Thoughtful Money · Sep 24, 2026 · 1h 3m · 50m saved
With Ted Oakley, Founder and Managing Partner of Oxbow Advisors
The average sector of the S&P 500 is 18% to 19% below its high, Ted Oakley said, even with the index near a record, because so much of the money has gone into AI.
Most portfolios are fully invested in the stocks carrying the index. Oxbow Advisors has held a lot of cash for the past couple of years and keeps about 15% of its stock portfolio in energy, a sector the host put at about 3% of the S&P at the start of the year.
"And so if you do have liquidity, and I think you should always have liquidity no matter what kind of market you're in, you just should have some."
Ted Oakley, founder and managing partner of Oxbow Advisors, which manages money for high-net-worth families, spoke on Thoughtful Money with Adam Taggart. He said all of his firm's best years came out of bear markets: 1987, 1988, 2003 and 2009.
The full interview is covered here so you can skip it. 63 minutes of audio, 13 minutes of reading.
Here are the 11 lessons that matter.
Key Takeaways
The average S&P sector is 18% to 19% off its high, while the Nasdaq 100 looks fine
The US economy is a one-trick pony, in his words, and the AI build-out will pass
Owning the index is not diversification; the top 10 companies are about 41% to 42% of the S&P, the host said
Oxbow's best years all came out of bear markets, when it could buy stocks paying 15% dividends
A 75-year-old running his own money may be judging himself on the best 10 or 12 years he will ever see
Oakley buys Treasuries of three years or less so he always knows when the money comes back
Oil is the signal for bonds: when it rolls over and inflation eases, he would trade the long bond
Materials and energy are the cheapest sectors he sees, pipelines included
Cash flow does the work: at 8% to 10%, a manager does not need to be brilliant to average 15%
Oxbow turns away clients whose expectations are not realistic
1. An Economy Tied To AI
Taggart opened with the headwinds: the Fed hiking again and the 10-year Treasury yield close to 5.1% on the day of recording. Against that, the Atlanta Fed's GDPNow estimate for third-quarter growth was above 5%. He asked whether this was a time to invest or to hold back.
Take AI out and the growth numbers look weaker
Oakley said the economy is "a one-trick pony." Everything is tied to AI, and without it the numbers "wouldn't be near as good." The build-out will pass in time, he said, which matters for a firm that tries to buy things that last five to 10 years.
Oxbow still holds a lot of cash. Under the surface, he said, the market is not doing well.
"I mean, if you want to judge it by the QQQ or the Nasdaq 100, you know, then things seem to be okay." — Ted Oakley
He does not think the flow of money into one theme lasts another year or two. Oxbow looks for high quality, low valuation and good cash flow, and owns about 45 companies in its stock portfolio and about 30 in its high-income portfolio. He said few stocks are in his buying zone now.
Energy led the market this year and nobody owns it
"I mean, people probably don't realize it, but energy has been really the number one performing this year." — Ted Oakley
Taggart said energy was about 3% of the S&P at the start of the year. Oakley said Oxbow holds about 15%.
Adding the pipelines, he said, takes it to "Maybe 17".
That is where the best dividends were and still are, he said, and the stocks are still cheap after a strong year. Taggart noted Oxbow has offices in Texas and talks to people in the industry.
