Welcome to the November edition of Top of Mind!
One trillion. It’s a big number! So big that it’s hard to wrap one’s head around.
One million dollar bills stacked would be as tall as a building. One trillion bills stacked would circle the Earth nearly three times.
Maybe that’s why, in an economy marked by one trillion–dollar milestone after another, the stock market keeps surprising investors. The sheer scale of what’s happening makes it hard to develop any intuitive feel for it.
This month, we’re looking at an economy measured in trillions and what that means for your portfolio.
1. The Trillion-Dollar Payday
In the 1800s, John Jacob Astor became America’s first millionaire. Last century, Rockefeller became its first billionaire. Now, Elon Musk has inked a deal that could deliver a trillion-dollar payday.
It puts a spotlight on what some call a “K-shaped” economy: top earners are soaring while others fall behind. According to the Federal Reserve, the top 10% of Americans hold two-thirds of the nation’s wealth. That means a small minority of spenders now carries an outsized share of economic and market impact.
Meanwhile, the bottom 50% of households control just 2% of the wealth. The old observation that “Wall Street is not Main Street” has never been truer. Don’t expect the stock market to reflect the national mood like it once did.
2. Trillions Per Second
The top-end chips powering AI can now perform hundreds of trillions of operations per second, something that would take a single human hundreds of millions of years.
Put differently: these chips make what once seemed impossible seem not only possible, but routine.
The eventual implications for things like drug discovery, materials science, legal research — and yes, even us as your financial advisor — are profound. It’s clear the economy has only scratched the surface of what this level of computation will unlock.
3. The Trillion-Dollar Buildout
A recent Wall Street report projects that AI-related infrastructure spending could reach $5 trillion in the coming years. That includes chips, data centers, and power plants.
And that’s not just in the U.S. According to The Economist, China can now produce a trillion watts of renewable energy per year, equivalent to about 300 nuclear power plants, with much of it aimed at AI.
This is why some have taken to calling the AI buildout an “Arms Race.” The U.S. and China are competing for AI supremacy, knowing that winning the race could mean military and economic superiority. In that world, it’s riskier for countries not to spend on AI than to overspend. That dynamic could keep the investment flowing.
4. Trillion-Dollar Companies
A major U.S. tech company recently reached a $5 trillion market capitalization. For perspective, the largest company just ten years ago was valued at roughly $650 billion.
It reveals a new dynamic among today’s tech giants. In the past, we might have worried more about when “gravity” would pull Big Tech back to earth.
But maybe that’s not the right question anymore.
Maybe these companies have become so large that they’ve created their own gravitational fields, pulling entire industries into their orbit. Instead of weighing them down, their size might be making the rest of the economy revolve around them.
We say “maybe” because the new world of Technology is uncertain. The key point is to be open-minded about the outlook.
5. The Trillion-Dollar Buyback
According to Bloomberg, U.S. companies bought back more than $1 trillion in stock this year—and that’s just through August 2025.
That is an extraordinary amount of built-in buying pressure under the market. Add in the steady flow of contributions from millions of 401(k) participants, and the “background” level of buying in the stock market is stronger than many realize.
6. Trillions of Debt
No, we didn’t forget the trillions in U.S. government deficits! Over the decades we’ve worked with clients, this has always been a major concern. And we agree: it is a major concern!
But so far, the risks haven’t shown up in the way many expected (through a decline in the stock market). Instead, they’ve shown up through higher inflation.
It appears — and this is just our sense! — that the Federal Reserve may now be willing to tolerate a higher rate of inflation than in the past, largely because “inflating our way out” of the debt may be the most realistic path forward.
Thus, if you’re worried about the government’s debt burden, the answer isn’t to sell your stocks. It’s to keep your assets invested so you can grow your purchasing power in the face of persistent inflation.
What’s the takeaway?
Not to change our investing approach! We’ll remain diversified, mindful of valuations, and focused on the long term.
But all of these trillions point to something important: In an economy this large and changing this rapidly, we think it pays to stay open-minded and not sell the future short.
There may be a risk in thinking too small.
Thanks for reading this month’s Top of Mind! We'll write again next month. Until then, we hope you and yours have a wonderful Thanksgiving.
Sincerely,
Kurt, Cassidy, Ken, Teresa, Brian and Jacque