Resources/Weekly Insights

Volume 14, Edition 27 | August 25 - August 31, 2025

Beating Uncertainty and Sleeping at Night

Doug Walters, CFA

In a year of market swings and economic uncertainty, success doesn’t come from bold predictions—it comes from disciplined process. It is true in business and true in investing. It may not be flashy, but it works.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

In a year of market volatility and economic uncertainty, one principle has quietly but powerfully guided our investment decisions. While headlines have shifted from inflation fears to rate cuts to geopolitical tensions, our portfolios allocations have remained steady—not because we predicted the future, but perhaps because we didn’t try to.

A common misconception

Recently, through my work on the Clarkson University alumni leadership board, I’ve had the pleasure of meeting new people. When asked about my profession, I often received sympathetic comments like, “It must be a tough year to be an investor.” That reaction never fails to catch me off guard—but it makes sense. Many assume our job is to forecast markets. That misconception highlights a key truth about how we operate at Strategic—our success comes not from prediction, but from process.

At Strategic, our investment discipline is rooted in evidence, not emotion. We rebalance opportunistically, diversify across asset classes, and resist the temptation to chase performance. This year, that discipline has paid off. I feel very good about where our portfolios stand—not because we acted boldly, but because we acted consistently. It’s all about process.

A parallel in business

That same principle guides our business decisions. In our latest podcast, we discussed EOS—the Entrepreneurial Operating System—which provides a framework for accountability, clarity, and focus. EOS keeps us focused on long-term goals and away from reactionary decisions. The same is true of our investment process.

We’ve talked about this often, but the temptation to “do something” in uncertain times is real. Behavioral finance calls this action bias—the instinct to respond to discomfort with activity, even when that activity may be counterproductive. In investing, action bias often leads to market timing, performance chasing, or abandoning diversification. These behaviors feel good in the moment but rarely serve investors well.

Acting with intention

Our process is designed to counteract that bias. It’s not passive—it’s intentional. We review portfolios weekly, assess risk exposures, monitor the economic cycle, and make adjustments when warranted. But we don’t let fear or excitement dictate our moves. That discipline has helped us navigate this challenging year with confidence and clarity.

Process isn’t glamorous. It doesn’t make headlines. But it’s what separates reactive investing from resilient investing. Whether in business or investing, the lesson is the same: trust the process—especially when it’s hardest to do so.

2.9%

Core PCE Inflation

The Fed’s preferred measure of inflation came in line with expectations at 2.9% up from 2.8%.

Headline of the Week

Inflation Pipeline Heats Up as Labor Market Loses Steam

Tariffs seemed to fade from the spotlight earlier this month after a flurry of trade deals and carve-outs. But they’ve come back into the conversation. Expanded steel and aluminum tariffs now cover hundreds of products, and reports suggest new levies could soon hit semiconductors, heavy trucks, and even pharmaceuticals. Companies are starting to sound the alarm, and these developments are starting to show up in various economic reports. The narrative is shifting from “absorbing” to “passing through,” which means tariff-driven inflation may soon move from the pipeline to the checkout aisle.

Meanwhile, the labor market continues to cool. For the Federal Reserve, this is the definition of a balancing act: inflation risks are creeping higher just as employment risks deepen. Powell’s Jackson Hole message about a “shifting balance of risks” feels even more relevant, and there seems to be an increased appetite for a September rate cut within the Fed—all while navigating a challenging political backdrop (a topic for another day). Whether the Fed leans toward cushioning jobs or containing costs will define the next chapter—but for now, the pressure is building on both fronts.

The Week Ahead

Markets return from the Labor Day holiday with a shortened trading week and a full slate of catalysts that could shape sentiment heading into September. In economic news, a key jobs number will be released on Friday as investors gauge the implications of a weakening labor market on a possible Federal Reserve rate cut at the upcoming meeting later this month. Earnings season is coming to a close, but the best is often saved for last. Last week brought Nvidia’s results, and this week it’s Broadcom—another company driving the AI hype train.

US August ISM Data

Both ISM reports—manufacturing and services—are expected to show slight improvements from the previous month’s readings. However, manufacturing is still likely to remain in contraction territory (below 50). While not expected to be major market movers, investors will pay close attention to subcomponents like employment and prices paid for clues about labor and inflation trends ahead of more consequential data later in the month.

Manufacturing – Expected: 48.6, Prior: 48.0
Services – Expected: 50.5, Prior: 50.1

U.S. Jobs Report – Friday

Likely the biggest market event of the week, August’s non-farm payrolls data could play a key role in shaping the Fed’s rate cut decision. Markets are currently pricing in a high probability of a cut in September, but any large revisions to previous months’ data could alter that outlook.

Non-farm payrolls – Expected: 78k, Prior: 73k
Unemployment – Expected: 4.3%, Prior: 4.2%.

Broadcom Earnings – Thursday After Market Close

The seventh-largest company in the U.S. by market cap—recently surpassing Tesla—will report Q3 earnings this week.

Q3 expectations:
- EPS: $1.66
- Revenue: $15.82 billion (up ~20% YoY)
AI momentum: Continued strength in AI infrastructure demand is driving growth across both semiconductor and software segments.

About Strategic

Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on total client assets of over $2.5 billion.

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