May 2025

The Slice

A Monthly Market Update & Investment News Roundup

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

Not so fast. Bessemer Trust alum Rebecca Patterson points out that foreign investors own roughly $22T worth of U.S. stocks and bonds, which amounts to a quarter of total U.S. assets. In the wake of tariffs, non-U.S. investors are now considering how much U.S. exposure is ideal for them under a new regime. Patterson points out that foreign investors trimming just 4% of their U.S. exposure would amount to $880B of outflows - which would send stocks lower and interest rates higher. To put that in perspective, that would more than wipe out every dollar that went into U.S. stocks and bonds last year.

And who could blame other countries for considering such a move? Hedge fund billionaire Ken Griffin likened our treasury bonds to an iconic brand; one that we have now put at risk. A tarnished brand, Griffin warns, can take a lifetime to repair.

Here's what you need to know.

Markets

2025 Year-to-Date Asset Class Returns

Data thru 4/29/2025. 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

• Tariff Impact on Travel Industry: International travel to the U.S. was down year-over-year in March. The U.S. Travel Association's Geoff Freeman assesses the impact that he believes tariffs will have going forward. (CNBC)
   
• It's Not Stagflation: Despite a shrinking economy and higher prices, it's not stagflation...yet. (Marketplace)
   
• Tech Employees Are Miserable At Work: Less salary increases, more nonguaranteed compensation, productivity monitoring software installed on your computer, and no more dry-cleaning...working in tech just isn't fun anymore. (WSJ)
   
• Holy Ship: The executive director of the Port of Los Angeles cautions that retailers likely have about 5-7 weeks of full inventories left and forecasts a 35% drop in container volumes next week. (CNBC)
   
• IMF Growth Forecast: The International Monetary Fund revised down its growth estimate for the U.S by 0.9% and the rest of the world by 0.5% for 2025 due to tariffs. (CNBC)
   
• Retirement: DOGE has reminded us that forced retirement may be more likely than you think. (Barron's)
   
• The Business of Sports: A new effort at the University of North Carolina is aimed at turning its student-athletes into well-remunerated social media stars. (NYT)
   
• Travel & Spend:
  36 Hours: Marfa, Texas (NYT)
  36 Hours: Hudson Valley, New York (NYT)
  36 Hours: Carmel, California (NYT)

(Pie)Chart of the Month

Goldman Sachs: "We revised our US growth and recession forecasts to reflect our expectation that the effective US tariff rate will rise by around 16% this year, and now forecast 2025 US real GDP growth of 0.5% (Q4/Q4) and see a 45% probability of a recession over the next 12 months."

Firm News

Q&A: An interview with Tate Jarrow, an expert in cybersecurity.

Tate served in the Secret Service investigating cybercrimes in the Agency’s New York Field Office. After stints at Google and ID.me, he now advises on matters of cyber security, privacy and identity.  He publishes a weekly Substack to help individuals like you improve their privacy and security. Subscribe here.

PieCapital: Tate you’ve been in cybersecurity for 15 years. What’s the most dangerous scam on your radar right now?

Tate Jarrow: With the help of AI, imposter scams are becoming increasingly sophisticated and dangerous. In an imposter scam, a bad actor impersonates a friend or family member in distress. An example might be a grandparent who gets a call from someone pretending to be a grandchild who’s in jail and needs money to post bail. With a recording obtained through social media or podcast, the bad actor can use AI to impersonate the voice of the friend or loved one and make the threat sound very credible.   

Most of our clients are older – either retired or nearing retirement – and there’s a general perception that seniors are more at risk for these kinds of threats. Why is that?

That’s actually a misconception. Data shows that younger people are more likely to get scammed, but older people are more likely to lose money. Think about receiving a phone call from a number you don’t recognize -- younger people are less likely to answer that call.

That’s because older generations often have a lower “index of suspicion.” Scammers know this and seek to use it to their advantage. A common scam targets surviving spouses who turn to the internet for companionship after the death of a loved one. Over time, trust is built, and the scammer can extract money from the victim. Simply being aware of these scams raises your index of suspicion and lowers the risk of falling victim to one of these types of attacks.

Knowing these risks, what advice would you give to our clients and subscribers?

1. Don’t answer the phone or respond to texts from numbers that you don’t recognize.
2. If you’ve only met someone online, start with the premise that they’re guilty until proven innocent.
3. Beware of non-standard payments.  If someone is asking you to buy them gift cards, use cryptocurrency, or other non-standard payment type (i.e., Venmo), approach with caution.
4. Don’t re-use passwords, especially across financial institutions.  Instead, use a password manager such as the ones Google and Apple provide on their devices for free, or a 3^rd party company like 1Password.

Thanks Tate.

PieCapital Adds Financial Protection Service For Clients

To help protect you against scams like the ones Tate described above, we're rolling out a financial protection service that defends you and your family's money, credit, and identity from thieves, scammers, and simple money mistakes -- it's called Carefull.  And it comes with $1 million of identity theft insurance in case bad things do happen! Here's how it works.

For PieCapital clients with assets under management, Carefull is included as part of your service! Stay tuned for an email with instructions later this month.

Tax Return Analysis

With tax season behind us, how confident are you that you're taking advantage of all tax savings opportunities available?

Good news! We've added Holistiplan to provide tax return review to our suite of services for clients and prospective clients.

Here's how it works:

1.    Obtain a digital copy of your 2024 tax return from your CPA or download a copy from your tax preparation software.

2.    Email hello@piecapital.com to request a secure upload link for your return.

3.    Upload the return using the link provided and receive an analysis of what triggered the taxes you paid last year as well as strategies to consider in 2025 and beyond.  Get answers to questions like:

• Are there ways to reduce my tax liability in 2024?
• Does a Roth conversion make sense for me this year?
• Should I consider a deferred compensation plan at work?
• Is my charitable gifting strategy optimized for my age and giving amount?

New Shredder!

At PieCapital, we're frontrunning tariffs with a just-in-time capital expenditure, the Aurora 2000 shredder. Ok, it's actually the Aurora 200, but we thought 2000 sounded better.

In Raleigh and need to shred? Bring your documents in, have a coffee, and say hello.

U.S. Clay Court Championships with family in Houston.

We traveled to Utah over spring break to see National Parks - Arches, Canyonlands, Bryce, and Zion!

Christy ran the Big Sur Marathon and raised money for Team RWB!  

Go Bulls!

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