Q3 2025
Key Takeaways: Riding the Cycle
Fear & Greed: The Invisible Market Movers
Gordon Gekko declared in Wall Street:
“Greed, for lack of a better word, is good.”
What he didn’t include: fear is just as powerful.
Markets may rely on math, but they are moved by emotion. And history shows fear and greed repeatedly driving dramatic mispricing:
Late 1990s: Greed said tech could only go up… until fear had other plans.
2008: Greed overleveraged the system… and fear tore it apart.
2020: Fear shut down the world… until greed sent meme stocks and crypto to the moon.
Now, here we are in 2025 — and the pendulum has swung hard back toward greed.
Headlines are euphoric. IPOs are returning. AI is being treated as the solution to everything, from productivity to making your dog sit.
And valuations?
They’ve expanded faster than a new Peloton purchase during lockdown.
But cycles don’t disappear — they disguise themselves.
They whisper instead of shout.
They convince us this time will be different…right before reminding us it never is.
That’s why recognizing the fear-and-greed cycle isn’t about being pessimistic…it’s about staying anchored when emotions try to carry portfolios away.
The S&P 500: A Concentration Game
The S&P 500 is known as a broad measure of U.S. equities. But today, a more accurate label might be:
The S&P 7 + everyone else.
Recent JPMorgan data is staggering:
63% of 2023 returns from the “Magnificent 7”
55% of 2024 returns
45% of 2025 returns year-to-date
Three years.
Seven companies.
More than half the gains.
That’s not diversification. That’s dependency disguised as a broad index.
And history warns us what concentration looks like:
1920s: Narrow speculation before the crash
1970s: The “Nifty Fifty” — down a not so “nifty” ~50% soon after
1999: Dot-com leaders — household names then, cautionary tales now
Different decades. Different tickers. Same emotional cycle.
Today’s tech giants are exceptional businesses, but even exceptional companies can be priced beyond perfection.
Greed works…until it doesn’t. And that’s often when fear shows up to collect.
The AI Cycle: Déjà Vu All Over Again
The capital pouring into AI is staggering. And almost no one is questioning it.
Chipmakers fund cloud providers.
Cloud providers fund chipmakers.
Everyone funds data centers.
It’s a circular reference error, and instead of fixing it, markets are applauding the formula.
For example:
Oracle recently took on $38 billion in debt to build data centers for AI infrastructure linked to Nvidia partnerships.
These are companies known for strong free cash flow and disciplined capital allocation. Suddenly?
They’re tapping debt markets like it’s free money. And, investors applaud like returns are certain.
As I get older, my body aches more (I even got tennis elbow…and, I don’t even play tennis!). But, the silver lining, you see things you’ve seen before:
In the early 2010s, the energy sector did the same thing:
Massive CapEx ✔
Debt-fueled expansion ✔
“Growth at all costs” ✔
Little regard for future return ✔
It didn’t crash overnight… but a decade later? Investors are still waiting for the promised payoff.
AI may truly reshape the world, but economic transformation rarely follows a straight line.
One of the first investment books I ever read at 15 years old said it best:
“Bulls make money. Bears make money. Pigs get slaughtered.”
AI isn’t the problem. Greed disguised as certainty is.
Don’t be a pig.
Emerging Markets: From Pariah to Potential
Now let’s talk opportunity born from fear, not greed.
For the first time since 2009, we’ve added emerging markets exposure across portfolios.
A brief history:
2009 — Greed loved the BRICS (Brazil, Russia, India, and China). “Move abroad” was the consensus trade. The U.S. was considered stagnant.
But look at where returns went. Since Jan 1, 2010 - Oct 28, 2025:
S&P 500: +726%
MSCI EM: +86%
That’s not a typo. It’s an 8.5x difference (Source: YCharts).
Today? Investor sentiment has fully flipped. But the data tells a different story:
S&P 500 P/E: ~28x
MSCI EM P/E: ~14x
Global trade deals: accelerating
Stimulus: finally flowing outside the U.S.
In other words, the setup is eerily familiar…only in reverse. Back in 2009, investors abandoned the U.S. for “faster-growing” emerging markets, and the next 15 years belonged to America.
Today, greed is crowding into U.S. megacaps, while EM has been left for dead.
History has a habit of rewarding what’s ignored:
The best opportunities often start where the crowd stops looking.
Mindset Matters: Control the Reaction, Not the Emotion
The truth is: neither fear nor greed is “bad.” They’re both necessary.
Fear keeps us cautious.
Greed keeps us ambitious.
The problem is when we forget that cycles always swing back.
As I often tell clients:
“You can’t control the market’s emotions. But you can control how you respond to them.”
Today’s environment is tempting. The headlines spark confidence. The gains feel easy.
That’s exactly when discipline matters most.
Looking Ahead: The Cycle Never Lies
Heading into Q4, markets are strong and investor confidence is high. That’s encouraging, but also cautionary.
When too many investors believe risk is gone…that’s when risk is highest.
Our plan?
✔ Remain globally diversified
✔ Stay valuation-aware, especially in megacaps
✔ Continue monitoring AI fundamentals vs. hope
✔ Add exposure where long-term reward > near-term popularity
Because we don’t build portfolios around how investors feel today, we build them for how the world will look tomorrow.
Wealth isn’t built by reacting. It’s built by preparing. By Choice, Not Chance.
Truly Yours,
Jason Blumstein, CFA
CEO & Founder
Julius Wealth Advisors, LLC
Let’s Position Wisely — Before the Cycle Turns
This is the environment where proactive decisions compound returns — and reactive decisions compound regret.
Let’s review your plan and make sure your capital is allocated to thrive through the cycle — not just through the headline of the day.
Smart strategy wins the long game. Let’s build wisely and build together.
Let’s Build Wealth By Choice, Not Chance.
Disclosures:This piece contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov.