The Sunday Drive - 06/01/2025 Edition [#165]

Musings and Meanderings of a Financial Provocateur

A Sunday Drive Around the Internet

👋🏼 Hello friends! Let’s enjoy a leisurely Sunday Drive around the internet and hope that June brings better weather to the Northeast.

🎶 Vibin'

This week, I’m vibin’ to a wonderfully competitive foursome of musicians. It’s a welcome reminder that we don’t always have to take ourselves so seriously. Enjoy.

💭  Quote of the Week‌

“There’s very little I like shorting more than hubris“
— Cade Massey

📈  Chart of the Week

Source: Rosenberg Research

Source: YCharts

Where to Now?

The first Chart this week screams a warning: U.S. households have 71% of their financial assets in equities, just 8% in bonds, and 20% in cash. After a decade and a half-long bull market, this imbalance isn’t surprising—but it is precarious.

The second Chart helps explain how we got here: since 2009, the S&P 500 Total Return Index has surged nearly 1,000%, while the Bloomberg U.S. Aggregate Bond Index has returned just 56%. When one asset class dominates by that much and for that long, behavioral finance tells us recency bias can take over—and portfolios become dangerously one-sided.

But we are no longer in 2009. Investors are older. According to the Census Bureau, the median age in the U.S. hit 39 in 2022—the highest on record—and over 10,000 Americans turn 65 every day. That demographic shift collides with another reality: the majority of equity exposure for many households is held in taxable accounts. So de-risking isn’t just about reallocating capital—it’s about managing embedded gains, tax drag, and sequence-of-return risk.

Asset location matters more than ever. Tax-efficient rebalancing, charitable gifting of appreciated stock, and strategically using Roth conversions or tax-managed funds should be top-of-mind. Meanwhile, replacing part of the equity allocation with hedged strategies, buffered ETFs, or even cash-flow-aligned fixed income can smooth volatility and reduce drawdown risk.

In short, more and more investors need to shift their mindset from “How much can I make?” to “How do I keep what I’ve made?” The answer lies not just in what you own—but where you own it.

Sources

• U.S. Census Bureau

• Roth conversion tax efficiency

🚙 Interesting Drive-By's

💡 Conviction-Led Contrarianism

Conviction-Led Contrarianism

📈 Sam Altman Wants AI to Create a One-Person Unicorn Worth a Billion Dollars

🎯 Knowledge Work is Dying—Welcome to the Age of Wisdom Work

🤔 Vitamin D May Slow Cells’ Aging by Protecting DNA

💸 How Big Homebuilders & Private Equity Made American Cities Unaffordable

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👋🏼 Parting Thought

Imagine… Just a dude managing the world’s most boring hedge fund, his dog, and a floating river office. 😊

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If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em (X ‘em?) at me.

Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,

-Mike‌

If you enjoy the Sunday Drive, I'd be honored if you'd share it with others.‌‌

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