LFG January 2026 Investment Reflection, LFG Daily - January 21, 2026

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Luke Lloyd, CEO Lloyd Financial Group

Today, I’m passing the torch over to our Investment Team here at Lloyd Financial Group. While I spend a lot of time focused on planning, strategy, and the big-picture moves that build long-term wealth, our investment side is in the trenches every day navigating markets, managing risk, and finding opportunity. Below, you’ll hear directly from them on what they’re seeing right now and how they’re positioning portfolios in today’s environment.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

I never liked talking about short-term performance, but right now that’s all we have. It’s easier to have confidence in a manager’s ability when they’ve managed for a long time in a variety of conditions. Alas, while I’ve been a portfolio manager since 2000, this portfolio has only been around for several months, not several years. For what its worth, performance looks good, so far.

I’d warn that these numbers are unaudited, so you should view this as some guy making claims. That said, if you know a client or are one, you should be able to verify similar performance in your own stock account. At some point, I’d like these numbers to be verified by a third party. Until then, I just took the performance of our largest account, as it’s also had no net flows, and am presenting that as our performance. When we pay someone else to do this, they should be able to do a more thorough job. For now, this seems like a reasonable approximation that I hopefully didn’t screw up too badly.

At any rate, the fourth quarter of 2025 seemed like a noisy one, with a lot of back and forth. The Fed cut rates, the AI trade took a break, and value showed signs of life. We tried to take advantage of the tech weakness to grab some good names, which helped us start 2026 very strongly as liquidity came back after the Fed shrunk their balance sheet too much.

Our performance in the fourth quarter was OK, but bookended by a good, if partial, third quarter and an even better start to 2026. That’s fine by me, as trying to time when liquidity was going to get better turned out to be tougher than I thought. Getting through with minimal net scarring works for me.

As you can see, we trailed the S&P 500 total return by a few hundredths of a precent on the quarter. Our decision to get out of some defensive and software names and into names that could benefit from liquidity, like AVAV, MELI, and CRWV currently looks like a pretty good one.

Going forward, while we expect there’s still room for more upside, there are also more chances for trouble. Trump tariffs are causing volatility, as is Japan’s stimulus. However, inflation is still behaving, and the economy is being encouraged to run hot. This can continue for a while, until something derails the party.

For now, dips still seem buyable. That said, dips should be expected. We’ve tried to stay constant with ideas that should work well in these conditions, but as we go further along, we’re likely to want to sell some of these names that have done so well and consider other opportunities.

In time, we’ll see a more varied market with a wider variety of conditions. For what it’s worth, traditionally I was best known for outperforming in value and troubled environments, so there’s definitely a part of me that looks forward to those times. That said, current conditions, with a good economy, tame inflation, and strong liquidity, are much better environments for making gobs of money. Hopefully we can manage any coming turns in the road to preserve client wealth.

No tariff rulings yesterday, and my understanding is they’re going into recess, so the next chance for a decision is Feb. 20th. It probably would have been awkward to render a decision right in front of the Trump Davos speech. They’re also hearing the Fed’s Cook’s case concerning mortgage fraud.

Japanese bonds relaxed after soaring like a rocket, previously. That seems to be supporting risk assets in general. Japan’s Sumitomo bank, the second biggest, said they were aggressively rebuilding there local sovereign debt and also said they wouldn’t be surprised to see USDJPY hit 180 in the next three years vs. a current 158. That implies the yen gets cheaper at a pretty fast clip.

NFLX earnings looked good but they’re pausing buybacks to fund their WBD purchase, sending shares -6%. Revenue forecast wasn’t all that thrilling, either.

Trump has his Davos speech, today, around noon.

What does it all mean? Japanese bond market is relaxing, which should encourage global liquidity.

I know the world is talking about Greenland, Denmark, and tariffs. It’s a well-covered topic, at this point. I’d just go back to the basics-- what’s happened in the past in these circumstances and how can it effect growth, inflation, and/or liquidity? I’d also note that the tariffs have a Feb. 1st start date, so that’s the time horizon to focus on. Also, Trump is attending the World Economic Forum in Switzerland this week, where I’m sure there will be plenty to talk about. The only other thing I’d say is this remains a market where buying dips likely pays. That doesn’t mean we can’t dip, just that you still want to buy them.

Otherwise, events are generally working out as expected. We crossed the end of the year and liquidity pressures eased. The SOFR-IORB spread improved, credit spreads are improving, real rates got better, the Fed is growing the balance sheet, and so on. Who could ask for more?

However, a bomb got lobbed into the market on Friday when Trump announced he didn’t want Kevin Hassett to leave as head of the NEC to lead the Federal Reserve. Hassett leading the race to be the new Chair and the second-place expectation, Kevin Warsh, is much more hawkish.

Immediately, the dollar rose, stocks and bonds dropped. SOFR rates even rose, a bit. Suddenly, the skies darkened, as the friendly Fed just got much more hawkish. That’s just plain silly. Do you really think Trump, Mr. Negative-Rates, is going to push to elect a hawk? Maybe Warsh gets the job, but not if he’s going to keep rates up here.

One thing that I think confuses people is Trump is pretty unconventional in these selections. The initial names brought up often aren’t actually leading candidates for the job. Just look at what just happened to Hassett. Early predictions have a history of meaning little for Trump.

For instance, when Trump chose Powell as the Fed head back in 2017, Gary Cohn, Kevin Warsh, and even a renomination of Janet Yellen were all initially considered more likely picks than Jerome Powell. We know how that ended up. Why would this time be any different?

I’m generally very careful about shooting against what the market says, but this is one of those times. There should be zero market stress about Trump nominating anything approaching a hawk as Federal Reserve chair. Effectively what that means is the market is likely too tight.

Ceteris paribus, 2Y yields should come down, SOFR rates should relax, and more liquidity should come. There will be problems but deciding that you should sell bonds because Trump is about to hawk-up seems like a mistake. I don’t really care who gets picked but I feel quite confident it won’t be a hawk.

For investing purposes, which is what really matters, this means that there is more room for liquidity to improve. The market briefly got too tight for a silly reason and that will get undone. Right now, we’re worrying about a European tiff, and the market is likely to go down on Tuesday. Longer-term, these worries are happening in the face of tailwinds and the likelihood of further tailwinds. We can and will dip but it’s still hard for me to get too negative, just yet.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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This content is intended to provide general information about Lloyd Financial. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain an understanding of our investment philosophy, our strategies and to be able to contact us for further information.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Past performance is no guarantee of future returns.

Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable