Hey, Tom here.

Yesterday, I turned 35, and as I reflected, one thing stood out: you all. Your engagement and support every week fuels me. We’re building one of the best newsletters for modern investors. I am grateful for you.

We’re gearing up for our next Wealth Workshop, and I want to tackle your biggest questions about investing, building wealth, and financial planning. What’s on your mind? 

Submit Your Question Here. 

This week, we’re talking about why—despite the chaos in the world—the market is just doing its thing, and where we go from here.

Let’s jump in.

Why Is The Market Calm?

Last week, I checked the market volatility index—the VIX—and it was sitting at 15.

I laughed.

With everything going on, you'd think market volatility would be off the charts.

But it's not; markets are remarkedly calm, as shown by the VIX.

• Why is that the case?

• What is the VIX?

• Why should you care?

Let’s start with what the VIX is:

Now, in plain English: The VIX tells you how freaked out investors are.

• A high VIX means I get texts before the market opens from friends asking, "What's going on right now?"

• A low VIX means my phone and inbox are silent.

The good times are easy. The bad times are awful. (Remember the COVID crash that started almost exactly five years ago?)

With everything happening in Washington (and beyond), you'd expect the VIX to be through the roof.

But it's not.

That's surprising, considering last week's American Association of Individual Investors survey showed 47% of investors are bearish—a level we haven't seen since late 2023.

Ask your neighbors what they think the markets are doing, and they'd probably say, "With everything going on in Washington, things must be crazy."

Well, they're not.

Why?

You've heard me say this before: Markets are forward-looking machines.

They price in future events before they happen.

Take tariffs. I wrote about them three weeks ago. Some people might have been surprised by their extent, but the market?

It wasn't.

President Trump, leading up to the election, made it clear they were coming.

Markets don't react to headlines they expect—they respond to unexpected headlines.

Let's break this down by looking at three volatility spikes from the past year.

First, here's a look at the VIX over the past 12 months for you to reference:

1. August 2024 – The Big One

• The VIX hit 38, a level not seen in almost two years.

• Stocks sold off sharply.

• The culprits? A nasty mix of:

  • Weak US employment reports.

  • A surprise interest rate hike in Japan.

  • The Sahm Rule (a key recession indicator) flashing red.

  • Oh, and news of Warren Buffett dumping tens of billions in Apple stock.

2. November 2024 – Election Volatility

• This was upside volatility.

• After President Trump won, cash-heavy investors rushed in, eager to deploy capital now that the uncertainty of the next President was gone.

3. December 2024 – Profit Taking

• No major news event—just investors locking in gains after a 28% market rally heading into December.

See the pattern?

Well, there is none. The VIX spiked last year for different reasons, leading to different market outcomes for investors.

Which brings us back to the market calm today.

A Key Component to the Clam

President Trump is back. CEOs know his style. Investors know his playbook.

He's a known wildcard.

If this sounds weird, well—welcome to investing.

• Where good news is bad news, and bad news is good news.

• Where you buy the dip—except in 2022.

• Where the market gained 24% last year as investors sat on $6 trillion in cash.

While mainstream media frames today's economic debates as political battles, Wall Street and its inhabitants are looking after the money entrusted to them and are pleased that the elephant in the room is being examined: the $36 trillion deficit and its long-term effects on the US economy.

For years, the pros have warned that the rising US deficit needs to be addressed, now.

Like many people, I used to be in the "deficits don't matter" camp. Then COVID hit, the federal spending cannon was unleashed, and even my five-year-old daughter could tell me where this is going in the next ten years.

The math isn't complicated.

The trajectory of our deficit is concerning, particularly with higher for longer interest rates, and everyone knows it's a house of cards that could collapse in ways that resemble a horse race—anyone's guess.

Remember, people go bankrupt slowly, then suddenly.

I'm not saying the US is going bankrupt, but this trajectory is hard to pencil out, and markets have largely voted with their wallets and stayed the course while DOGE is doing its thing.

Why?

The market has seen hundreds of companies eviscerated by fiscal mismanagement and poor decision-making over the decades, and the market views this tackling of the debt mainly as a good thing. Remember:

• The Politician's are playing politics.

• The Markets are looking after the money.

But Here's the Catch…

Markets may be calm today, but that can flip in an instant.

Just look at the VIX in August last year.

The biggest risk isn't what's being reported now; it's the story that is developing that no one expected, which will change investor’s perceptions of the future.

But that's investing.

 I am sure of this: when that unexpected news comes, markets will move as fast as Mr. Trump, as fast as Nvidia sells out of its new GPUs, and as fast as NBA stars hit the bench to "load manage."

Risk isn't something you avoid.

It's something you manage.

Two things for you this week:

Submit Your Questions – We’re shaking up our next Wealth Workshop by answering your most pressing questions—live. No fluff, no nonsense—just real, actionable insights.

Work with Fjell Capital – If you're nearing retirement and unsure of your next steps, let’s change that. Book a complimentary discovery call and let’s strategize about your portfolio, analyze your net worth, optimize your cash flow, and build a financial plan that works for you.

That’s it for now—stay sharp, stay ready.

See you next week,

Tom