gold and these no longer being your traditional hedges against inflation. Silver, which was at $30 in early 2025, hit a high of $121 which, coincidentally, was on January 29th the day before it plummeted over 30%. Clearly, this is not a normal occurrence, but we would state, nor was the run to $121.

 Now the supposed culprit to this massive sell-off was President Trump’s nomination of Kevin Warsh as the potential next Fed Chair. Not a chance. For starters, he hasn’t even been confirmed, and if you listen to some of the talking heads in our Nation’s capital, there is not a chance he will be. So, if that is the case, why haven’t these metals recovered? They bounced a few days after January 30th but now the question becomes, what should investors do with their $120 Silver or even their $70 Silver? How much conviction do they have now?

 As my firm LCM Capital Management has stated for decades, we are not in the prediction business, nor should investors be, nor Wall Street’s market strategists or analysts because they are usually wrong.

 The problem is these “experts” go on Cable TV or X (formerly Twitter) or wherever anyone will listen to them with conviction about what is going to happen in the future. But they have to since their bonuses and the firm’s livelihood are dependent on the fact these people know what they are talking about. Look no further than 2025 and their market predictions. Very few of them thought the market after two great years would repeat its performance. And now, they’re all predicting a banner fourth year for the S&P 500. We don’t know if they will be right but be careful and remember a few things that we have learned over our 38 years. The world is too interconnected today with too many variables that can affect not only our economy, but our markets. Second, trading is synonymous with conviction and trading is a fool’s game.

 Don’t be a fool – stay diversified within YOUR risk tolerance, not someone else’s. You will be much better off in the long-term and investing is a long-term game.

 There is a better way