The Long Run: Charting a Resilient Course

2025 Q2 Newsletter

By Jason Lesh, Managing Principal

My son Christopher recently returned from a week at the Steens Mountain Running Camp, a place known for forging both exceptional athletes and resilient young adults. Day two is infamously known as the "Big Day:" a grueling 28-mile trail run that snakes its way up and down the rugged, breathtaking Steens Mountain. It's a daunting physical and mental challenge that demands everything a person has.

As I listened to him recount the endless switchbacks and the sheer perseverance required, it struck me how much this mirrors our current investment landscape. Whether you're navigating a winding mountain trail or a volatile market, success isn’t about a single burst of speed. It requires a clear focus, immense patience, and the wisdom to surround yourself with smart, reasonable, and determined individuals who can help you push through the hard times. This year, more than ever, we've relied on that very same approach. It's a philosophy that has guided us through the market's noise and complexity, and it's what has enabled us to protect and grow your wealth.

We know the current investment landscape can feel a bit like a maze—confused, noisy, and challenging to navigate. That's why I'm particularly pleased to share that our investments are doing exceptionally well. It's a testament to the careful management of our client’s irreplaceable savings, which remains our foremost priority. As Nick talks about in his quarterly letter, our diversified approach, especially through our insurance operations and gold holdings, has proven highly effective in navigating ongoing inflation and market complexities. We are committed to building a resilient portfolio that not only grows but also protects our client’s wealth through all market conditions.

In the midst of all this was the recent passage of the One Big Beautiful Bill Act (OBBBA), which was signed into law in early July. It's a significant piece of legislation that makes many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduces new changes for individuals and estate planning.

For example, key individual income tax provisions now include permanent tax brackets, temporary deductions for tip and overtime income, and an expanded standard deduction. In a big win for many, the state and local tax (SALT) cap has been increased to $40,000 for 2025 and $40,400 for 2026, with phaseouts starting at a modified adjusted gross income (MAGI) of $500,000. On the estate and gift tax side, the exemption is now permanently increased to $15 million per person, starting in 2026.

All of these changes reaffirm the importance of working with a qualified team of professionals. Should you have any questions on how these changes affect you, or if you need a referral for a qualified CPA, please don't hesitate to reach out to us.

While you may not be running up remote mountains, I do hope this note finds you enjoying your summer.

Warmest regards,



2025 Q1 Commentary

By Nick Fisher, Portfolio Manager

As we analyze the economic indicators and dynamics of the past several months, it is evident that we continue to operate in a complex investment environment. In a market that is confused, noisy, and difficult to navigate, our investments are doing exceptionally well. The prudent management of your irreplaceable savings remains our foremost priority, particularly as the global financial landscape presents a unique convergence of challenges.

Current Market Conditions

Market performance this quarter has reflected persistent underlying tensions. We have observed continued inflationary pressures, albeit with varying intensity across sectors. We continue to deal with the inescapable effects of unprecedented central bank balance sheet expansion. Elevated global debt levels establish a backdrop where conventional economic interventions encounter constraints (see our Pilots log on fiscal dominance). Our diversified insurance operations and gold mining assets have proven valuable.

While specific growth narratives continue to garner significant attention, a closer examination reveals inherent volatility and a heightened sensitivity to shifts in market sentiment and policy. This period necessitates a precise comprehension of our portfolio's diversification, each investments objectives, and the risks associated with the prevailing economic conditions.

Central banks, having deployed substantial policy tools in recent years, are now navigating a delicate equilibrium. Their capacity to provide an unconstrained backstop is increasingly subject to scrutiny, particularly when confronted with both the potential for asset price corrections and the imperative to manage inflation. This environment underscores the importance of adaptability and the necessity of constructing portfolios that are inherently resilient—designed not merely to capture appreciation, but to withstand the obvious, significant market downturns and the not so obvious, persistent inflation.

This inflation and its impact on the bond market has been substantial. For the first time in 50 years, the bond market has provided no return with very little if any diversification benefit.

With bonds no longer providing an acceptable inflation adjusted return, our strategy of diversification via other asset classes, like commodities has been confirmed. One commodity I would like to discuss in more detail is gold. 

Gold: An Enduring Component for Purchasing Power Preservation

In this climate, where the very definition of “diversification” is evolving, we believe it is opportune to re-emphasize the strategic role of gold within a portfolio. For some, gold may be perceived through the lens of short-term speculation or as a vestige of a prior financial era. For us, it represents a foundational, long-term allocation – an enduring component engineered to preserve purchasing power and enhance portfolio robustness.

We believe that one ounce of gold will buy us more of the stock market in the future. And it provides interesting diversification benefits.

Consider gold not as an instrument for aggressive growth, but as a distinctive asset that historically exhibits a low correlation to traditional equities and fixed income, especially during periods of economic uncertainty, geopolitical instability, or sustained inflationary pressures. 

While central banks contend with the implications of their expanded balance sheets and governments manage escalating debt, gold maintains its unique position as a tangible store of value, unencumbered by counterparty risk or the fluctuations of monetary policy.

Just as prudent risk management dictates the provision for contingencies, our investment philosophy mandates preparation for all eventualities. Gold, in this context, functions as a form of portfolio protection — a non-yielding asset that can appreciate when other asset classes experience declines, thereby providing a critical insurance of sorts against risks and the erosion of wealth through inflation. It represents a judicious allocation for long-term strategic deployment, enabling us to maintain our disciplined approach and avoid impulsive reactions to market movements.

Constructing a Resilient Portfolio

Our commitment at PWM is to implement a strategy that prioritizes the longevity and endurance of your hard earned capital. Integrating a strategic allocation to gold is a testament to this philosophy. It is about ensuring that your portfolio is not only positioned for appreciation when conditions are favorable but is also robust enough to endure periods of market adversity, safeguarding your accumulated wealth for your future needs.

We appreciate you entrusting us with stewarding your hard earned, irreplaceable savings. If there is anyone you know or care about who you think might benefit from this information, please feel free to share it with them. As always we welcome your feedback, reactions and critique's. We hope you will find this information valuable and validating.