Time to Get Serious About Protecting Your Portfolio
I take my role as your publisher seriously. Now more than ever.
When market conditions shift … risks build beneath the surface … and the headlines don’t tell the full story …
It’s my job to give it to you straight.
So here it is:
The market you’re facing in early 2026 is not the same one we left behind in 2025.
Beneath the surface, critical signals are flashing.
Quiet moves at the Federal Reserve. Cracks in the most beloved corners of Wall Street. Gold at all-time highs and marching higher.
If you’re still positioned for interest-rate cuts and a smooth rally, I believe you could be caught flat-footed. Perhaps sooner rather than later.
This note is your warning — and your roadmap.
Let’s get into it.
Things Are Already Changing
For most of 2025, investors clung to one dominant hope.
That is, that the Fed would unleash a wave of interest-rate cuts and kickstart a fresh bull market.
That hope is now running into the brick wall of reality.
The Fed hasn’t pivoted because it can’t — at least, not yet.
But it is moving quietly behind the scenes to prevent a liquidity-driven financial crisis.
Let me walk you through what’s happening and how to protect yourself.
The Fed’s Dilemma: Inflation Up, Jobs Down
The Federal Open Market Committee entered 2026 with its hands tied.
Despite a year of pressure from investors for multiple rate cuts, the latest projections show the Fed planning just one cut this year — far fewer than the 3–4 that Wall Street priced in.
Why? Two competing realities.
On one side: Inflation remains sticky.
Tariffs enacted in 2025 have yet to fully filter through the economy. And Fed governors have publicly stated they’re waiting for a Supreme Court ruling on their legality before they commit to policy shifts.
Meanwhile, GDP numbers surprised to the upside. The Fed’s latest forecast shows stronger-than-expected economic growth into mid-2026. That makes it politically and economically difficult to justify a major rate-cut cycle.
But flip the coin, and you’ll see signs of real economic softening.
On the other side: Labor market data is breaking down.
The BLS JOLTS report shows fewer job openings. Meanwhile, unemployment has ticked higher.
The Fed has acknowledged these concerns — and it’s why some form of easing may come this year. Perhaps when Jerome Powell is no longer Fed Chair, as his term is set to end in May.
Powell can remain on the Board of Governors until January 2028. But he may follow in other Fed chairs’ footsteps and step down when his chairmanship ends.
Whether that’s May or sooner, if President Trump gets his way.
So, we’re left with an environment of growing uncertainty.
The Fed is stuck between inflation concerns and labor weakness.
At the same time, investors are stuck waiting for clarity that may never come.
Behind the Curtain: The Fed’s ‘Stealth’ Liquidity Injections
While the headlines continue to focus on rates, the real story lies beneath the surface.
In late 2025 and early 2026, the Fed began quietly pumping tens of billions of dollars into the banking system using its Standing Repo Facility (SRF) and open market operations (OMOs).
These actions mirror the playbook used during the COVID crash of 2020 — when liquidity vanished and the Fed was forced to step in aggressively.
Let’s break down what’s happening:
-
Overnight Repo Operations: The Fed lends cash to banks in exchange for Treasurys or other securities.
This provides instant liquidity — and it’s now happening at a record pace.
-
Unlimited Access: In December 2025, the Fed removed the cap on how much banks could borrow via overnight repos.
That’s a flashing red signal that something isn’t functioning correctly in private funding markets.
- Emergency Backstop: This isn’t a policy pivot. It’s a protective measure to avoid a funding freeze — the kind that caused systemic stress in 2008 and again in 2020.
Why it matters:
When banks start using the Fed as their primary funding source — instead of borrowing from each other — it’s a clear sign of risk aversion and tightening liquidity.
That’s not a bullish environment for stocks.
The $74.6 Billion Wake-Up Call
On Dec. 31, 2025, the Fed’s SRF saw a record-setting $74.6 billion in overnight borrowing.
That’s not normal end-of-year window-dressing — that’s crisis-mode behavior from the institutions that keep markets functioning.
And here’s what’s critical: This surge happened while the Fed is still officially in a tightening stance.
That contradiction — injecting liquidity while holding rates high — sends mixed signals to the market.
It also undermines the Fed’s credibility.
And it creates instability across asset classes.
This is a repeat of the pattern we saw in early 2020.
And if there’s one thing you learn in this game, it’s that liquidity stress often precedes broader asset repricing.
The Cracks Are Starting to Show
Beyond the Fed’s actions, we’re already seeing early signs of stress in the sectors that matter most.
Take financials.
Weiss Ratings Plus data shows the Financial SPDR (XLF) and the Regional Banking SPDR (KRE) carry an average Weiss “C” rating — a level that reflects rising risk and declining stability.
This is no small detail.
Regional banks, in particular, are more exposed to liquidity constraints and commercial real estate risks.
When these institutions struggle, the impact ripples out to housing, small business lending and consumer confidence.
Meanwhile, the Magnificent Seven stocks — the over-owned titans propping up the S&P 500 — are starting to stall.
These seven stocks make up nearly 30% of the S&P 500’s total weight.
Yet, since Oct. 1, 2025, they’ve averaged just 2% in gains. More than half underperformed the index itself.
If the most beloved and heaviest-weighted stocks can’t lead, the index will struggle.
And investors who are overweight mega-cap tech may be in for a surprise correction.
The Market’s Setup for a Q1 Repricing
Put it all together — the Fed’s liquidity injections, softening labor market, sticky inflation, struggling financials and underperforming tech — and you get a setup that is not conducive to a strong Q1 for equities.
Keep in mind that investors hate uncertainty and volatility … it looks like both are setting to rear their heads in the first quarter.
This isn’t a call for panic. It’s a call for preparation.
If you’re sitting on a heavily growth-weighted portfolio, or still hoping for a Fed-fueled rally, it’s time to recalibrate.
I’m raising the probability of a market correction in Q1 2026.
And I believe smart investors should begin taking subtle defensive steps now — before headlines start catching up.
As always, use the tools available to you through your Weiss Ratings Plus access. (Like the brand-new one I’ll reveal later in this issue.)
I personally find it revealing and helpful to check my portfolio against the latest Weiss Ratings, a step easily done with our ratings tool. (Start here.)
The One Thing That Hasn’t Changed: Hard Assets
Through all this chaos, one area of the market continues to do exactly what it’s supposed to: hard assets.
Gold and silver just posted their best year since 2020, outpacing nearly every major equity index.
The iShares Silver Trust (SLV) surged over 150% in 2025. Gold followed closely, backed by record central bank demand and rising geopolitical tension.
These aren’t just commodities anymore …
They’re monetary hedges in a world where trust in central banks is fading and inflation remains sticky.
And they’re outperforming because capital is rotating into assets with intrinsic, physical value.
As I’ve said before: If it hurts when you drop it on your foot, it’s probably going to outperform the S&P 500 in 2026.
That means hard metals, critical minerals, rare earths and even uranium stocks — assets backed by global demand, not central bank policy.
The Approach Moving Forward
In our next update, I’ll walk through specific tickers and trade setups I’m tracking for this rotation into hard assets. But for now, here are a few principles I’m following:
- Rebalance Out of Fragile Growth: If you’re overweight the Mag 7 or highly speculative tech, consider reducing exposure — especially if those stocks are breaking below their 50-day moving averages.
- Watch Liquidity-Sensitive Sectors: Regional banks, small caps and housing are canaries in the coal mine.
- Increase Allocation to Physical Asset Plays: Think silver (SLV, SILJ), gold (GLD, GDX), uranium (URA, CCJ) and rare earth producers (MP, UUUU).
Above all else, this is not the time to be complacent.
The environment that carried markets through 2025 has changed — and the signals are flashing now, not later.
In a moment, I'll give you the stocks our system says you shouldn't wait to dump.
Stay vigilant, stay tactical and remember that hard assets don’t lie.
Numbers don’t lie, either.
We have 100+ years’ worth of carefully collected data. Our financial database, at 10+ terabytes, may be one of the largest in the world.
This data gives us a very good idea of which stocks are set to crack first … or, as it happens, crack further.
That makes this the ideal time to introduce you to your newest Weiss Ratings release …
10 Popular Stocks to Avoid Like the Plague
You have several Special Screeners and Special Reports that deliver real-time results — with just one click !
These stock lists refresh with new data every day …
And you get at least one new tool in your Ratings Plus toolkit every month.
This month’s new release comes straight to you from Dr. Martin Weiss himself.
Before I give it to you, here’s some background.
Just a few hours ago, we sent out a press release with data that came straight from our Weiss stock ratings.
From the press release:
In its report issued today, “How Wall Street Ratings Help Cause Historic Investor Losses,” Weiss documents how most stock ratings have historically magnified investor losses during market declines since 2000.
I encourage you to read the report at your earliest convenience.
But first, if you’re wondering where those stocks to sell right now came from …
Those stocks came straight from YOUR newest release …
“Sell Alert: 10 Popular Stocks You Should Avoid Like the Plague”
This special report is available exclusively to Ratings Plus members.
Not only can the results change any day that the market is open …
They could very well change EVERY day.
And all it takes is one click to find out.
Here is today’s list of 10 popular stocks you should avoid like the plague.
Intel. Boeing. HDFC Bank. CrowdStrike. BP. UPS. Snowflake. Warner Bros. Discovery. Cloudflare. Rocket Companies.
These are well-known, widely held stocks. The kind many investors trust simply because of their brand recognition.
But their data shows clear signs of declining fundamentals, poor financial strength and growing downside risk.
Just look at cybersecurity company CrowdStrike, for example.
You can go to your “Sell Alert: 10 Popular Stocks You Should Avoid Like the Plague” report to see all this data.
Only Ratings Plus members can do that.
PLUS, only Ratings Plus members can see each stock’s:
- Rating History (here’s CRWD’s)
- Rating Factors (here’s why CRWD earns that D rating)
- And much more.
After taking a closer look at CRWD … or any of the other nine stocks on this list … I think you’ll agree when I say this:
If you own any of them, you may want to consider selling them today.
And be sure to bookmark this “Sell Alert” report.
That’s because you can generate your own fresh list of “10 Popular Stocks You Should Avoid Like the Plague” on demand … anytime you want it.
As I said earlier, it’s time to get defensive in front of a possible Q1 market repricing or correction.
And thanks to Dr. Weiss, this “Sell Alert” list gives you a great starting place to do just that.
To your success,
Dallas Brown
Publisher
