From The Advisor’s Fuel Podcast with Adam Koós, CFP®, CMT®, CEPA — a quarterly, rules-based market conversation with John Kosar, CMT, and Jack Kosar of Asbury Research.
Every time something happens on financial TV, the chyron reads “markets in turmoil.” There’s always something wrong — because fear is what keeps people watching.
Advisors need to cut through that noise, understand what’s really happening beneath the surface of the market, and — just as important — know how to explain it to clients in a way that actually talks them off the ledge. That’s the entire purpose of this quarterly, rules-based conversation with the team at Asbury Research. Here’s what the data was saying, and how to translate it for the people across your conference table.
Looking under the hood, yes — for now. The right parts of the market have been leading: the Nasdaq outperforming, semiconductors dramatically strong (the SOX has roughly doubled the S&P 500’s performance over the trailing year), and the mega-cap AI names setting fresh highs. When the strongest, most economically connected areas are the ones leading, that’s a healthier tape than the “markets in turmoil” narrative suggests.
The advantage of watching data instead of the financial networks is exactly this: the networks are paid to make you feel like something urgent demands your attention at all times. The data just tells you where the money is going.
The honest answer: there are parallels, but important differences.
In 1999, many of the high-flyers were little more than a nice website with no underlying business model. Today’s leaders — especially the largest — carry real capital expenditure, real revenue, and real substance. That doesn’t prove it isn’t a bubble; plenty of serious economists argue the AI spend needs an entirely new industry to open up to justify it. But booms and busts are how a healthy economy is supposed to work: money floods into an exciting theme, Darwin takes over, the winners are selected, the losers go home, and the market moves forward a little stronger. If there’s a bubble, that process is a feature, not a bug.
This is where advisors can add real value, because the popular narrative gets it half wrong.
There’s a recurring story that a narrow market — a handful of names doing the heavy lifting — means the market is fragile. Goldman flagged breadth as among the narrowest readings since the dot-com era. But that framing is news-based, not rules-based, and it scares people into bad decisions.
The Asbury team’s approach flips it into a tool. Rather than fear the “Magnificent 7,” they run a relative-performance chart of those names against the S&P 500. Because that group is such a large slice of the index, its relative strength becomes a directional signal for the whole market — it helps you stay on the right side of the trend. The name may be tiresome, but as a statistical instrument it’s genuinely useful.
The core philosophy here is simple: money is the boss. There are other influences — interest rates, politics, trade, inflation — but if you can track where money is actually flowing in a comprehensive way, you don’t have to forecast what will happen six or nine months out. You just have to be where the money is and stay nimble enough to move when it changes its mind.
A telling real-world signal from the conversation: asset flows into the 11 sector ETFs were at all-time highs and still rising. So despite all the surface-level fear, people were still putting money into equities. As the Kosars put it, the client behavior itself is a sentiment indicator — when clients keep calling to increase risk even while saying they’re worried about a correction, the fear of missing the upside is what keeps the money invested and the trend intact.
The distinction matters. Every crash starts with a correction, and every correction starts with a pullback. The S&P is a mean-reverting animal; historically it always pulls back toward normal at some point. So could there be a correction in the next couple of years? History says yes. When? Nobody knows — which is precisely why you need a rules-based process rather than a prediction.
Adam raises a point he’s made before: to have truly lived through a grueling, “rip-your-face-off” market crash as an investor who felt it in real dollars, you basically have to be in your mid-40s. It’s been since 2008–09 since we’ve seen anything like the dot-com collapse or the 57%+ drawdown of 2007–09. A COVID-style flash crash and the 2022 drawdown don’t quite count. That means a whole generation of investors — and advisors — hasn’t experienced the real thing and needs to be prepared for it.
Asbury’s own 2022 results make the case for defense concretely: while their sector-rotation benchmark fell in line with a rough year, a blend with their correction-protection model finished up — largely by rotating into energy early in the year and sitting in T-bills on the risk-off side — outperforming a badly falling market by a wide margin. The point isn’t the specific numbers; it’s that you don’t have to stay fully invested through a decline, and there are tested ways to avoid it.
The team’s advice for advisors sitting across from anxious clients came down to a few durable ideas:
That last point is the whole game. Clients don’t need you to predict the future. They need to know you’re paying attention and that you have a plan for when — not if — things get chaotic.
If you want tested frameworks and ready-made talking points for exactly these client conversations — plus the systems to grow your practice while you’re at it:
Want to go deeper on rules-based risk management? See our conversation with Vincent Randazzo on market breadth and defense that advisors can actually execute.