Dear Partners and Prospective Investors.
Markets rarely change direction suddenly. More often, they transition gradually—through shifts in leadership, leverage, and correlation that only become obvious after the fact. This week’s market environment continues to reflect that process. Policy intervention, trade friction, rising leverage, and record levels of government debt are reshaping the financial landscape, and markets are responding first through price and structure.
Over long market cycles, periods marked by trade disruption, fiscal expansion, and monetary accommodation have often preceded structural changes in asset leadership. The early 1970s, the post-2008 period, and other transitional regimes shared common characteristics: uneven equity performance, reduced effectiveness of traditional diversification, rising leverage, and growing leadership from commodities and currencies. The present environment shows many of these same features.
Recent tariff increases and renewed trade friction have added cost pressures and inefficiencies into the global system. Historically, tariffs act as friction rather than stimulus, raising production costs and distorting trade flows. Markets do not reprice these effects immediately; capital migrates gradually toward assets tied to real supply, demand, and currency valuation.
At the same time, government debt levels have reached historic extremes. U.S. federal debt now exceeds $34 trillion, with annual deficits remaining structurally elevated. Globally, sovereign debt has expanded materially over the past decade. History shows that periods of rising debt burdens often coincide with increased sensitivity to currency value, greater reliance on liquidity provision, and a shift toward real assets as markets adjust to long-term fiscal realities.
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In addition to sovereign debt, leverage within financial markets remains elevated. According to FINRA data, U.S. margin debt reached approximately $1.2 trillion in late 2025, marking a record high and representing an increase of more than 35 percent from year-earlier levels. Elevated margin debt has historically coincided with increased market fragility, particularly when volatility rises or leadership narrows. Previous peaks in margin debt occurred ahead of major market transitions in 2000 and 2007.
Beyond traditional margin borrowing, securities-based lines of credit have grown significantly. These facilities allow investors to borrow against portfolios of equities and bonds without selling underlying assets. While often overlooked, securities-based lending introduces embedded leverage that can amplify drawdowns when asset prices decline or correlations rise. Periods marked by high government debt, elevated investor leverage, and concentrated positioning have historically been sensitive to regime change. When markets adjust, leveraged exposures often respond quickly, reinforcing trends once leadership shifts.
Against this backdrop, one of the clearest signals in the current market environment continues to come from metals. Silver remains at or near all-time highs, advancing through a smooth and persistent trend rather than speculative spikes. Historically, this type of behavior has often aligned with periods where markets begin reassessing long-term purchasing power and monetary confidence.
The Nehemiah Fund has been fully scaled into silver over the past several months at an average price of approximately $55 per ounce. This position was built incrementally as price confirmed structure and trend strength, not in response to headlines or opinion. Gold and copper are reinforcing the same message. Gold has long reflected confidence in financial systems during periods of fiscal expansion and policy intervention. Copper, tied directly to infrastructure, energy systems, and global industrial activity, reflects real economic demand rather than financial speculation. The Fund remains fully scaled into silver, gold, and copper, aligned with confirmed price trends across all three metals.
As silver advanced through $70, $75, and even $80 per ounce, the Fund did not reduce exposure based on subjective profit targets. Positions are managed using systematic trailing stops, allowing trends to continue until price structure objectively signals otherwise. Exits occur only when price dictates, not when emotion intervenes. This approach removes bias and allows the system—not instinct—to govern decision-making.
Another area offering insight into current market behavior has been the digital asset futures complex. Bitcoin, Ethereum, and Solana futures spent extended periods forming structural base formations, reflecting stabilization after prolonged declines. A base represents transition, not momentum. Recently, price began confirming higher structure off those bases, suggesting the early stages of potential trend development.
When that structure weakened over the weekend, the Nehemiah Fund reduced all exposure to digital assets on Sunday evening into Monday. This decision was not emotional and was not a judgment on long-term viability. It was a direct response to price no longer meeting system criteria. This illustrates a central advantage of systematic trading: participation without anticipation, and exit without hesitation.
The Nehemiah Fund is built on several foundational principles that distinguish systematic trend following from traditional investment approaches. Price is the sole decision-maker. The system does not rely on forecasts, narratives, or economic opinions. It responds only to confirmed price behavior. Diversification is global and structural, with exposure across metals, currencies, energy, and other liquid futures markets, providing access to uncorrelated drivers of return rather than concentration in a single asset class. Risk management is rule-based and consistent, with position sizing, exits, and trailing stops defined in advance and applied uniformly. The strategy adapts to regimes rather than predicting them, allowing capital to reallocate automatically as leadership changes.
Historically, trend-following systems have been particularly effective during periods of elevated debt, rising leverage, policy intervention, and shifting correlations—precisely the conditions present today.
From our perspective as market participants, not economists or strategists, this appears to be an important time for investors to review whether their portfolios have access to diverse, uncorrelated global markets and whether their approach is flexible enough to adapt across different regimes. Price reveals change before commentary does, and structure shows stress before headlines do.
Did you know?
Did you know that historically, periods of rising sovereign debt and elevated leverage have often coincided with stronger trend behavior in commodities and currencies, as markets adjusted to shifts in fiscal sustainability and capital structure?
We appreciate your continued readership.
Warm regards,
The Nehemiah Fund Team