Riding the Wave, The Market has Room to Run

June 25th, 2025:The market is rising, but under the surface, not everything is as strong as it seems. We’re seeing leadership from a few sectors—especially tech and industrials—while volume and breadth remain mixed. This isn’t a bubble or a frenzy, but it’s not a broad-based rally either. I remain constructive, but I’m positioning with care. In this post, I walk through how I think about current risks and opportunities—and how I’m shaping my asset allocation in response.

Markets don’t shout when they change direction. They whisper. And lately, I’ve been listening more closely.

Over the past few weeks, I’ve found myself wondering—not reacting, but wondering: Are we at the start of something bigger, or just nearing the end of a stretch that’s already given us most of its gains?

I’ve seen rallies come and go over two decades in the markets. Some were euphoric and obvious. Others were subtle, even sneaky. This one? It feels selective. Not wild. Not panicked. More like a river gaining speed—but not yet flooding the banks.

So I started going through my process. I looked at the charts, yes. But more importantly, I looked at the internals: who’s moving, who’s leading, and what’s hiding beneath the surface.

The major indices—S&P 500, Nasdaq 100, and the Russell 2000—have all been climbing. SPY is up 9% since late March. QQQ, which leans heavily into technology, is up over 15%. That alone tells a story: tech is back in the driver’s seat. Small caps have followed, but at a modest pace. The market has rallied, yes, but not all boats are rising equally.

Prices are moving higher. But volume? It’s not quite following. The recent breakout in the S&P 500 happened on volume nearly 22% below its 90-day average. That’s not a deal-breaker. But it makes me pause. The best rallies—the ones that last—tend to have broad conviction behind them. This one, so far, feels more like a few strong hands doing the lifting.

Roughly 71% of S&P 500 stocks are trading above their 50-day moving average. That’s healthy. But only 7% are making new 63-day highs. That tells me leadership is narrow. A few giants are pulling us forward, while the rest are trying to keep up.

And you know what? I’m okay with that.

Because this isn’t 1999. It’s not 2021 either. Back then, everyone was all in. We had SPACs, meme stocks, and crypto coins launching every week. Now? Investors are more discerning. Maybe even cautious. And that caution is, paradoxically, what gives me confidence.

If everyone were euphoric, I’d be worried. But the fact that this rally is still being questioned—that it’s not universally loved—tells me there might still be room to run.

The sector story adds another layer. Technology has gained nearly 20% over the past three months. Industrials and communication services have quietly outperformed. Consumer discretionary has been resilient. Financials are improving. But defensives—utilities, healthcare—and energy? They’ve lagged.

This is a risk-on rotation. Not wild speculation. More like thoughtful optimism.

As I pieced all this together, I thought of an old saying from Confucius: “慎终如始，则无败事。”If you end with the same care you begin with, there will be no failure.

So how do I balance confidence with care?

That question leads directly to asset allocation.

Rather than react to price alone, I ground my portfolio in principles and structure. In markets like this—where momentum is present, but conviction is mixed—I think in layers:

Core equities (55–65%)Tilted toward tech, semiconductors, and industrials—sectors with real earnings and innovation potential.

Defensive allocation (5–10%)Staples and healthcare provide some balance in case sentiment shifts.

Cash (5–10%)Optionality matters. Cash allows for quick rebalancing or capturing opportunity during pullbacks.

Fixed income (15–20%)Short-duration Treasuries and high-quality bonds. Not a return engine, but a stabilizer.

Alternatives and hedges (5–10%)Gold, macro strategies, or volatility overlays. Used to smooth out shocks—not to replace core assets.

Each layer serves a function. And when you understand the function, you don’t need to guess what comes next. You simply adjust as the environment evolves.

It all comes down to proportion and timing. As Laozi said, “上善若水。”The highest good is like water. It benefits all things without competing. It flows to the low places others disdain.

In other words: don’t force it. Go where the current is strongest. And move with grace.

To investors reading this—whether you're with a family office or just getting started in the industry—I encourage you to think not just in trades, but in principles. Don’t rush to be right. Take time to understand why something is working. Look underneath price. Ask what the market is telling you—and what it's choosing not to say.

Sun Tzu wrote, “Know yourself and know the market, and you will not be defeated.”

I don’t know where the market will be next month. But I do know this: I want to be in the game, riding the wave—eyes open, feet grounded, and risks respected.