Key Takeaways
- Equities: The dominant theme in global equity markets during November was a rotation away from AI and concerns about a bubble toward more defensive sectors such as Healthcare, Utilities, and Industrials. This was also the case in overseas equity markets, with the most significant negative impact in the tech-heavy Asian markets of Korea and Taiwan. Fears of overvalued Mega Tech pushed investors away from growth and momentum to more attractively priced defensive areas of the market. In our view, it was a healthy shift away from the super-concentrated, highly valued Mag Seven stocks to a broader approach to diversifying across more fairly valued assets with the potential for healthy growth.
- Bonds: In November, most sectors of the bond market delivered slightly positive returns, with leadership in the U.S Treasury markets. Yields declined slightly as markets now expected an 80% cut in the Fed funds rate in December, coming amid a weaker jobs market and lower consumer sentiment. Despite this view, year-over-year inflation remained at 3% due to tariffs on imports.
- Alternatives: Precious metals moved higher in November amid heightened concerns over geopolitical tensions between the US and China, the Ukrainian-Russian conflict, and continued volatility in the Middle East. While gold and silver were winners, energy, specifically oil prices, continued to decline due to building inventories. The USD moved lower amid expectations of a US interest rate cut.
EQUITIES
Market sentiment remained focused on the potential impact on AI and productivity growth, with a key difference emerging in November. Investors shifted attention away from the highly valued run-up in the Mag Seven stocks, which account for 30% of the overall market, to “anything AI,” encompassing companies across the spectrum that are embracing AI and integrating it into their respective business models.
The market is in a struggle between the dopamine hit of buying anything for growth and momentum, and whether investment fundamentals matter. This tug-of-war in
sentiment will likely continue because there is now a “gaming” mentality in the markets, especially among retail investors, where zero-day options account for 60%+ of daily option volume, prediction markets are popular, and online sports gaming has gained significant traction.
Proper diversification of real risk exposures across entire investment portfolios should be the focus. This means understanding how portfolios could react in scenarios of economic recession, expansion, or stagnation. Our base case is stagflation (lower growth and higher inflation).
FIXED INCOME
Bond markets are expressing a less optimistic outcome than equities. While there is near-term consensus that the Fed will lower interest rates due to cracks in the labor market, inflation remains a concern. Wanton government spending with additional stimulus through lower taxes only adds to the growth of the US budget deficit. It only makes it harder to raise capital in the Treasury market without raising rates to attract investors.
ALTERNATIVE ASSETS
Our focus on alternatives is on liquid investments that continue to demonstrate lower correlation with equity and bond market movements, while still generating positive returns across various market regimes. In addition to our base case scenario of stagflation, investment positions in precious metals, raw materials, and tangible assets tend to offset the risks that are more prominent in equity and credit markets.
MARKET PERFORMANCE AS OF NOVEMBER 28, 2025
DISCLOSURES
The statements herein are based upon OAR Financial LLC's (OAR Financial) opinions and the data available in the publication. They are subject to change at any time without notice. This communication does not constitute investment advice and is for informational purposes only. It is not intended to meet the objectives or suitability requirements of any specific individual or account. It does not guarantee that any model's investment objective will be met. Investors should assess their investment needs based on their financial circumstances and objectives. I think neither the information nor any opinions expressed here should be considered a solicitation or a recommendation by OAR Financial or its affiliates to buy or sell securities or investments or hire any specific manager.
OAR Financial prepared this Update utilizing information from a variety of reliable sources, including, but not limited to, custodians, mutual fund companies, investment managers, Morningstar, Bloomberg, other third-party service providers, and, in some cases, as directed by the client or their representative.
It is important to remember that risks are inherent in any investment and that there is no assurance that any investment, asset class, style, or index will provide positive performance over time.
Diversification and strategic asset allocation do not guarantee a profit or protect against a loss in a declining market.
Past performance is not a guarantee of future results. All investments are subject to risk, including the loss of principal. You can change the portfolio positions anytime; your portfolio may not reflect the information referenced.
"OAR Financial, LLC is a registered investment adviser with the SEC. SEC registration does not constitute an endorsement of the Firm by the Securities Exchange Commission, nor does it indicate that the Adviser has attained a particular level of skill or ability."
For more information about OAR Financial, please refer to OAR Financial's website, www.OAR Financial.com, or call us at 833-662-6346.
The information presented in this commentary is the opinion of the author and does not reflect the views of any other person or entity unless specified. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through Knode Wealth Management, LLC, an investment adviser registered with the State of Texas.
