News & Investment Updates From Bluegrass Capital Advisors

It’s easy to stay disciplined when things are going smoothly. When markets rise steadily and portfolios deliver consistent gains, the urge to deviate from the plan feels almost nonexistent. But discipline is truly tested when the tide shifts and moments of uncertainty creep in.

The irony of easier times is that they can dull our readiness for challenges. When the path has been smooth, it’s human nature to expect more of the same — to relax the guardrails and let emotions sneak into decision-making.

Yet, resilience in investing, as in life, is built not during the good times but in how we prepare for and respond to the hard ones.

As 2025 begins to unfold, it’s worth reflecting on how quickly conditions can shift. A year of strong trends can easily be followed by stretches that test patience. It’s in those moments of doubt, discomfort, and even frustration that the value of a systematic, long-term plan becomes most apparent. While the temptation to chase quick fixes or abandon time-tested processes may arise, those who endure with discipline often find themselves better positioned when conditions turn again.

In this month’s Note, we reflect on how sticking to a disciplined, systematic process through both easy and challenging market conditions builds resilience over time. By revisiting the “tale of two markets” from 2024 — where fortunes varied dramatically between the first and second halves of the year — we explore how short-term fluctuations can test resolve but ultimately reinforce the value of long-term commitment. The lessons learned serve as a reminder that successful investing isn’t about avoiding volatility but about enduring it with discipline.

But first, here’s a summary of the global asset classes utilized in our portfolios and their exposures for February.

As humans, we’re wired to crave certainty.

It’s comforting to think we can predict what’s coming next — in life, in markets, and in the broader world.

This desire for certainty isn’t just a quirk; it’s rooted in cognitive biases that shape how we interpret the world. Recency bias tempts us to overemphasize recent events, assuming today’s trends will continue indefinitely. Overconfidence convinces us we know more than we do, emboldening us to make predictions we can’t possibly guarantee. And confirmation bias leads us to seek out information that aligns with what we already believe, reinforcing flawed assumptions.

These biases don’t just influence individuals. They shape market sentiment, often leading to predictions that seem logical in the moment but unravel with time.

At Bluegrass Capital Advisors, we aim to sidestep these traps by trading the allure of certainty for the discipline of a systematic approach. Instead of speculating about what SHOULD happen, we focus on following what IS happening, using trends to guide us through uncertainty.

As we reflect on 2024 — a year that defied many expectations — and prepare for 2025, we’re reminded that resilience comes from acknowledging uncertainty rather than resisting it. In this month’s note, we explore how the past year unfolded, the lessons we’ve drawn, and the opportunities we see ahead.

But first, here’s a summary of the global asset classes utilized in our portfolios and their exposures for January.