Markets Hit All-Time Highs (Despite the Drama)

January was noisy and February is starting off on the same note. Markets moved, headlines    screamed, and your portfolio probably felt it. But here's the thing: this is what markets do. The challenge isn't avoiding volatility, it's not letting it derail the plan we built for the next 10, 20, or 30 years.

Key Market and Economic Drivers in January

• The S&P 500 gained 1.4% in January and briefly crossed 7,000 for the first time on an intra-day basis. The Nasdaq Composite rose 0.9% and the Dow Jones Industrial Average gained 1.7%.

• The CBOE VIX volatility index ended the month at 17.44 after rising above 20 due to geopolitical tensions.

• The Bloomberg U.S. Aggregate Bond Index climbed 0.1% over the month as long-term interest rates rose. The 10-year Treasury yield ended the month at 4.24%, the highest level since last September.

• International developed markets jumped 5.2% in U.S. dollar terms based on the MSCI EAFE Index, while emerging markets gained 8.8% based on the MSCI EM Index.

• President Trump announced the nomination of Kevin Warsh as the next Fed Chair. If confirmed by the Senate, he would take office in mid-May.

• Gold surged to a record close of $5,417 per ounce before plunging nearly 10% on January 30.

• Similarly, silver closed as high as $116.70 before tumbling to finish the month at $85.20.The U.S. dollar index fell further to about 97.0, reaching its weakest level in nearly four years, before rebounding slightly following the Fed Chair news.

• The Federal Reserve held its policy rate at 3.50 to 3.75% at its January meeting, following three consecutive quarter-point cuts in the second half of 2025.

• Consumer Price Index inflation remained at 2.7% year-over-year in December, still above the Fed's 2% target. The Producer Price Index accelerated to 3.0%.

• Washington ended the month with a partial government shutdown.

• Severe winter weather across much of the Eastern and Southern United States caused natural gas and electricity prices to spike.

Geopolitical tensions edged market volatility higher

Markets dropped on tariff threats tied to Greenland, the S&P 500 had its worst day since October. Then Trump met with NATO's secretary general, cooled things down, and markets bounced back.

All of this happened in days.  This is short-term noise. Geopolitical drama makes for good headlines, but it rarely derails long-term investors. History is full of these moments: they feel urgent, markets react, then things normalize.

Our job isn't to predict the next headline. It's to stay invested while everyone else panics.

Fed concerns affected gold, silver, and the dollar

Gold and silver spiked, then crashed. This is why we don't chase shiny objects.

Gold hit nearly $2,900 per ounce. Silver topped $35. Then they both tanked on the last day  of January. What changed? Trump nominated Kevin Warsh as the next Fed Chair, markets liked it, and the "debasement trade" died overnight.

Here's the thing about precious metals: they don't produce anything. Warren Buffett put it best, gold just sits there. It doesn't earn dividends, grow earnings, or innovate. It's a bet on fear and inflation, not value creation.

Yes, central banks buy gold. Yes, geopolitical chaos makes it move. But January showed you exactly what happens when sentiment shifts, violent reversals. Gold dropped hundreds of dollars in hours because of a Fed nomination announcement.

This is why precious metals aren't a core holding. They're volatile, speculative, and driven by headlines, not fundamentals. If you want protection against uncertainty, that's what a diversified portfolio of actual productive assets is for.

Stocks and bonds have cash flows and fundamentals behind them. Gold just has the next headline. We're not playing that game.

Corporate earnings remained healthy despite uncertainty

Meanwhile, earnings are solid.

75% of companies that reported beat expectations. The economy is working.

AI and tech stocks had mixed reactions, even when they beat estimates because expectations were sky-high. But here's what matters: other sectors are growing too. This isn't a one-trick pony market.

The bottom line: January was volatile, but markets still hit new all-time highs. Corporate profits are strong. The fundamentals are working. Your job is the same as it was last month: stick to the plan, ignore the noise, and let compounding do its thing.