Happy New Year! Our WTA Team’s theme for 2026 is Unity. This year, we’re working hard to make sure everything comes together for our clients and their wealth plans. When you’re talking about unity, you’re really talking about alignment and things working as one. You want to see alignment of your stocks in your portfolio in fitting in with global economic trends. You want to see that your tax planning is done with a mind to not just the current tax rates, but what the tax rates of the future will be. Today we’ll look at what is aligning and what it means for you.
First, we have the metals. Gold went over $4,500 an ounce, and is just off its high by 2%. Everyone likes talking about gold but it’s really the other two well-known metals that are on fire right now. Base metal copper shot up to $13,000 per ton after a rally of 4% yesterday to an all-time high. Its price already catapulted 42% last year. Silver has rocketed up 105% over the last 6 months to $75 an ounce. Not bad … But bad if you think about it for more than half a second. The price of gold is evidence of inflation, or at least, that the fear of inflation is very real. The price of silver and copper are in of themselves inflation-producing as they are part of the manufacturing chain for many things, chief among them silver for semiconductor material and copper wires for cars, housing and all things electronic. As these prices go up, so do many things. The alignment here is a very definite surge in some commodity prices.
What runs counter to that inflationary trend will likely be the price of oil. After the US incursion into Venezuela, it’s worth looking at some statistics. It is Venezuela, not Saudi Arabia that has the most oil reserves. Venezuela’s total reserves are worth $17.3 trillion and it’s 4 times larger than the GDP of Japan1. Under Maduro’s socialist regime, they’ve only been producing at 30% capacity. What happens when the world’s largest oil producer that has been laying dormant, suddenly produces (through US means or otherwise) to its full or near-full capacity? It means that the market should at some point be flooded by millions of extra barrels of oil per day. Already gas prices in the US are down to an average of $2.81 per gallon, the lowest average since 2021. This represents a savings of $11 billion for the sum of all American households this year compared to last. Another counterpoint to the metal prices surging might be Trump’s announcement Wednesday that he will be banning all purchases of single-family homes by institutional investors. Without that investor element to many home sales, prices of housing should moderate or even decline. So, Trump appears to be fighting inflation from the Oval Office with a dual-pronged strategy of lowering oil and housing costs. The big hitch here is that Congress would have to pass a law, and bipartisan is not a popular word right now.
As to whether the total of these two alignments is actually inflationary or not is hard to say. The CME Group Fed Watch Tool2 points to the probability of 79% of one rate cut over the next six months. Over the course of the next year that rises to 95%. However we’re just talking about one rate cut in the offing, so the market appears to be skeptical that we are going to see much mitigation of prices overall. The inflation narrative, if you just go by that, still lives.
Elsewhere in the market we see alignment in many names invested in AI remaining strong while many stocks in software are sinking fast. Yahoo Finance shows that Infrastructure Software as a sector is down 14% since October 28th3. AI has shaken the foundations of many software companies. AI stocks are up. Software stocks are down. We’re re-evaluating all the latter.
The biggest thing though is Debt. The alignment is everyone seems to have it. Consumers have it. State governments have it. The Federal government has it. As the national debt grows and interest rates stay elevated, the interest paid on the debt grows. If you’re bored, you can watch the debt grow AND feel your depression grow in real time at https://www.usdebtclock.org/. The National Debt grew $2.3 trillion in 2025 alone. You can bet on pretty much anything now. Kalshi has the “Peak US National Debt Under Trump Administration” odds (so we’re just talking about the next 3 years here) 5. 95% say it will be at most $40 trillion. 77% say it will peak (in that time frame) at $45 trillion and 43% say it will peak at $50 trillion. Newton’s Third Law would tell us that for every action there is an equal and opposite reaction4. The cosmic equation, in this case the financial equation, must balance the force of the debt and taxes may be the only answer.
States are experiencing the same issue. California may have fired the first salvo in this war on debt. The casualties of this war may be those who have succeeded financially. California, spending more money annually than most states, finds itself in a $1.6 trillion liability hole, which is over half the state’s GDP. Some interests in California are putting forth a ballot initiative that could go on the November 2026 ballot. The proposal would put a 5% Wealth Tax on residents worth over $1 Billion6. The Billionaire Larry’s, Page and Ellison, are already fleeing the state7. How long will it take for this type of Wealth Tax proposal to make its way to other states or up to Washington? How much pressure will increasing debts place on the politicians and bureaucrats to find money? While we’re not going to cry a river over these billionaires losing Yacht No. 3, you’ve got to admit that this is a very slippery slope to go down. One day millionaires may be hit with a tax like this, “an expropriation of private property” as Bill Ackman claimed. We can envision this tax affecting future retirees if Washington can’t reign in the spending. If you listen to Elon Musk and Ray Dalio, there’s no appetite in Washington to do so.
So, what does The Wealth Training Academy say about the national debt and the Wealth Tax proposal in CA? Two things: One, we hope this type of Wealth Tax never travels East of the Mississippi. Two, let’s realize that it’s very likely that income taxes will have to go up, maybe by 2029, so let’s be proactive and restore control to your world!
We have brought up Roth conversions to many of you. For some of our clients it hasn’t been appropriate due to age, break-even points or income levels, etc. BUT … we all face a common future. We find it unlikely that any Wealth Tax could levy Roth IRAs as it would make the government liars. Not that liars don’t make up the government … Let’s create a plan to keep more dollars away from panicky lawmakers in Washington that will be vacuuming under your couch cushions for spare change. We have a known quantity for the next 3 years as it relates to taxes. 2026, 2027 and 2028 should keep the same income tax bracket structure since the tax cuts were extended. But we were promised nothing afterwards. It’s very hard to try to convert everything you could realistically want in a Roth IRA in a single year. The month of April would go from flowers and nice weather to your personal tax pain cave. We can avoid that by looking over the next 3 years for you and dividing that number up, taking your time horizon and financial goals into account. And yes, our calculations will include IRMAA brackets so we can estimate if your Medicare costs will go up and can tailor the amount converted accordingly.
Your estate planning could be affected as well. We may find future politicians playing a game of Limbo with all of us. The bar for estate taxes for a single individual sits at $15 million now. What if it’s $1 million in the future? Without action we’ll be falling on our butts trying to get under that bar. Reminder the numbers in place now are just levels that can be manipulated. Let’s put documents in place to mitigate potential impacts and then retitle accounts if necessary. If you have a small business, you’re a target for future lawmakers filling that unfillable budget abyss. You need tax a plan to deal with an increasing likelihood of politicians turning you upside down to shake out your pockets in a few years.
We can be either proactive or reactive. You pay us to be proactive. Give us a call so your advisor can create a 3-Year Roth Conversion Plan if it makes sense for you and your family. Let’s get you in to see our estate planning attorneys or to create a tax plan if you have a business and not just your own family’s futures in your hands. Let’s get your overall wealth plan in alignment with today’s tax laws and market trends AND with a mind to what may be coming around the bend. Uncle Sam is still smiling in all the pictures I’ve seen. In the years to come, we want to make sure you can still smile too. If you listen to us, we’ll change your financial world …
Sincerely,
Scott Wright
Portfolio Manager
The Wealth Training Academy
(Marketing Disclaimer: Past performance is never a guarantee of future results. We offer a lot of services. Our planning, tax, and insurance strategies are designed to improve financial outcomes when implemented as recommended. We’re confident in these strategies, but results will vary based on individual circumstances. Investment results cannot be guaranteed. Unless otherwise indicated, no third party individuals mentioned in this article are clients of our firm, nor have they been compensated for appearing. This article is for educational purposes only. For personal advice about your situation please call our office. ~The Compliance Department.)
Sources:
1@KobeissiLetter
3Software – Infrastructure Stock Performance – Yahoo Finance
4Newton’s Laws of Motion | Glenn Research Center | NASA
5Peak US National Debt Under Trump Administration Odds & Predictions 2028
6Bill Ackman slams California wealth tax plan, says it will drive jobs, money out | Fox Business
7Billionaires leave California ahead of proposed 5% wealth tax measure | Fox Business
