We saw diversification come back starting last year. Global equities in particular, even though US equities in Q1 2025 were sideways. Non-US stocks continue to move forward, over 30% YTD returns in 2025. The US did okay at 18%, but we saw really strong impetus outside the US, partially from weakening dollar, but also from fundamental growth in those markets.

Valuations are extremely important. They're good at telling us when something is expensive or cheap, but they're not very good timing mechanisms. Usually when we see a reversion in valuation, there's some catalyst.

All of this starts from the debt picture and the deficit picture. Looking for opportunities as the Treasury and central bank are to address that debt situation. In the short term that means lowering rates. Higher inflation is good for inflating away debt, but also we're seeing weakening in the economy, particularly in the labor markets.

Small caps in general look very attractive to us. We're looking at US equities. The US large-cap market is trading pretty close to 40, the all-time high is 44. Small caps on the other hand are still relatively cheap.

Geopolitical and political are on top of everything happening today. Oil prices selling off massively today because it sounds like the administration has decided not to attack Iran. That could change tomorrow. These geopolitical events are always happening.

I've started to say that 3% is the new 2%. Prior to 2021, everyone talked about 2% as the target. Now 3% seems to be the norm. We get readings below 3% as we just did earlier this weekend, there's happiness. We've switched our mindset to sort of tolerate higher inflation.