Your Financial Advisor Hates This Bull Market

Oct 1, 2025

Doug Hagren, an investment professional known for his market insights, discusses the evolving impact of government shutdowns on the markets. He explains how these shutdowns, once feared, now cause minimal disruption due to investor desensitization. The conversation shifts to seasonal factors driving volatility, such as quarter-end adjustments and tax-loss selling. Additionally, Doug highlights the significance of the upcoming earnings season as a key market inflection point, overshadowing political drama and impacting investment strategies.

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INSIGHT

Defensive Stocks Are Historically Underweight

Defensive sectors (utilities, healthcare, staples) are unusually weak relative to the S&P, signaling a lop-sided market preference for risk.
Kirk suggests this imbalance is a yellow light for mean reversion rather than an immediate sell signal.

ADVICE

Position For Seasonal Volatility

Expect seasonally higher volatility into October and November as VIX historically spikes then.
Keep cash ready and avoid chasing in low-volume summer months ahead of the seasonal inflection.

INSIGHT

Risk‑On Momentum Trumps Political Noise

Broad market rotations matter more than U.S. political noise; current readings show a market in a clear 'risk-on' phase.
Kirk and Doug view the present environment as hot but not necessarily fragile because shutdowns aren't driving moves.

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Your financial advisor hates this bull market! Find out what it is as we talk the recent market conditions as well as the potential upcoming government shutdown, noting that while shutdowns once spooked markets, investors have become largely desensitized as they rarely have major lasting effects outside of government employees and contractors. Shutdowns have historically been used as political tools, sometimes causing GDP drag and reputational costs, but now often register as background noise. We also chat about seasonal and cyclical inflection points—like quarter-ends, tax-loss selling, and earnings season—that can drive short-term volatility. It's important to keep your perspective, recognizing political drama as a "circus," and instead focusing on underlying market cycles. Today we discuss...

Government shutdowns used to trigger fear in markets but now typically cause little more than short-term noise.
Politicians increasingly use shutdowns as leverage tools in budget negotiations rather than genuine fiscal concerns.
Past shutdowns have shown temporary GDP drag but very little lasting structural harm to markets.
Markets tend to quickly recover after shutdown drama fades, reinforcing investor desensitization.
The real drivers of volatility now are cyclical factors like quarter-end portfolio adjustments and tax-loss harvesting.
Earnings season consistently creates inflection points for markets, often outweighing political headlines.
Seasonal forces can exaggerate short-term market swings, particularly in September and October.
Positioning between defensive stocks and growth stocks is more critical for risk management than reacting to shutdown fears.
Broader global market trends often matter more than U.S. political events.
U.S. small-cap stocks have underperformed compared to large caps and international equities, reflecting structural weaknesses.
Investors should focus on long-term positioning rather than reacting to short-lived shutdown volatility.
Shutdowns reveal the widening gap between political theater and actual economic fundamentals.
Short-term market noise from shutdowns can actually create opportunities for disciplined investors.
Shutdowns are best understood as temporary disruptions, not trend-defining events.

Today's Panelists:

Kirk Chisholm | Innovative Wealth Douglas Heagren | Mergent College Advisors

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For more information, visit the show notes at https://moneytreepodcast.com/your-financial-advisor-hates-751