Welcome back to the Smart Wealth Newsletter, where we share our family’s real-world investing journey across stocks, crypto, and real estate. I’m Chris, and I manage our primary family portfolio while working to teach my kids how to build long-term wealth. Trip is a student at the Freeman Business School at Tulane University, where he’s studying finance and learning the fundamentals of markets, valuation, and portfolio construction. Frankie is a senior at All Saints Academy, and he’s actively managing his own brokerage account as he prepares for college and the next stage of his financial journey.

Each week, we track our performance, discuss what’s happening in the markets, and share lessons we’re learning along the way. Our goal is simple: build generational wealth while teaching practical financial skills that most schools never cover.

The first full week of February delivered one of the most dramatic swings of the year so far, reminding investors that even in a strong bull market, volatility remains a constant companion. Major indexes experienced sharp midweek declines before staging a powerful rally on Friday, pushing the Dow Jones Industrial Average to a historic milestone while leaving technology-heavy indexes mixed for the week.

By the close on Friday, February 6, the Dow Jones Industrial Average surged to 50,115.67, up roughly 2.5% for the day and more than 1,200 points higher, marking the first time in history the index closed above the 50,000 level. The S&P 500 finished at 6,932.30, gaining about 2% on the day, while the Nasdaq Composite closed at 23,031.21, up 2.2% in Friday’s rally.

However, the weekly picture told a more nuanced story. Despite the strong finish, the S&P 500 slipped 0.1% for the week, and the Nasdaq fell 1.8%, reflecting earlier weakness in technology stocks. In contrast, the Dow gained 2.5% for the week, highlighting a rotation into industrials, financials, and more traditional sectors.

The week began with heightened anxiety surrounding the technology sector, particularly companies tied to artificial intelligence. Investors grew concerned about the enormous capital expenditures being announced by major tech firms, especially after news of large-scale AI and robotics spending plans from companies like Amazon. Those announcements raised questions about future profitability, cash flow, and the timeline for returns on AI investments.

As a result, high-growth tech stocks experienced sharp pullbacks early in the week. The Nasdaq, which is heavily weighted toward technology companies, bore the brunt of the selling pressure. Some investors rotated out of high-multiple growth stocks and into more traditional sectors, including industrials, energy, and financials.

By midweek, the market sentiment had become cautious, with fears that the AI spending boom could temporarily pressure earnings. However, those concerns began to fade as analysts and executives reiterated the long-term growth potential of artificial intelligence infrastructure.

Friday’s rally was fueled by renewed confidence in the tech sector, stronger-than-expected corporate earnings, and growing optimism that interest rates could decline later in the year.

The most notable headline of the week was the Dow crossing the 50,000 mark for the first time. This milestone reflects the powerful multi-year bull market that has been driven by strong corporate earnings, AI innovation, and resilient consumer spending.

The Dow’s composition—featuring more industrial, financial, and diversified companies—helped it outperform the tech-heavy Nasdaq this week. Stocks such as industrial machinery makers, financial institutions, and energy companies saw renewed buying interest.

The fact that the Dow reached this milestone while the Nasdaq struggled earlier in the week highlights a key theme of the current market: rotation. Investors are increasingly moving capital between sectors based on valuations, earnings expectations, and macroeconomic trends.

Another key driver of market sentiment this week was the outlook for interest rates. Investors are closely watching economic data for clues about when the Federal Reserve might begin cutting rates.

Lower interest rates typically support stock valuations, especially for growth companies. That’s because future earnings are discounted at a lower rate, making them more valuable in today’s dollars.

Recent economic data suggested that inflation is moderating, though not yet fully under control. At the same time, some labor market indicators have softened slightly, fueling expectations that the Fed may have room to ease policy later this year.

This potential shift toward rate cuts was one of the catalysts behind Friday’s rally, particularly in interest-rate-sensitive sectors.

Despite the week’s volatility, artificial intelligence remains the central investment theme driving the market. Chipmakers, cloud providers, and AI infrastructure companies continue to attract massive capital.

Semiconductor stocks led the rebound on Friday, helping power the Nasdaq higher.

Investors appear to be coming to terms with the reality that AI investment cycles are capital-intensive in the short term but potentially transformative in the long term. This is similar to past technology cycles, such as the build-out of the internet in the late 1990s or the smartphone ecosystem in the 2010s.

The companies that successfully build and control AI infrastructure could dominate the next decade of economic growth.

While stocks were volatile, Bitcoin experienced even more dramatic price swings. During the week, Bitcoin plunged toward the $60,000 level before staging a sharp rebound.

By February 6, Bitcoin closed around the mid-$60,000 range after briefly trading near $60,000 earlier in the week. At one point during the rebound, it traded back above $70,000, showing just how quickly sentiment can shift in the crypto market.

Despite the bounce, Bitcoin remains well below its late-2025 all-time highs, reflecting the broader risk-off sentiment that affected technology and growth assets earlier in the week.

The recent decline in Bitcoin appears to be tied to:

However, the quick rebound also demonstrated that institutional demand for Bitcoin remains strong.

The volatility in Bitcoin had a direct impact on crypto-related equities, including companies with large Bitcoin holdings. Some of these stocks experienced sharp declines during the sell-off, followed by equally strong rebounds as Bitcoin recovered.

This dynamic highlights an important lesson: stocks tied closely to a single asset, like Bitcoin, can experience amplified volatility compared to the underlying asset itself.

One of the biggest takeaways from the week was the ongoing rotation between sectors. While tech stocks faced pressure early in the week, industrial and financial companies provided stability.

By the end of the week, the market’s broad rally suggested that investors are still confident in the overall economic outlook. The strong performance of the Dow, in particular, indicates that the bull market is not limited to just a handful of tech giants.

Instead, capital appears to be spreading across multiple sectors, which is typically a healthy sign for the long-term sustainability of a market rally.

Another notable development was the performance of small-cap stocks. The Russell 2000 outperformed the major indexes for the week, signaling improving sentiment toward domestic growth companies.

Small-cap stocks are often seen as a barometer of domestic economic health. Their outperformance suggests that investors remain optimistic about the U.S. economy, even amid concerns about inflation and interest rates.

Despite the week’s volatility, the broader market trend remains positive. The Dow is firmly in positive territory year-to-date, and the S&P 500 continues to hold near all-time highs.

The key themes driving the market right now include:

For long-term investors, weeks like this serve as a reminder that market swings are normal—even in strong bull markets. The most important factor remains staying invested in high-quality assets and maintaining a long-term perspective.

MicroStrategy has become one of the most unique and controversial stocks in the market. Originally known as an enterprise software company, the firm has transformed itself into what many investors now view as a leveraged proxy for Bitcoin.

The company’s strategy is simple but bold: accumulate as much Bitcoin as possible and hold it as a long-term treasury asset. Over time, MicroStrategy has raised capital through equity offerings, convertible debt, and other financial instruments to buy more Bitcoin.

This approach has turned the company into one of the largest institutional holders of Bitcoin in the world.

For investors who believe in Bitcoin’s long-term potential, MicroStrategy offers a unique opportunity. Instead of buying Bitcoin directly, investors can gain exposure through a publicly traded stock that often moves even more dramatically than the cryptocurrency itself.

That leverage works both ways. When Bitcoin rises, MicroStrategy’s stock often surges. When Bitcoin falls, the stock can decline sharply.

This past week provided a perfect example of that dynamic. As Bitcoin plunged earlier in the week, MicroStrategy’s stock dropped sharply. But when Bitcoin rebounded, the stock staged a powerful rally.

Trip experienced this volatility firsthand. On Friday alone, he was up about 26% on MicroStrategy. However, because of the recent drop in Bitcoin, he still has an overall loss on the position.

That’s the reality of investing in high-volatility assets. Short-term gains can be dramatic, but so can short-term losses. The key is understanding the underlying thesis.

For MicroStrategy, that thesis is simple: if Bitcoin continues to appreciate over the long term, the company’s balance sheet—and therefore its stock—could grow dramatically.

There are several reasons why many investors remain bullish on MicroStrategy.

First, the company’s leadership has shown unwavering conviction in Bitcoin. CEO Michael Saylor has built his entire corporate strategy around the cryptocurrency. This level of commitment is rare among public companies.

Second, MicroStrategy’s structure allows it to act as a leveraged Bitcoin vehicle. By using debt and equity financing, the company can acquire more Bitcoin than it could with just its operating cash flow.

This leverage amplifies returns during bull markets. When Bitcoin rallies, MicroStrategy’s stock often rises faster than the cryptocurrency itself.

Third, the company benefits from being publicly traded. Many institutional investors cannot buy Bitcoin directly due to regulatory or policy restrictions. However, they can buy shares of MicroStrategy.

This creates additional demand for the stock, especially during strong crypto bull markets.

Fourth, MicroStrategy has become a recognized brand within the crypto investing community. Many investors view it as a high-beta expression of Bitcoin exposure.

Of course, the strategy comes with risks.

The biggest risk is Bitcoin itself. If Bitcoin enters a prolonged bear market, MicroStrategy’s balance sheet would suffer. Because the company has taken on debt to buy Bitcoin, a large decline in the cryptocurrency’s price could create financial pressure.

There’s also the issue of volatility. MicroStrategy’s stock can swing wildly in both directions, sometimes moving double digits in a single session.

For long-term investors, though, the appeal lies in the asymmetric upside. If Bitcoin continues its long-term trajectory, MicroStrategy could benefit disproportionately.

For younger investors like Trip, positions like MicroStrategy also serve as valuable learning experiences. They teach lessons about volatility, conviction, and the importance of position sizing.

In the end, MicroStrategy is not a traditional stock. It’s essentially a publicly traded Bitcoin strategy with a software business attached.

For investors who believe strongly in Bitcoin’s future, it remains one of the most direct and leveraged ways to express that conviction in the stock market.

One of the most powerful wealth-building tools in real estate isn’t appreciation, rental income, or even leverage. It’s depreciation.

Depreciation is a non-cash expense that allows real estate investors to reduce their taxable income. Even though a property may actually be increasing in value, the IRS allows you to deduct a portion of its value each year as if it were wearing out.

For residential rental property, the standard depreciation schedule is 27.5 years. That means if you buy a rental property for $275,000 (excluding the land value), you could potentially deduct about $10,000 per year in depreciation.

This deduction can significantly reduce your taxable rental income—and in some cases, eliminate it entirely.

But the real magic happens when you use a strategy called cost segregation.

Cost segregation is an engineering-based tax strategy that breaks down a property into different components, each with its own depreciation schedule.

Instead of depreciating the entire property over 27.5 years, cost segregation allows you to identify components that can be depreciated over much shorter timeframes, such as:

By accelerating depreciation on these components, you can take a much larger deduction in the early years of ownership.

For example, imagine you buy a $300,000 rental property. After excluding the land value, let’s say the depreciable basis is $240,000.

Using standard depreciation, you might deduct around $8,700 per year.

But with a cost segregation study, you might be able to reclassify $60,000 of that property into shorter-life assets.

If bonus depreciation is available, you could potentially write off a large portion of that $60,000 in the first year alone.

This could result in a first-year depreciation deduction of $40,000, $50,000, or even more, depending on the property.

That deduction could offset rental income, W-2 income (in certain cases), or business income, dramatically reducing your tax bill.

This is why many experienced real estate investors focus not just on cash flow, but on tax efficiency.

Depreciation allows you to keep more of your money working for you instead of sending it to the IRS.

Over time, this can create a powerful compounding effect.

You use depreciation to reduce taxes, which frees up more cash. You reinvest that cash into additional properties. Those properties generate more depreciation, which reduces your taxes even further.

It becomes a snowball effect.

Of course, there are important considerations.

Depreciation is recaptured when you sell the property, meaning you may owe taxes on the deductions you previously took. However, strategies like 1031 exchanges can allow you to defer those taxes by rolling the proceeds into another investment property.

In addition, cost segregation studies have upfront costs, and they’re not always worth it for smaller properties. But for many investors, especially those buying properties in the $250,000 to $1 million range, the tax savings can far outweigh the initial expense.

For our family, real estate depreciation is one of the core pillars of our wealth-building strategy. It allows us to reduce our tax burden while building long-term equity and cash flow.

When combined with appreciation, rental income, and leverage, depreciation becomes one of the most powerful tools available to investors.

Chris’s Morgan Stanley portfolio remains heavily concentrated in high-quality, long-term compounders across technology, industrials, consumer staples, and energy infrastructure.

Alphabet (GOOG) closed at $585.91, and Chris is up 88.24%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns Alphabet because of its dominant search business and growing AI leadership. Its massive cash flow and data advantage support long-term growth.

Amazon (AMZN) closed at $210.32, and Chris is up 1.11%. The average analyst rating is Strong Buy, and Chris’s rating is Buy. He owns Amazon for its leadership in e-commerce and the powerful AWS cloud platform. AI and logistics investments should drive future margin expansion.

Apple (AAPL) closed at $278.12, and Chris is up 85.65%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns Apple because of its unmatched ecosystem and recurring services revenue. Its massive cash generation makes it a core long-term holding.

Costco (COST) closed at $1,001.16, and Chris is up 112.85%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns Costco because of its powerful membership model and consistent growth. The company’s pricing power creates reliable long-term returns.

Deere (DE) closed at $583.11, and Chris is up 66.60%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns Deere for its leadership in agricultural equipment and precision farming technology. Global food demand supports long-term growth.

GE Aerospace (GE) closed at $321.00, and Chris is up 224.74%. The average analyst rating is Strong Buy, and Chris’s rating is Buy. He owns GE Aerospace because of its dominant position in aircraft engines and services. Long-term service contracts provide strong recurring revenue.

GE Healthcare (GEHC) closed at $80.65, and Chris is down 2.04%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns GE Healthcare for its leadership in medical imaging. Demographic trends support long-term demand.

GE Vernova (GEV) closed at $779.35, and Chris is up 665.97%. The average analyst rating is Buy, and Chris’s rating is Buy. He owns GE Vernova for its exposure to global electrification and energy infrastructure spending. It has been one of the biggest winners in the portfolio.

Kroger (KR) closed at $67.50, and Chris is up 37.80%. The average analyst rating is Hold, and Chris’s rating is Hold. He owns Kroger for its defensive characteristics and stable cash flow. It provides balance during market volatility.

Meta Platforms (META) closed at $661.46, and Chris is up 14.10%. The average analyst rating is Strong Buy, and Chris’s rating is Buy. He owns Meta because of its dominance in digital advertising. AI-driven improvements are expanding margins.

Microsoft (MSFT) closed at $401.14, and Chris is up 810.19%. The average analyst rating is Strong Buy, and Chris’s rating is Buy. He owns Microsoft for its leadership in enterprise software and cloud computing. Its AI strategy gives it a major competitive advantage.

Procter & Gamble (PG) closed at $159.17, and Chris is up 96.64%. The average analyst rating is Hold, and Chris’s rating is Hold. He owns Procter & Gamble for its dividend and defensive qualities. It adds stability to the portfolio.

Amazon (AMZN) closed at $210.32, down 5.56%. Analyst rating: Strong Buy. Chris rating: Buy. He owns Amazon for its e-commerce dominance and AWS growth engine. AI and logistics investments support long-term expansion.

American Express (AXP) closed at $359.15, up 115.47%. Analyst rating: Buy. Chris rating: Buy. He owns American Express for its premium customer base and strong brand loyalty. The company benefits from high-spending consumers and consistent fee revenue.

Kinder Morgan (KMI) closed at $30.50, up 104.51%. Analyst rating: Hold. Chris rating: Hold. He owns Kinder Morgan for its steady dividend and pipeline cash flow. It provides income and energy infrastructure exposure.

ExxonMobil (XOM) closed at $149.05, up 77.63%. Analyst rating: Buy. Chris rating: Buy. He owns ExxonMobil for its global energy leadership and strong dividend. The company benefits from high cash flow during strong commodity cycles.

Tesla (TSLA) closed at $411.11, up 29.28%. Analyst rating: Hold. Chris rating: Buy. He owns Tesla for its leadership in electric vehicles and autonomous technology. AI and robotics initiatives offer long-term upside.

Apple (AAPL) closed at $278.12, up 156.38%. Analyst rating: Buy. Chris rating: Buy. He owns Apple for its powerful ecosystem and recurring services revenue. Its massive cash flow supports long-term growth.

Nvidia (NVDA) closed at $185.41, up 87.79%. Analyst rating: Strong Buy. Chris rating: Buy. He owns Nvidia because it dominates AI chips and data center acceleration. The company sits at the center of the AI boom.

Palantir (PLTR) closed at $135.90, down 10.79%. Analyst rating: Hold. Chris rating: Buy. He owns Palantir for its advanced data analytics platforms. Its AI-driven software could drive strong future growth.

Trip’s portfolio reflects a mix of AI leaders, energy, space, infrastructure, and higher-growth speculative names as he continues learning about volatility, sector cycles, and position sizing.

Alibaba (BABA) closed at $162.51, and Trip is up 109.69%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns Alibaba because of its dominant position in Chinese e-commerce and cloud computing. He believes the stock is undervalued relative to its growth potential.

MicroStrategy (MSTR) closed at $134.93, and Trip is down 22.28%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns MicroStrategy as a leveraged play on Bitcoin’s long-term upside. The position gives him exposure to the crypto cycle.

New Gold (NGD) closed at $10.57, and Trip is down 17.68%. The average analyst rating is Hold, and Trip’s rating is Buy. He owns New Gold as a play on gold prices and inflation protection. It provides diversification during uncertain markets.

NextEra Energy (NEE) closed at $89.47, and Trip is up 1.99%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns NextEra for its leadership in renewable energy. The company offers both growth and defensive characteristics.

GE Vernova (GEV) closed at $779.35, and Trip is up 677.46%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns GE Vernova for its exposure to electrification and global power infrastructure. It has been his biggest winner.

Rocket Lab (RKLB) closed at $72.32, and Trip is down 16.6%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns Rocket Lab as a long-term bet on the space economy. The company’s launch and satellite business offer strong growth potential.

L3Harris Technologies (LHX) closed at $349.66, and Trip is down 2.12%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns L3Harris for its defense and aerospace exposure. The company adds stability to the portfolio.

Apple (AAPL) closed at $277.86, and Trip is up 139.69%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns Apple because of its powerful ecosystem and recurring revenue. It remains a core long-term holding.

AST SpaceMobile (ASTS) closed at $101.79, and Trip is down 10.33%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns AST SpaceMobile as a high-risk play on satellite-based cellular networks. If successful, the technology could transform connectivity.

Nvidia (NVDA) closed at $185.41, and Trip is up 58.29%. The average analyst rating is Strong Buy, and Trip’s rating is Buy. He owns Nvidia because it dominates AI chips. The company is central to the AI boom.

IREN Ltd (IREN) closed at $41.83, and Trip is down 30.28%. The average analyst rating is Hold, and Trip’s rating is Buy. He owns IREN as a leveraged play on Bitcoin mining and data centers. The position is volatile but offers upside in crypto bull markets.

Adobe (ADBE) closed at $268.38, and Trip is up 0.37%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns Adobe for its dominance in creative software. AI-driven tools could accelerate growth.

Chevron (CVX) closed at $180.86, and Trip is up 9.23%. The average analyst rating is Buy, and Trip’s rating is Buy. He owns Chevron for its strong dividend and exposure to global energy demand. It provides steady cash flow.

Bitmine Immersion Technologies (BMNR) closed at $20.47, and Trip is down 21.27%. The average analyst rating is Hold, and Trip’s rating is Buy. He owns Bitmine as a speculative crypto mining play. It reflects his willingness to take calculated risks.

Frankie’s portfolio is built around a combination of AI leaders, energy infrastructure, autonomous driving, and emerging semiconductor companies.

Navitas Semiconductor (NVTS) closed at $8.86, and Frankie is up 19.08%. The average analyst rating is Buy, and Frankie’s rating is Buy. He owns Navitas for its leadership in next-generation power semiconductors. The company benefits from growth in AI data centers and electric vehicles.

GE Vernova (GEV) closed at $779.35, and Frankie is up 677.46%. The average analyst rating is Buy, and Frankie’s rating is Buy. He owns GE Vernova for its exposure to global electrification trends. It has been one of the biggest winners across the family portfolios.

Nebius Group (NBIS) closed at $86.10, and Frankie is up 1.57%. The average analyst rating is Buy, and Frankie’s rating is Buy. He owns Nebius as a play on AI infrastructure and cloud services. Rising demand for computing power supports growth.

Microsoft (MSFT) closed at $401.14, and Frankie is up 258.73%. The average analyst rating is Strong Buy, and Frankie’s rating is Buy. He owns Microsoft for its leadership in enterprise software and cloud computing. Its AI initiatives drive long-term growth.

Tesla (TSLA) closed at $411.11, and Frankie is up 38.24%. The average analyst rating is Hold, and Frankie’s rating is Buy. He owns Tesla for its leadership in EVs and autonomous technology. Robotics and AI offer long-term upside.

Palantir (PLTR) closed at $135.90, and Frankie is down 5.54%. The average analyst rating is Hold, and Frankie’s rating is Buy. He owns Palantir for its advanced data analytics platforms. AI-driven software could fuel future growth.

Aurora Innovation (AUR) closed at $4.28, and Frankie is up 9.74%. The average analyst rating is Buy, and Frankie’s rating is Buy. He owns Aurora as a long-term bet on autonomous trucking. The technology could transform logistics.

Meta Platforms (META) closed at $661.46, and Frankie is up 14.46%. The average analyst rating is Strong Buy, and Frankie’s rating is Buy. He owns Meta because of its dominance in digital advertising and AI-driven engagement. Margin expansion supports long-term growth.

This newsletter is for educational purposes only and should not be considered financial, tax, or investment advice. We are sharing our family’s personal experiences and strategies, not making recommendations for your specific situation. Always do your own research and consult with a qualified financial advisor, tax professional, or attorney before making any investment decisions. Investing involves risk, including the possible loss of principal.