Episode summary
"We're Worried About 2027" - Stocks To Plunge 30%? | Chance Finucane @OxbowAdvisors
Thoughtful Money
· · Hosts: Wolf Richter, Adam · Guests: Chance Finucane
Summary
Chance Finucane argues that Oxbow is positioning for a more difficult market into 2027, with special concern that the first half of that year could bring a slowdown in both economic growth and inflation that has historically been rough for stocks, especially cyclical names and tech. He says the firm would not be surprised by a 30% or larger market decline and is therefore emphasizing risk control, lower activity, and a cautious allocation profile rather than chasing the market’s strongest themes.
Oxbow remains largely underweight AI beneficiaries because the firm считает the prices too rich and the downside too large, though it does keep a few small positions such as Texas Instruments, ASML, Fortinet, and Zoom. Capital is being shifted toward reasonably valued sectors like energy, healthcare, select real estate services, and a few high-quality banks, while fixed income is being kept mostly short duration, with 2- to 3-year Treasuries around the 5% range seen as attractive.
Finucane also says Oxbow is actively trimming and adding within commodities. Precious metals and energy remain favored, but the firm is reducing the more volatile parts of those sleeves after strong runs, while keeping core holdings like bullion, pipelines, and other higher-quality businesses.
Key takeaways
- Finucane says Oxbow is worried that the first half of 2027 could be a bad setup for stocks because growth and inflation may both slow at the same time.
- He says AI beneficiaries make up only a little over 2% of the stock portfolio because the upside is crowded and the downside in semis could be about 50%.
- Oxbow is favoring energy, healthcare, real estate services, and select banks over expensive AI names, while keeping more of the portfolio in non-AI businesses.
- The firm is sticking mostly to short-duration Treasuries and sees 2- to 3-year government bonds near 5% as a strong low-risk base return.
- In precious metals and energy, Oxbow is actively trimming the most volatile names while keeping core holdings such as bullion and pipelines.
- Finucane says higher short-term yields make wealth preservation easier because clients can earn about 4% to 5% with little downside risk.
Notable quotes
“I think we're pretty concerned about 2027. Uh especially I mean data we have uh that we use directionally to try and map out where things could go”
“For us, we just think the prices that you have to pay for the AI beneficiaries is too high. The downside is too steep”
“We have not gone further out than three years, though. And I think that goes back to our view that since 2020, we're now in a new era where yields are going to be rising”
“The only growth in construction spending there's more than 70% annual growth in data centers”
How the episode opens
I think we're pretty concerned about 2027. Uh especially I mean data we have uh that we use directionally to try and map out where things could go uh really only looks out maybe the first 8 months or so of 2027 so far, but looks pretty concerning to us and that's just risk that we need to be managed and be ready for. uh there's a good chance that could provide an opportunity for us uh in the back half of next year to get some good buys, but you got to get through the storm first and it's hard to say how long that will last and how deep it will go.
But this is one that I don't think we would be surprised if it the stock market went down 30% or more. Uh and we want to make sure that we are allocated properly heading into that. Welcome to Thoughtful Money.
I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you here for a discussion with Chance Finukan of Oxbow Advisors. They've just issued their uh Q4 outlook.
We're going to be diving deeply into that with with Chance today. Um this is not personal financial advice. I just need to divulge for compliance reasons.
I am a client of Oxbow Adviser Oxbow Advisors. That is not the reason that you should become one with them. I just want to make that really clear.
Um, but like I said, I got to be transparent with you guys about where I park at least part of my money. Um, Chance, thanks so much for joining us today. So, um, it's been an interesting uh it's been an interesting quarter since the last time you were on the channel.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- 2027 market outlook
- bear market risk
- ai stocks allocation
- bond yields and fixed income
- precious metals
Companies and tickers mentioned
- RACE
- Oxbow Advisors
- Ferrari
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Thoughtful Money, this episode and its artwork belong to Adam Taggart | Thoughtful Money. Octagon is not affiliated with the show; this page is an independent summary.
