February Market Insight
In this month’s insights, we dive into two significant shifts occurring in the global landscape: the sudden volatility in precious metals and the changing expectations for AI profitability. As we often discuss, ‘blind investing’ into headlines rarely yields long-term results; instead, we look for the mechanics behind the movement.
The Warsh Effect: A Reality Check for the Gold Rush
For much of late 2025, we watched gold and silver climb to historic highs, with gold touching nearly $5,600/oz. This was driven largely by uncertainty and a global search for ‘safe havens.’ However, February has brought a sharp reset. The nomination of Kevin Warsh as the next Fed Chair has introduced a new variable: a leader known for questioning the size of the Fed’s balance sheet while promoting productivity-led growth.
Why it Matters
We view this ‘Gold Rout’ not as a loss of value, but as a mechanical reset. For the disciplined investor, this is a reminder that even ‘safe’ assets can become overextended. We are monitoring how a Warsh-led Fed will impact the dollar’s strength and, more importantly, how it will stabilize fixed-income yields for your ‘Work Optional’ planning.
The AI “Reality Check”: From Potential to Productivity
The early February earnings season has sent a clear message: the ‘free pass’ for AI spending is over. While giants like Microsoft are beating earnings targets, their stock prices have been pressured by massive capital expenditures—reaching upwards of $37 billion in a single quarter. The market is no longer pricing in just ‘AI potential’; it is demanding ‘AI productivity.’
Why it Matters
We call this an ‘air pocket.’ In our portfolio strategy, we focus on Discrete Growth. We are distinguishing between the ‘Enablers’ (those spending the billions) and the ‘Beneficiaries’ (those using AI to actually increase free cash flow). Our goal remains to avoid the top-heavy bubbles and instead find the bridge where technology meets tangible profit.
DISCLOSURES
Volatility is the price of admission for long-term growth. Our focus remains on active management and ensuring your allocation reflects the reality of the 2026 economy, not the sentiment of the 2025 headlines.
LA Wealth Advisors is a DBA of Axxcess Wealth Management, LLC a Registered Investment Advisor with the SEC. Advisory services are only offered to clients or prospective clients where Axxcess and its representatives are properly licensed or exempt from licensure.
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