August 2025

The Slice

A Monthly Market Update & Investment News Roundup

Cutting through the noise...so you don't have to.

Good morning,

Ask any millennial about their biggest worries and I'd bet housing affordability is in the top three.

We love our home, but even as homeowners, it’s a concern. We bought in 2017 when our oldest was in diapers. Fast forward to 2025: we have three growing kids who all have more stuff, and things are feeling a bit tight. So, we recently asked for quotes to add a bedroom and convert our back porch into more living space. The estimates that came back ranged from the equivalent of an Italian sportscar to a pretty nice used plane...and, we would need to move out for 5 months. Even then, there’s no guaranteeing that our house wouldn’t look like Frankenstein after the addition. The alternative? Move and get a loan at 7%. To quote our daughter, “I don’t care for any of those options!”

We’ll be fine, but for the average American, it's becoming increasingly difficult to buy a home. Warren Pies, founder of 3Fourteen Research, put out a note last week suggesting that as few as 40% of households can afford to purchase a home at today’s prices/interest rates. That figure is down from 60%, pre-pandemic. Not only is this a problem for the would-be homeowners who'd miss out on a core tenet of the American Dream, it’s where that money might be going instead. Pies points out that “increasingly, those on the fringe are turning to speculation to bridge the chasm,” as higher home prices (and mortgage rates) start to feel out of reach for many. 

Source: 3Fourteen Research.

We’re starting to see some evidence of this increased speculative activity over the last few months:

• Cathy Wood’s Ark Innovation ETF (Top holdings: Tesla, Coinbase, Robinhood, Palantir, etc.) is up 60% since April 1^st.
• Bitcoin is up 60% since the November 2024 election. 
• Emerging market stocks from Peru to Singapore to South Africa are trading at records.
• And meme stocks are back! Opendoor, an online real estate platform, is up an astounding 350% in July alone.

One possible explanation: If I can’t afford to buy a home, or I don't want a mortgage at these rates, maybe I YOLO a portion of my down payment on  ____________(fill in the blank).

That probably won’t end well. 

Here's what you need to know.

Markets

2025 Year-to-Date Asset Class Returns

Data thru 7/30/2025. Source: © Exhibit A, FactSet Research Systems Inc., Standard & Poor's  This slide is for informational and illustrative purposes only. The data provided is believed to be accurate, but there is no guarantee of its accuracy, completeness, or timeliness. This is not a recommendation or offer of any financial product. Past performance is not indicative of future results, and investors should consider their own objectives and risk tolerance. Indices, if presented, do not include fees, are unmanaged, and not available for direct investment. Definitions & Methodology: The returns shown represent year-to-date return performance of sector ETFs provided by iShares (EEM, EFA, TIP, AGG, DJP), SPDR (MDY, SPSM, SPY, BIL), and Vanguard (VNQ). These ETFs track the following sectors: Commodities, International, Emerging Markets, U.S. Large Cap, REITs, U.S. Mid Cap, TIPS, U.S. Small Cap, Cash, and Bonds. Data is sorted by return from highest to lowest.

News & Notes

• EU Trade Deal: Europe just conceded a 15% tariff on good shipped to the U.S. How did we get here? (NYT)
   
  • What the deal means for your wallet (USA Today)
  • Take prescription drugs? Drugmaker talks impact on prices (WSJ)
  • Tariff Tracker (NYT)
     
• Tax Changes: The "One Big Beautiful Bill Act" was signed into law on July 4th. Fellow advisor Andy Panko discusses implications for those in or near retirement. (Tenon Financial)
   
  • Also: Taxes on your charitable dollars are changing in 2026: What you need to know. (WSJ)
    
    Clients: If you're considering making a significant charitable gift in the next 12 months, let's discuss.
     
• M&A Dealmaking On The Rise: About half of respondents in a Goldman Sachs survey reported that tariffs would have no significant impact on their merger and acquisition strategy in the second half of the year. Despite tariff announcements, total M&A dollar volumes were up 29% in the first half of the year from a year ago. The bank expects a busy 2nd half of the year for M&A thanks to a resilient market. (GS)
   
• Private Assets Are Coming To Your 401k: There is over $12T in 401(k) accounts. Pending an executive order signed by the President, private funds are about to get added to the menu. (BBG)
   
• Retirement: How much should you plan to spend on healthcare in retirement? Here's one way to prepare. (Barron's)
   
• Fed Meeting: The Fed held rates steady at this week's meeting, but odds of two rate cuts in this year are declining with futures markets pricing in one quarter point cut at the October meeting. Next month's September meeting is a toss up. (WSJ)
   
• Travel & Spend:
  36 Hours: Reykjavik (NYT)
  36 Hours: Key West (NYT)
  36 Hours: Long Island's East End (NYT)

(Pie)Chart of the Month

Nasdaq Today vs. Nasdaq '95

Source: DataTrek.

"The Nasdaq [Composite] continues to eerily track its mid-1990s bull run. The [Nasdaq Index] has doubled since its low in Dec 2022, close to the index’s 91% gain over the same period from the start of 1995." - Nick Colas & Jessica Rabe, DataTrek.

Management Tip of the Month

We're rolling out a new section designed to help business owners and leaders be better. Each month, we'll feature a management tip from HBR.

Stop Having So Many 1 on 1's!

If you’re a senior leader, your calendar is likely packed with one-on-one meetings. But instead of fostering alignment, an overload of one-on-ones often creates fragmentation, siloed thinking, and trust issues. It’s time to shift how you use your meeting time. (HBR)

Firm News

A Three Hour Tour...

PieCapital hosted a happy hour cruise in St. Michaels, MD for friends of the firm in the DC area. Thanks to all who came and braved the weather!

Back to School!

Molly's daughters are back at it! Lily (above) started 3rd grade, and Evie (below) started kindergarten!

Wild Knight

We traveled to Ohio to see our cousin get married. Everyone stayed up past their bedtime at the reception...in a castle! Best wishes, Phoebe + Oscar!

Happy Birthday Jack!

Jack turned 6 and we celebrated at Bar Taco.

Hooray tacos! Hooray Jack!

In Memoriam

Jack L. Thompson
February 4, 1949 — July 11, 2025

I first met Jack Thompson while working at BB&T seven years ago. After a 47-year career in the oil business, Jack decided to hang up his boots. He came into one of the bank's Texas branches one day looking for someone to help him manage his retirement funds, so I was patched in on a conference line from our Raleigh office to try and help.

Now, in those days we didn’t have Zoom, so you really couldn’t discern a whole lot about who was on the other end of the line. [READ MORE]

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