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AI Stocks, Market Trends & Crypto | Investing Insights w/ $13 Billion CIO Mark DiOrio
21 Plays13 days ago
In this expert-packed episode of The Future of Finance, Marissa Wood welcomes Mark DiOrio, Chief Investment Officer at Brookstone Capital Management, to unpack everything from 2025’s wild stock market to AI dominance, dividend stock strategies, buffered ETFs, and crypto access without the chaos.
Whether you're an investor trying to make sense of this year's tech surge—or an advisor wanting to diversify your portfolio beyond the Magnificent Ten—this episode brings the clarity you’ve been craving.
🧠 Learn what actually worked in 2025
📈 Discover what to expect in 2026
🔍 Get portfolio strategies from one of the nation’s top CIOs
⏱️ Timestamps
00:00 – Intro: Meet Mark DiOrio, CIO at Brookstone
01:45 – Brookstone Capital Management: Who they are & what they do
02:36 – What a Chief Investment Officer actually does
05:05 – How Brookstone helps advisors offer high-level strategies
06:14 – Market recap: What happened in 2025
10:03 – AI, tech stocks, and market leadership
12:18 – Will AI dominate in 2026—or will the rest of the market catch up?
13:57 – Why diversification still matters—even in an AI-driven world
15:23 – Clients want more tech, but advisors need to manage expectations
17:27 – Avoiding headline investing: How to stay strategic, not emotional
18:22 – Core + Satellite portfolios: The Brookstone approach
20:04 – Matching risk profiles to core strategies
22:43 – Satellite strategy 1: Dividend Growth Value Baskets
25:38 – Why baskets work better than DIY stock picking
28:58 – Satellite strategy 2: Buffered ETFs explained
32:15 – Liquidity + protection: Why some clients prefer buffers
34:03 – Satellite strategy 3: Crypto via ETF Exposure
38:29 – Crypto like gold: Exposure without the complexity
39:44 – How other advisors can partner with Brookstone
40:31 – Final thoughts: Insights heading into 2026
Recommended
Transcript
00:00:09
Speaker
Hi, everyone.
Introducing Financial Experts
00:00:10
Speaker
Welcome back to the Future of Finance podcast. I'm your host, Marissa Wood, investment advisor and owner of Union Financial Services. And today we have a really exciting guest and episode ahead of us.
00:00:24
Speaker
We are joined by Mark DiIorio, chief investment officer at Brookstone Capital Management. Mark has over 25 years in the industry and is a wealth of knowledge when it comes to stock market investing.
00:00:38
Speaker
So Mark, thank you for joining us. Oh, it's great to be here. Thanks,
Brookstone's Growth and Services
00:00:43
Speaker
Marissa. So Mark, tell me a little bit more about who is Brookstone. Sure, Brookstone Capital Management is what's referred to in the industry as a turnkey asset management platform, or a TAMP.
00:00:57
Speaker
And what we really are is an extension of an advisor's practice where we provide all the investment management services. So turnkey, meaning we have full functioning research staff, full functioning portfolio management,
00:01:12
Speaker
market monitoring, and then also kind of the the other pieces that sometimes go unnoticed, if you will, kind of the operations aspect, trading aspect, advisor support aspect, as well as some so marketing and compliance features as well.
00:01:30
Speaker
But at at our root, what we're really doing is building an investment platform of improved investment vehicles, strategies, and some suggestions to help advisors build those portfolios for individual clients.
00:01:45
Speaker
Okay, great. And and what is Brookstone's current assets under management as of October of 2025, approximately? We are north of $12 billion, on the doorstep of $13 billion. So it's been a pretty good ride. And when I joined about 10 years ago, were just over a billion in assets. And so I've really grown over these last 10 years. And I think that it has a lot to do with at least the way we look at service, look at individual clients, but also how we look at investments by having what we call an open architecture platform with the idea being that you know markets go through different trends and phases.
00:02:23
Speaker
And what we want to do is have access to different strategies that you can employ during different phases of markets, but also making sure those investments are appropriate for individual clients.
CIO's Role and Investment Strategies
00:02:36
Speaker
And what says your position as a CIO at Brookstone entail? ah Sure, so so as chief investment officer, I oversee the entire investment function or platform of the firm.
00:02:48
Speaker
So one area of that, of course, is reviewing or research, researching different investment vehicles. So that could be exchange traded funds or ETFs, mutual funds, ah individual stock strategies, individual bond strategies, structured notes, and so forth. And then also looking at different investment money managers that may manage those vehicles or strategies and so you do due diligence on those different firms so some of the firms everyone's heard of kind of the national brand names but there's a lot of under the radar ah boutique managers that we review that you wouldn't have heard of normally but we do a lot of deep dives and try to expand the opportunity set for investors trying to uncover different or innovative
00:03:36
Speaker
approaches to the market that may ah warrant a piece in a portfolio. And so but one of the tenants was, and what we did early on was basically come from the view that we think there's going to be a lot of innovation in the investment landscape.
00:03:52
Speaker
And so we want to keep an open mind to be able to review new strategies new approaches as they come in and then decide if they're appropriate for different investors so that's one piece of it kind of this the deep dive research aspect to that and that constantly changes there's been a proliferation of new types of strategies in the etf world exchange-traded fund world that are appropriate for for investors we think add value that really you didn't have in other investment vehicles previously. So this is really a new age for investors that a lot of strategies they may not have heard of that you can incorporate into portfolios that I think make a lot of sense today.
00:04:34
Speaker
The other function is really that portfolio management function where we try to build turnkey portfolios using an open architecture approach, kind of navigate the platform ourselves, build those portfolios to make it a little bit easier ah for advisors to plug in and deliver service to their clients. So a number of different portfolios that we run um and they scan from very conservative to a little bit more aggressive for sure.
00:05:05
Speaker
Yeah, I mean, I can speak to personal experience. Brookstone has helped us scale our practice and introduce innovative solutions to our clients to help them reach their goals. And I will say having the Brookstone expertise and portfolio designers It really does allow me to be in front of my client and give them that personalized connection because I have the back office support from Brookstone.
00:05:31
Speaker
And so I think it really does add value to us, but it then it passes along to the client as well. For sure. And I think what we're the way we look at it is, one, at the end of the day, we're always trying to deliver value to the end client and helping advisors serve their client.
00:05:48
Speaker
And two, making sure advisors enjoy what they're doing. And three, allowing advisors to scale their practice, meaning you can grow without it disrupting the the client experience. And so being efficient,
00:06:02
Speaker
trying to think through strategies and doing a lot of the legwork work up front. I think it makes a great partnership. And I know we've had a lot of ah yeah and I know you've had a lot of growth as well. So we've definitely enjoyed working with you, Marissa.
00:06:17
Speaker
Yeah, thank you, Mark.
Stock Market Trends and AI Impact
00:06:18
Speaker
So we are heading into the end of 2025. We're in the last quarter. So it really is the perfect time to discuss what this past year has looked like in the stock market.
00:06:29
Speaker
Can you provide us with a bit of a stock market update, state of the market report? Sure. Well, this has been a very interesting year. In the in the in the beginning of the year, we had a lot of uncertainty coming into the year. And then there was what's famously called Liberation Day with the the tariff announcements and and so forth. And the market really didn't know how to approach that because there really hasn't been a lot of trade or changes in trade using tariff pulse as a policy.
00:06:59
Speaker
And so the market sold off very quickly in early April. but then it ah ah ah rebounded just as quickly and has headed higher ever since. So about almost a six month rally essentially at this point.
00:07:12
Speaker
And what's really driven the market, I think it's important to point out that this market is unique in the sense that everybody may have heard of the S&P 500. So that's the broad gauge of the US stock market. Well, it's comprised of 500 US based stocks across 11 different industry sectors.
00:07:31
Speaker
However, today we have a major concentration in that broad index where 38% of the entire index is comprised of just 10 companies. So the top 10 and maybe be more familiar, you may have heard of the mag seven in the news, the top seven tech stocks base basically.
00:07:50
Speaker
These mega mega cap stocks have really been driving the market at the first part of the year, it drove the market lower. where the rest of the 490 stocks actually were about flat, didn't really decline.
00:08:03
Speaker
And then the rebound has been led by those large mega cap tech stocks. Now what's driven this has been the theme of artificial intelligence or AI.
00:08:14
Speaker
Well, it's not just AI, it's really the build out of the infrastructure to support kind of this next leg of our economy. What role will artificial intelligence play?
00:08:25
Speaker
And so those large cap companies have embarked on something they haven't really embarked on to this scale, which is a major capital expenditure or spending phase.
00:08:36
Speaker
So combined, the top seven, the MAG-7, are spending more in terms of dollars, so think in the hundreds of billions of dollars. ah more than the budgets of NASA, Department of Energy, and Department of State combined. So it's a major spend.
00:08:53
Speaker
And what they're spending on are three main components, which would be one, semiconductors or chips. So you if you hear chips, those are semiconductors. What semiconductors are is they process and store data.
00:09:07
Speaker
So you might in your computer, of course, when the computer's thinking, it's processing data. And then when you're saving documents, storing And that's pervasive of our across our economy. So I think semiconductors are akin to ah today's oil in that semiconductors power the modern economy.
00:09:26
Speaker
They're in consumer electronics. The average car today has 1,500 semiconductors in semiconductors in it So if you remember the the picture of all the cars in the parking lot during the COVID pandemic and they couldn't move the cars, well, it wasn't oil that they were waiting for.
00:09:45
Speaker
It was semiconductors that they needed to power the car. So semiconductors are very important. Why they're important for artificial intelligence is you have to process a lot, a lot, a lot of data.
00:09:57
Speaker
So that's one component. the set And that's where you hear may hear of a company called NVIDIA. Funny name, but they're actually the the largest stock and their value is over $4 trillion dollars in terms of market cap.
00:10:11
Speaker
It's bigger than Apple. It's bigger than Microsoft. So it's very big. The next segment is data centers. So you need to warehouse the semiconductors somewhere and you need these big data centers and they're becoming larger and larger if you think of of a warehouse, kind of of this modern warehouse, but all they're doing, they have servers and they're running these large-scale semiconductor processes to think and to um purdue and his store data.
00:10:42
Speaker
But that data center is just not the building, it's everything that goes into it, from switching to cooling and all the scale that goes into it. And then the third thing, a third component, ah when you're talking about spending on artificial intelligence,
00:10:58
Speaker
is power. You need more power. um And this is a multi-year trend. All three of these concepts are multi-year spend to build out the infrastructure needed. So it's not just, even though the large cap tech companies have really kind of ah got a lot of the headlines and maybe the market darlings, the rest of the economy is going to benefit from this spend. And I think there's a catch up phase potentially as we we look out through the rest of the year. So I would keep in mind that although you may hear about consumer weakening or softness, and usually the consumer drives the US economy, we're in a rare moment where the business cycle and business spending is driving the US economy.
00:11:41
Speaker
And so this is a multi-year segment. and And notice that it overrides any of the kind of the nuances of the headlines day to day that may change and do change.
00:11:52
Speaker
And we're not investing in headlines. We're investing in themes that are driving the overall economy. That's a great point and a good summary, really, of how this year has been. Now, do you feel as though that focus on tech and AI companies and spending is going to continue in
AI's Economic Influence
00:12:11
Speaker
2026? Do you see any major changes happening where we should shift our focus a little bit?
00:12:19
Speaker
So from an overall economy perspective, I think the spending continues, meaning these big outlays of cash it cost ah costs a lot of money to do this. But I think from a market's perspective, the rest of the, I mentioned that the top 10 stocks and have really garnered headlines, but the other 490 stocks have not participated, nor had really small cap stocks.
00:12:42
Speaker
I think that changes where there's a catch-up phase, and the rest of the economy starts to benefit as the spending goes through because it impacts all parts. And when I say power, you'd say, well, is that utilities and so forth? Yes, those actually have their growth trajectories have slightly changed from a boring utility company to now having to figure out how to generate 30% more power. And there may be stories pop up where they put these data centers and all of a sudden the electricity bills have gone up for ah for households and so forth. Well, that's because they need to generate more
00:13:17
Speaker
more energy and more power to run these facilities, which are all good except for you need to figure this out and build the infrastructure. So we're in this phase where you got to spend this out. It's not a six month or a one year spend. It's really a multi-year spend. And the spending really just started about a year or so ago and is really ramped up. At first it was questioned, but now it looks like it's going to continue. So I think it does go it well into 2026, but also the other parts of the economy are going to benefit. It's not just going to be kind of those main big tech firms that that have benefited.
00:13:54
Speaker
It's going to be the rest of the economy that starts to move higher with it. That's an interesting point that I haven't really heard anyone else discuss before, that just because those 10 companies seem to be driving the market now doesn't mean that we should not diversify across a lot of different industries because they will all benefit because of those 10 that are spending more and going to be spending more.
00:14:21
Speaker
Yeah, it's very interesting in terms of the, it's it's almost staggering terms of the size of the spend, because it's very unusual to see this level ah of spending and commitment on a project.
00:14:32
Speaker
And it's multiple companies doing it simultaneously. I had seen, there'd been some skeptics on Wall Street where you saw these numbers that would come in on the estimate of the spending, and they seemed awfully low and not really connected with the monies that we're seeing come out. But a recent one i saw was about 2%. $2.9 trillion in spending from now until about 2030.
00:14:54
Speaker
ah That's probably a much more accurate number since since they're spending about $360 billion this year. And you you factor that it's going to, or at least the second half of this year.
00:15:06
Speaker
ah So that that number seems a lot more realistic um when you think about it in the trillions coming out through the rest of the economy. So definitely hasn't impact at um ah that we're we're monitoring, both from an economic standpoint, but also a stock market and standpoint as well.
00:15:24
Speaker
Okay. Yeah, that's a great conversation to have with a client because I know I hear weekly if not daily from clients that they want a very strong percentage of their assets in tech companies.
00:15:38
Speaker
But maybe let's have that conversation of diversifying for future performance, not just past performance. I have a great chart that I i post up some from time to time, which is if you were to invest in the largest company when it becomes the largest company in the S&P 500, and at that point, it's the most popular, everybody knows it, it it cannot be beaten, and there's no one going to disrupt it or or change hands.
00:16:08
Speaker
Well, if you're invested in that and then once once you change from ExxonMobil to IBM or to Microsoft and so on, just going into the largest company, you would trail the S&P 500 over time by hundreds of percent.
00:16:26
Speaker
ah so So the point is, by the time they've gotten this large, you get the law large numbers and it's really hard to really grow further from that start and you have a lot of the gains already been had where a lot of other companies haven't experienced those gains yet and so they're really poised to make some type of recovery in relative terms but again that's a really good to to your point marissa which is diversification pays benefits over time we're just at this acute moment And if you take Apple stock, for example, from over the last 10 years-ish, and you'd say, oh, I wish I bought Apple 10 years ago. Well, ah just recently, you'd look at that and you'd say, wait a minute, Apple's actually underperformed the S&P 500 over that 10 years.
00:17:12
Speaker
So that's how hard it is to kind of stay at the top, if you will, especially in terms of stock market performance. Still a vastly important company, still one of the largest companies.
00:17:23
Speaker
But from a performance standpoint, ah you'd be better off diversifying that base. Yeah, it's it just emphasizes the importance of people not doing this on their own and just following headlines or their Googling techniques and really working with an advisor who has a backing of someone like Brookstone to have a diversified portfolio.
00:17:48
Speaker
um And that kind of leads us into one of the next topics I wanted to discuss with you, and that is Some of the solutions that we have access to with Brookstone.
00:18:00
Speaker
Now, most of the time when we put together a portfolio for a client, we start out with a core portfolio. And then we add a couple satellite or bespoke strategies to that to make it more innovative and exciting.
00:18:16
Speaker
Now, talk to me first about some of those core portfolios and how we make sure they're risk appropriate for the client.
Diversification and Core Portfolio Building
00:18:23
Speaker
Sure, so just as you mentioned, our overall investment philosophy and portfolio construction approach is based on building a core plus satellite allocation design. And what that means is you build a solid core portfolio consistent with your risk profile.
00:18:40
Speaker
where you have a mix of kind of um traditional stocks and bonds and you diversify amongst the different stock categories large cap mid cap small cap international kind of have all the bases covered yeah and then the different bond categories as well and I'd say as a rule of thumb a moderate or a balanced investors about 60% equities 40% fixed income And then from ah from there, we say, well, what type of core portfolio do you want? So we have some that really track the indexes or low cost index type strategies.
00:19:15
Speaker
And then few that use the same idea, but maybe take a minimum or low volatility approach to equities. So your equities are actually the low volatility stocks as opposed to buying all the stocks or um it has the low volatility series and then a few do a little bit more creative have some active stock selection in there and active bond selection in there but the whole idea is to have a core risk appropriate portfolio and the idea is there we can quantify historic data so we know what's our expected return what's our range of returns
00:19:51
Speaker
and how has it performed through several decades. And so that gives us a pretty good foundation. But I think it's also important that satellite piece to add that to customize around your core portfolio.
00:20:05
Speaker
Yeah, I mean, we always start with that risk profile questionnaire. And then for our clients that are listening, we use our partnership with Brookstone to bounce off ideas after we have that risk profile questionnaire and our notes from our client data gathering session. And we see which core portfolio is going to be the most appropriate for you.
00:20:26
Speaker
But then we can always make changes over time as your goals changes and your risk tolerance changes. Because everyone always wants to make the most possible with the least risk, right? But we have to talk about if we're going to have the opportunity to make the most possible, you are going to have added risk in that.
00:20:45
Speaker
Yeah, definitely. And I would say on the risk profile and when you you answer the different risk questions, kind of it's trying to give gauge your willingness and ability to so assume portfolio risk.
00:20:56
Speaker
There are two risks. Most of it focuses around volatility, which is one, how much it goes up and down and gyrate. The stock market is more volatile than the mo bond market, for example. So more conservative, you usually go towards a little bit more bonds.
00:21:11
Speaker
than stocks. However, the second component of risk is the inflation risk. Now, for years, i would say this, but, yeah you know, it didn't always connect until you have kind of that bout of inflation over the last few years that we saw where, ah you know, inflation is the general rise in prices. So it rises and rises.
00:21:33
Speaker
over time. so in So volatility is a short-term risk. It kind of dissipates over time. Whatever the market was concerned about you know three years ago or 18 months ago, it's concerned about something different now.
00:21:47
Speaker
That volatility has ah faded. However, the inflation risk continues and is the long-term risk. So I think you want to balance the two. And the reason to put together an investment portfolio is to preserve your purchasing power over time and grow that purchasing power over time.
00:22:02
Speaker
And that's really talking about inflation and making sure you're ah keeping up with inflation. If you look back over the last 20 years, um and the price of college education has steadily gone up, has inflated.
00:22:16
Speaker
Healthcare care services, ah cars have definitely doubled in in price over that time. Houses But the S&P 500, despite going through a global financial crisis, a global pandemic during that time period, being volatile, has outperformed each of those inflation metrics over time. So you are rewarded over time. But what we want to do is make sure we scale ah the risk or your exposure to those assets are appropriate given your risk profile.
00:22:45
Speaker
Yeah, absolutely. Now, so that's the core portfolio. Now I want to get into what I think is the really exciting stuff. And I think our clients would agree is really exciting as well. Let's talk about a couple of the satellite strategies ah that, in my opinion, really does set apart our firm and our partnership with Brookstone from a lot of other advisors. Yeah.
00:23:07
Speaker
ah The first one that we've had great success with and we have been incorporating into a lot of clients' portfolios is the stock baskets. Talk to me a little bit about the dividend growth value stock baskets.
00:23:22
Speaker
ah Sure. What we found was a number of clients liked seeing some of the individual stocks in the portfolio. You'd like to see NVIDIA and Apple, Microsoft, Amazon in the portfolio. And sometimes you don't see that in the portfolio. And if you're in an ETF or a mutual fund, it's kind of.
00:23:39
Speaker
just these broad baskets, what what we tried to do was make them a little more specific to add a sleeve of stocks to complement the core portfolio, which was a little more diversified.
00:23:50
Speaker
And now we have targeted exposure to if it's the growth stock basket. Yes, you see a number of ah tech stocks and popular tech stocks is now comprising your portfolio with a dedicated sleeve or allocation to that.
00:24:04
Speaker
And then the same with the dividend stock basket. People forget in times like this how important and how beneficial dividend stocks can be because one, they pay a cash dividend to their shareholders and that's determined by the board of directors. It's not determined by the market. So as long as the company is doing well, it continues to pay that dividend over time.
00:24:24
Speaker
And just as importantly, it raises that dividend to shareholders over time. So one of the screens we put on is the likelihood that the company will raise in dollar terms the payment to shareholders over time.
00:24:36
Speaker
So if you think about investing in a bond 10 years ago and it's a 10-year bond, well, you just get a steady payout over 10 years. Well, if it's a dividend stock that increases its payout, your dollar amount would double over that 10 years if it's growing at about 7%.
00:24:51
Speaker
annually, which is a pretty good estimate somewhere in there. So your dollar amount increases over time. And then you have the potential for price appreciation with those dividend stocks. They're also usually familiar names.
00:25:03
Speaker
So if you go through kind of these tough times in markets where you have a broad sell off, well, you you you know the names Procter and Gamble and Clorox and Kellogg's and so forth, just similar consumer brand names along with some utility names.
00:25:18
Speaker
that you know they can go out of favor relative to tech stocks, but tech stocks also sell off very hard and then all of a sudden the um the more conservative dividend paying names become popular. So they play a pretty key role both in current income and then also growing that income over time.
00:25:35
Speaker
And I think I watched a past episode where you would call that the running back of yes so portfolio construction. Yes, absolutely. Yeah, yeah and the growth stocks would be the wide receivers. And we know that a lot of times you overpay for wide receivers.
00:25:51
Speaker
You do. Yeah, I mean, i think the dividend stock basket is a real winner because we can reinvest them and make sure that we're continuing our dollar cost averaging over time and and some more moderate growth.
00:26:07
Speaker
But how is it more beneficial for a client to invest in one of these baskets than to just individually pick these stocks on their own?
00:26:18
Speaker
So the overall basket we review kind of as ah an investment firm, we use a couple of different rating agencies to provide um price to fair value estimates and then kind of have a secondary source to help with the timing of those selections. They use a quantitative method not to throw jargon but that's really the process. In other words, it's kind of a defined process that we go through to select those stocks that comprise the, but whether it's the dividend stock basket or or the growth stock basket, and then ah can constantly monitor and refine those strategies. And so we have, you know, we'll change out a few names here and there. The dividend stock basket, those stocks kind of hold for a little bit longer period of time.
00:27:01
Speaker
and when you invest in them they're usually out of favor because that's when the opportunity presents itself and then with the growth stock basket you're really looking at um the different growth numbers and making sure you have broad exposure to those different um kind of hot areas so it's definitely different uh methodology but kind of going back to it where they we don't lose sight of the stocks and then make decisive decisions because what i've seen previously is it gets hard to manage a portfolio when it gets hard there are moments when it's easy when things are going up it looks very easy but then there are kind of these moments in between where well the market could sell off the stock doesn't respond
00:27:41
Speaker
How do you approach that? And so having a sell discipline, um being able to swap out of that and kind of an unemotional sell discipline is, I think, beneficial over time.
00:27:52
Speaker
Yeah, I have always said that having an advisor involved takes the emotion or at least some of the emotion out of investing, which will make you more money in the long run. Yeah. Definitely. That process in place and that repeatable plot process, I think is important to have. during the i go back, ah you know as you mentioned, I go back a while in the industry. And so if you go back to the global financial crisis, ah stocks were selling off to the point where they were very cheap, but it would be but you could get very emotional about it as well because you were in the midst of a major sell-off. And this happens every decline where
00:28:31
Speaker
you know, at first it's denial and then it gets so bad that it gets painful. But if you're trying to take in an unemotional approach and kind of just follow what you think the discipline ah is, you'll find that those are actual values and then you can go in and and buy at those levels, for example, even though no one wants to buy it at that moment. So to your point, it is advantageous going through these cycles of ups and downs to maintaining maintaining your discipline.
00:29:00
Speaker
Now, talk to me a little bit about buffered ETFs because I feel like they're gaining some buzz in the industry right now and could be a good solution for those that can't stomach as much risk.
Innovative Investment Solutions
00:29:13
Speaker
Yeah, definitely. This has been a a great area, great kind of innovation that we had been monitoring for about two years. They're called buffered ETFs, exchange traded funds. So they trade all day um like ah like a stock.
00:29:28
Speaker
But what they have is they'll give you upside participation in the S&P 500 or the NASDAQ, any kind of broad based index up to a cap level.
00:29:39
Speaker
So you you max out your return and they tell you ahead of time. This is over a one year period. But the important part is they provide downside protection, hence the term buffer.
00:29:50
Speaker
So a lot of these come out and theyd they buffer over a one year time period, the first 9% of the downside or the first 15% of the decline in the index over one year. So if you're to hold from ah for one year time period,
00:30:05
Speaker
and the market was down 16% else being equal you'd be down 1% so it really provides a nice hedge on that downside and then on the upside they'll tell you the cap and let's say it's 12 or 15% well if the market's up 20 you're up 12 or 15 whatever the cap happens to be But nobody gets upset when they're up ah double digits in that type of scenario.
00:30:30
Speaker
And so I think it gives you plenty of upside. and You're directionally in line with the markets while providing that nice buffer on the downside. And so we've seen these grow in popularity and exposure. They're relatively new. So five years ago, you really didn't hear this term buffer ETF.
00:30:50
Speaker
And so as we went through the ah the global pandemic and the shutdown and kind of markets sold off. we were monitoring these vehicles, which were, had very little in assets when we're just starting out.
00:31:02
Speaker
They performed very well. And so it gave us our real time stress test, if you will, to say, yes, these vehicles are, are kind of, institutional quality.
00:31:13
Speaker
They do what they say they're going to do. Sometimes I get asked what's a good or bad investment. I would say it's, you know, there's, that's not the right term because um it's really looking at it. Does it do what it says it's going to do?
00:31:26
Speaker
And that's how you can at least incorporate because there are times when a bad investment could could actually look good because the price is down so much and he's saying and vice versa a good investment might be way overpriced and it's actually a bad opportunity so it's really looking at what's appropriate in a portfolio um and so buffered etfs give that defined upside and defined downside very unique in the industry. And so they've grown um because of providing that hedged equity like exposure. And so these, i yeah, I'd encourage continued. If you haven't seen these, definitely reach out to Marissa and and look through these because I think they're a great ah great tool for the advisor and client's toolbox.
00:32:17
Speaker
Yeah, I think it's a brilliant strategy. And what is the liquidity with a buffered ETF? Is it a one-year term? How does that work? So it's actually daily liquidity where you can trade daily. The terms come out. They have ETFs listed for each month. So there's a January, February, March. And they their terms in terms of the outcome, the upside cap, and the downside buffer are for that one-year period.
00:32:43
Speaker
But during that one year, you could trade them. And so what we do is actually monitor how much downside protection is left. So let's say you're six months in.
00:32:55
Speaker
Well, it has moved around because markets have moved around. So we look at, well, how much downside protection remains, how much upside opportunities remaining. And then we try to optimize that. So we look over the 12 month series and say, well, these are the four or five best months that have the the best protection levels and the most upside remaining. And then we just rebalance from there, kind of doing that on a monthly basis.
00:33:21
Speaker
And so there is a little bit of art to that, but the terms are for one year when you look at it. So there's a little bit more detail to it, but I would say overall, if you think about having a hedged equity exposure, I think it makes a lot of sense. And buffered ETFs are one of the ways I think you can gain ah good access in client portfolios.
00:33:39
Speaker
Yeah, I think it's great. It's a great strategy, a satellite strategy for those that want a little bit more risk protection or risk mitigation. Of course, it's not Totally protected from risk.
00:33:53
Speaker
But having that buffer in there could certainly make some clients feel more at ease. So that's what we found. Definitely. The last satellite strategy I want to speak to you about, and of course there's Plenty more. We could do a whole other episode on all the other strategies.
00:34:11
Speaker
But something that I've been speaking to my clients about recently and I have been approached about a lot from clients recently is the cryptocurrency strategy and particularly Brookstone's crypto strategy. Sure. So this is an ah interesting space in the sense that there's a lot of different news out there about what what are digital assets, let's use that term broadly, or cryptocurrencies.
00:34:37
Speaker
And so there are many different cryptocurrencies available um that are in kind of the digital wallet world. So that's a wallet hosted separately than a traditional account.
00:34:51
Speaker
and it has different w risk layers to it um what we have are what are now in etf format so a familiar kind of proven investment vehicle exposure to the top two generally is bitcoin and ethereum so bitcoin was the original cryptocurrency that started the entire ah kind of phase. So that was 2009, essentially, when Bitcoin was launched. what Was it that long ago?
00:35:21
Speaker
Yeah. Yes. And it kind of slowly kind of grew. It was not worth very much. you couldn't It was very unique on how you could trade it. It was really for techies or um hobbyists in that world, if you will, as opposed to kind of an investment and that you could make in a ah portfolio because it's very small.
00:35:40
Speaker
And so it was created by an anonymous creator called named Satoshi Nakamoto. No one knows who the creator is, but what it was was a computer code that solved the double spend po problem, also known as known as the Byzantine Generals problem in computer science, which was, well, you can make a digital copy out of anything. How do I know this is just the one...
00:36:00
Speaker
ah one issuance. So and anyway, computer science, he solved that. And then the economic view was that, oh, this is kind of a digital gold, if you will, because there's a limited supply. There's 21 million Bitcoin that's going to be issued.
00:36:17
Speaker
um And every four years, the amount of Bitcoin that's issued drops in ah in half. And so those are called rewards that you get. So really the the value proposition of Bitcoin is it's ah like a digital gold where you have limited supply over time. You kind of have a defined supply over time, how much will be released and so forth.
00:36:42
Speaker
Instead of being a physical ah attribute like gold, or have those properties, it's completely digital. So if you see pictures of kind of a bee and a coin, there actually is no, there are no coins. It's just a digital ah ah asset.
00:36:58
Speaker
um And then Ethereum is the second largest. That one was created a few years later to try to do some things that Bitcoin did not do and be a little bit more flexible in terms of its its use case.
00:37:12
Speaker
and so so those are the two largest bitcoins over two trillion in assets and i think ethereum's probably around uh half a trillion so they're they're sizable and the way we do it is we use the etfs exchange traded funds now those were just approved uh less than a year ago in that format we had actually invested in or gave access a few years back, maybe four years back to similar ah vehicles that we thought were going to get full ETF access, which means they hold Bitcoin similar to the gold exchange traded fund, which owns gold and just holds that asset.
00:37:52
Speaker
And so that it owns Bitcoin, then it owns Ethereum. We have multiple ETFs that do that. And then also include and ETF that basically is the picks and shovels of Bitcoin, kind of the firms that work inside that that industry as well. So i have pretty good broad based exposure in terms of our overall allocation. So a lot of people have a lot of different opinions on cryptocurrency.
00:38:15
Speaker
And what we're really saying is that. yeah It is more volatile. It's a nascent technology in a sense. um But if you want access, there' we have put together a turnkey strategy that would incorporate and give you exposure to that broad industry.
00:38:31
Speaker
Yeah, I mean, it's a great strategy just the way people have been using gold and silver ETFs to gain exposure to that asset class. We can use this Brookstone crypto strategy to have ETF exposure to these funds without actually having to buy Bitcoin or buying Ethereum. Correct. because It takes away some of the risks. some Some people think the risk is specifically in Bitcoin or Ethereum, but it's really been in the custodians of the digital wallet space and on top of it. Here, you're custodying that it's in in a traditional account.
00:39:10
Speaker
ETF format as full oversight and so forth. So it takes away some of the risks that have occurred in that industry over the last several years. And so I think that's the is the right vehicle for most investors that wanted ah piece in the portfolio.
00:39:27
Speaker
So those are just a couple of the satellite strategies that our clients have access to thanks to our partnership with Brookstone. Now, Mark, is there anything else you wanted to add or if advisors, independent advisors throughout the country want to get in touch with Brookstone and have a partnership similar to the one that us at Union Financial have with you, how can they get in touch with Brookstone? Sure, I'd just say just to wrap up, I know there'll always be headlines and we're trying to invest beyond the headlines and also incorporate a lot of these new ah or bespoke strategies that we think play a role in overall portfolios. So it's definitely not the end to to what I think the roster will look like, but we always have our our eyes open to to add new strategies as appropriate and be where the client is and where the investment themes are.
00:40:16
Speaker
and then if anyone wants to get a hold of us and we for individual clients we work directly with advisors so we're dedicated advisor shop and obviously reach out to marissa and then any independent advisors it's brookstonecm.com marissa cm dot com marisa Thank you.
00:40:35
Speaker
Thank you so much, Mark. It was a true honor having you on today. I continue learning from Brookstone and your team every day, and it helps me be a better advisor for my clients.
00:40:46
Speaker
And for everyone watching, thank you for tuning into this episode. I hope you learned some key market insights and some strategies that you might want to take into 2026. I'm your host, Marissa Wood, with Union Financial Services, and we look forward to helping you live a better financial future.
00:41:06
Speaker
Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment advisor. BCM and Union Financial Services are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
00:41:21
Speaker
The opinions expressed by Marissa Wood and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Investments involve risk and otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. This program is designed to provide accurate and authoritative information with regard to subject covered. Indexed or fixed index annuities are not designed for short-term investments and may be subject to caps, restrictions, fees, and surrender charge as described in the annuity contract.
00:42:17
Speaker
Guarantees are backed by the financial strength and claims paying ability of the insurer. Please refer to our firm brochure, the ADV 2A, item 4, for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products.
00:42:36
Speaker
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