News & Investment Updates From Bluegrass Capital Advisors

When uncertainty rises, investors often default to recent experience or familiar narratives, even when those approaches quietly accumulate risk.

The year 2025 has highlighted how quickly that can happen:

• A sharp, policy-driven sell-off early in the year was followed by a rapid recovery
• Market leadership remained concentrated in a small group of mega-cap and AI-related stocks
• Volatility appeared in short, intense bursts
• Global markets challenged assumptions formed over the prior decade

These were not developments that could be reliably predicted in advance. Attempting to do so would have required constant judgment calls at exactly the wrong moments. This is why at Bluegrass Capital Advisors, our focus is not on forecasting what comes next, but on maintaining a rules-based investing process that adapts as trends emerge.

This month’s Note reviews the defining market themes of 2025 and how our portfolios responded as conditions evolved. Think of it as our version of “Spotify Wrapped,” but for the markets.

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

The past few years have shown how quickly market regimes can shift — from a long stretch of falling rates, to the rapid tightening cycle, and the adjustments we’re seeing today.

These transitions don’t reward prediction; they reward process. When conditions change this quickly, discipline becomes the differentiator. A clear, systematic investing approach keeps decisions grounded in data instead of sentiment, and that matters most when the environment is moving faster than investor intuition can keep up.

Our role isn’t to guess what comes next. It’s to stay aligned with the trends that actually emerge and adapt as those trends evolve. That’s what we believe has the power to keep portfolios steady when cash feels comfortable, and what allows them to participate when other assets begin to strengthen.

Discipline — not timing — is what turns market transitions from a source of anxiety into an opportunity.

This month’s Note looks at how the changing rate landscape influenced T-bills and why a rules-based process helps investors stay aligned with what markets are doing, not what they’re supposed to do.

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