• It’s been a volatile week in the markets, largely driven by a selloff in software stocks.
• Just a year ago, software stocks were the darling of the market, and now they’re the ones being hit the hardest.
• The pendulum has swung hard from everyone piling into software to everyone rushing out of it.
• The big question is whether this is a temporary oversold situation or something more permanent.
• There are certainly synergies you would expect between software and AI, yet software has been completely left behind so far.
• It may be a case of the baby being thrown out with the bathwater, something we’ll continue to monitor closely.
• We’ve seen similar situations before, like when people thought Google was dead a year ago, only for it to gain massive value since then.
• Another key concept we always focus on is market breadth.
• Breadth looks at participation across the market — not just what the major indexes are doing, but how many stocks are actually moving up or down.
• Sometimes the market can hit new highs while most stocks are quietly being sold off underneath the surface.
• Other times, money simply rotates from one sector to another without damaging the overall market structure.
• This week, breadth has largely held up despite the volatility.
• Instead of stocks being thrown out of the market, it looks more like investors are just moving around between sectors.
• Software stocks are being sold, while other previously lagging sectors are seeing money flow in.
• Even though the overall market is down this week, the breadth indicators suggest this is more of a normal reconfiguration.
• Diversification is also doing what it’s supposed to do right now.
• While U.S. stocks have been under pressure this week, international stocks have been holding up relatively well.
• In some cases, overseas markets are actually up over the last year and even year to date.
• This highlights why having investments across different regions matters.
• We’re not always going to see every market move together, and that’s where diversification can help smooth volatility.
• Another topic we’re getting a lot of questions about is gold.
• Even central banks, like the Bank of England, are talking about buying and potentially selling gold after its big run-up.
• We recently did a deep-dive podcast on gold that covers the topic in detail and explains our full thought process.
• In that podcast, we also talked about the risks in silver — and we’ve already seen that play out.
• If you have questions about gold, we highly recommend watching that episode.
• Nothing that happened this week changes the outlook on our Fearless Forecast of the S&P 500 hitting 7,500 this year in our view.
• A lot of the rotation we’re seeing is actually healthy for the market to find its footing.
• Volatility picking up from time to time is normal and even necessary in long-term bull markets.
• Almost every year includes some type of correction — a drop of more than 10% — even if people barely remember it afterward.
• These short-lived pullbacks often happen quickly and fade just as fast.
• Of course, sometimes normal corrections can turn into bigger bear markets.
• We saw that in 2007 when repeated dips eventually turned into the 2008 financial crisis.
• Our sell signals back then helped clients avoid much of that major decline.
• This is why our Invest and Protect Strategy is so important.
• It’s designed to participate in market growth while protecting against big, bad bear markets.
• For those nearing or already in retirement, protecting your nest egg is critical.
• Our goal is to help you enjoy your retirement as your second childhood without parental supervision – without worrying about the ups and downs of the market.
• As always, we’ll continue watching all of this closely for you.

Transcript:

Ken Moraif
Hello everyone, and welcome to our market alert. Video for today, which is Friday, February. I was about to say January, February 6. 2026 I’m glad you’re joining us. We have a lot to talk about. I’m in sunny Florida, where, apparently, a few days ago, it was 32 degrees, and they had snow in Tampa. So this weather that’s going on, this weather storm, is just throwing the whole country upside down. And what’s weird about it is the people who want snow, Colorado got nothing. So it’s kind of backwards, but we have a lot to talk about. So I’m glad you’re with us. We are going to have more fun than a human being should be allowed to have when talking about all this boring financial stuff, as we always do. And so we have a lot to talk about. For example, you may have noticed that the software stocks are just selling off, and that’s causing the whole market to go down with it this week. But there are some sectors that are actually up this week. So we’re going to talk about diversification. And then one thing that also is very interesting, and that is breadth. And we always want to look at breadth, and if you don’t know what breadth is, then you’re going to have to stay tuned, because we’re going to talk about breadth. We’re going to talk about our fearless forecast, and how whether it’s holding up or not, and so we have a lot to get to get into. So let me bring our chief investment officer with me, Jordan, roach, Ken.

Jordan Roach
Good to see it and seem like we’re in the same city that much in the last month or so.

Ken Moraif
Yeah, it’s true, and the internet is making it very weird. I don’t know if you’re the one that’s moving strangely or me, but one of us is, is like moving like Max Headroom. So internet is, is always a challenge. And I’m in I’m in Florida, I’m in Miami. You would think that the internet here would be down there, but man, is it’s spotty. It’s terrible. I want to tell you. I’m here in Miami for a financial conference. I keep getting invited to these conferences that blow my mind. You know, it’s like, it’s like little old me. What am I doing here? And I’m sitting next to last night at dinner the one of the directors of the United Arab Emirates sovereign wealth fund. Wow. Yeah, so, I mean, this guy, I don’t know what the UAE sovereign wealth fund is, but I bet it’s like, hundreds of billions of dollars. And these guys are looking to invest in the in the US I’m sitting next to, you know? I mean, it’s like, it’s crazy. I get invited to these things. I don’t know why, but I enjoy meeting these people. You know, I was like sitting at the foot of the master, as I say. You know, these people are smarter than me, so I can always learn from them. And just being, just talking to them, you know, you kind of absorb stuff. So anyway, that’s what, that’s what I’ve been doing the last few days. Lots been going on. You know, software. Let’s talk about software stocks first. So software stocks a year ago, where the Darling, right? They were like the top thing. Everybody was piling into software stocks, and now, boom, they’re the ones that are being sold off. Because what is it? Ai now is going to replace all the software stocks? So we went. The pendulum swung way one way, and now it’s, it’s, it’s swaying way the other way. So what’s your take on all of that?

Jordan Roach
It’s really interesting dynamic, right now, um, you know, you would think there’d be some sort of correlation where software, at some point, could, could pick up some of that lag. Because I you would, you’d think, depending on the software company. There could be some benefits and some synergies in there with the AI theme, but we’ve really seen them just left behind, completely behind. And the question that we have to ask ourselves, is this a temporary thing is going to be kind of permanent state where that just industry just kind of gets washed out? So it’d be something interesting to watch over the next few years, but for, certainly, for right now. I mean, they’re, they’re massive laggers,

Ken Moraif
yeah, and I mean to me, I mean, maybe it’s an oversold situation, okay, maybe they’re like being oversold and the baby is being thrown out with the bath water. But hey, you know what I can do things with AI now that requires other software to do, and I can do it in like, 14 seconds. And I can do it maybe even better than what you know, the software that I used to use did. And so it’s like, it’s insane what AI is doing. You know, it’s replacing even not just human jobs, but electronic jobs as well. It’s like a bizarre situation. But, you know, you also look at, you know, a year ago, everybody was like, okay, Google is dead as a software, but now, in a year, what their value is increased by a trillion dollars, or something like that. Yeah, they’ve been singing around in one. Maybe it’s an oversold situation, but what’s that?

Jordan Roach
Yeah, I think, you know, you’re gonna speaking of Google. I mean, yeah, they’ve been, they had some problems a year ago, like you said, and then over the last month, they’ve been kind of trading places as the, you know, most valued company in the world. So they’re picking up so but I think I’m with you that this may be an oversold position, and we’ll just, you know, continue to monitor,

Ken Moraif
yeah, so, and then, you know, we look at breadth, which is something that you’re always focused on, right? Which is across, explain what breadth means to everybody, yes.

Jordan Roach
So breadth is looking not just at the index, or indices, or a group of, you know, just one single stock and its performance is looking at the participation in a move. So what we can commonly see is, let’s say the S&P500 might be, you know, screaming to all time highs. But then we could look at, okay, but how many companies within the market itself are also up, are also up trending. So are we or down? And so it’s always interesting for us to watch to say, you know, do we see a bunch of companies joining the pack and also coming up, or we see the market going to highs while most companies are being sold off? And that can be an interesting point for us to watch.

Ken Moraif
And so, when you so, so basically, it’s kind of like the, I hate to use this analogy, but it’s like the deck chairs being moved around on the Titanic right? It’s, it’s, it’s like, it is, you know, yeah, software is being sold off, but it’s being it’s just basically a reconfiguration, but the the breadth has stayed relatively constant. That’s, that’s

Jordan Roach
a great way to put it, exactly right. It’s not, you know, the chairs are not being thrown out into the ocean. It’s just people are moving around within them. So, and that’s what we’ve seen. What we’ve seen. So breadth is largely holding up in this last week, when we’ve seen volatility pick up, seen software up, but we’ve seen certain sectors that have been lagging now, money moving into that. So that’s that’s a constructive dynamic that we actually like to see.

Ken Moraif
So even though the stock market overall is is, is down quite a bit this week. That indicator, at least, says that it’s just a normal thing. People are are reconfiguring

Jordan Roach
basically exactly right? That’s exactly what we’re seeing. Okay?

Ken Moraif
And then the other thing that, you know, we always preach to our clients and and our SCWPerS, by the way, and all you SCWPerS out there, I want to say hi to SCWPer Nation. And for those of you don’t know, skippers is the acronym for second childhood without parental supervision. So all of our clients who retire, they become squippers. So I want to say a big Hi to all you skippers out there. I know some of you actually live in Florida now, so, but diversification, we preach that. And you know, when we look at in our portfolio, we look at how domestic stocks have done this week, right the US denominated stocks, but then we look overseas, and we see a different story.

Jordan Roach
That’s a very that’s a very important point. So, you know, there are certainly times where markets all move together, up and down, but that’s not the case the dynamic we’re in right now. And so for us, we can kind of look at our you know, you know, developed exposure, developed European companies, parts in Asia, and those stocks are holding up relatively well throughout the sell off. And depending on the time frame you look at over the last year, even year to date, they’re actually up. So that is an important mechanism that we have is that, yes, we focus and talk a lot about big US stocks, but there are other places to invest.

Ken Moraif
So diversification is helping us this week, and overall, through time, diversification should also help us, by the way, Jordan, I’m kind of, you know, I can’t help it when you do these zoom calls, you know, you end up looking at yourself all the time. And my daughters always tell me about camera angles. So, you know, there’s this little thing going on right here, you know, it’s like, right I should have, I should have had the camera higher up, because then it’s looking down on you, and that way, you know, all this little stuff that’s going on there you can’t see. But anyway, you know, it is what it is. So we’ve talked about breadth, and that’s kind of positive. Our diversification looks good. You know, the foreign stocks have gone up, and so that kind of has offset what are what’s going on here? Basically, it looks like it’s a rotation, maybe an overselling of software stocks. One thing that we’re getting a lot of questions about is gold. You know, in fact, I was watching this morning the Bank of England, and you know, their their way of talking about what they’re going to do with interest rates and all that. It’s very interesting. It’s very different from ours. It’s very contentious. They start yelling at each other. It’s really funny. But they were talking about how gold has gone up so much they’re even buying gold. But now they’re talking about, is it time for us to sell gold? So now we’re seeing, like countries that are involved in the gold game, right, buying and selling gold as a commodity. I don’t want to get into it here. I just want to tease that anybody who wants to watch the great. Greatest podcast in the history of podcasts when it comes to gold, needs to which watch the one that we just did. Okay, I’m telling you, it’s going to be put in the Smithsonian for people 100 years from now, to go back and see what excellence in podcasting was when it comes to gold. We cover the topic, incredibly. And one of the things that we said in that podcast is that silver was at great risk because it’s kind of a precious metal. And boy, howdy, were we right. So ladies and gentlemen, if you’re watching this and you have questions about gold, and I know a lot of you do, since it’s had this massive run up, go watch our podcast on gold, and you’ll see what our thought process about all of that. So basically, let’s talk about our fearless forecast. So is our fearless forecast of the S&P hitting 7500 this year at risk because of what’s going on this week? Do you see any any risk to the forecast, which, by the way, is that the S&P would hit 7500 which is a nice rise from here, a big, you know, a big play from here.

Jordan Roach
Yeah, I don’t think anything going on this week would throw off that fearless forecast. You know, I again, I think from what we’ve talked about today, a lot of this rotation is constructive, you know, the markets gonna have to find its footing. It’s still off to a, you know, it’s a reasonable start for the year. So again, at times, volatility will pick up at times, and that’s not always a bad thing. You almost need that so the market can really find its footing and drive it slightly higher.

Ken Moraif
Yeah, and you broke up a little bit there, but I think we got what you said. The important thing to remember is, you know that almost every year, there is what’s called a correction right, which is a drop in the stock market, the s and p5 100 index of more than 10% but less than 20. It happens every year, but usually they’re so short lived that, you know, people forget they even happened. And if I asked you, you know, how many have we had in last five years? Most people would say zero, because you forget them. They happen so fast, but they do happen almost every year. So you know, this kind of volatility is relatively normal, but having said that, sometimes these things turn into what we call a big, bad bear. You know, I remember in 2007 the stock market kept going down and people were buying the dip, and it went back up, and they bought the dip when it went back down again. Happened repeatedly, and then our sell signal came along and said, Okay, it’s time to get out of stocks. And at that time, it looked like maybe this was just another buying opportunity. And in fact, our sell signal was exactly correct and told us to sell before the 2008 financial crisis happened, and, you know, from peak to trough, the market went down, what 57% in that particular scenario. And our clients who followed our advice during that did not participate in that. So, you know, our Invest and Protect Strategy is here, ladies and gentlemen, if you’re if you’re watching this as a client, to protect you from big, bad bears to the best that we can. And so that’s, you know, hugely important, particularly for you, right? Because you’re, if you’re a client of ours, then it means you’re probably within five years of retirement. If you’re a SCWPer, then you’re already retired. And we want to protect your retirement. We want you to enjoy that second childhood without parental supervision. That’s what it’s all about, right? We want you to go play and have fun and enjoy and spend time with your family and not worry about all this stuff. Let us get the gray hair for you. And you may notice that Jordan’s got a few more gray hairs than he did before he started doing this. He’s learning what it’s like, right, Jordan, so our Invest and Protect Strategy is super important, and I hope it gives you the peace of mind that it does us on your behalf. Because you know, I know that our biggest responsibility is to make sure that your money lasts as long as you do. And I feel very confident. We feel very confident that with our Invest and Protect Strategy that that should be accomplished, and I sleep well at night with that feeling. So want to thank all of you for watching this. Make sure you watch that gold podcast. Make sure you like and subscribe to this one, and then when you watch that one, like and subscribe to that one, because there are two different things, and we need as many people we had over 1.2 million people have now watched and viewed our podcasts, which to me, we’ve, or I shouldn’t say that. I should say we’ve had over 1.2 million views. Some of you have watched it more than once, but that just blows my mind. I’m flattered. I am honored. Thank you, and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

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