On February 19th the Wall Street Journal reported that America imported a record amount of goods last year and that the U.S. trade deficit in December – the latest date for which figures are available – rose $70.3 billion. The goods trade deficit hit a record $1.24 trillion in 2025. These figures come as a surprise. The tariffs imposed by the Trump administration starting in April of last year were supposed to curtail imports and spur domestic production. So, what happened? Why hasn’t the trade deficit improved? At first glance, tariffs seem straightforward. Make imported goods more expensive and Americans will buy fewer of them. In theory, that should shrink the gap between what the U.S. buys from other countries and what it sells to them. But in practice, that’s not what’s happening. One reason is that other countries haven’t simply accepted the hit. Instead, many have doubled down on supporting their own exporters. Governments in Europe and Asia have rolled out subsidies, financing programs, and industrial policies to help domestic companies stay competitive. So even when tariffs raise costs, foreign producers often find ways to offset the impact and keep their goods flowing into global markets, including the U.S. Another key point is that tariffs tend to rearrange trade rather than reduce it overall. If imports from one country become more expensive, businesses often shift to suppliers in another country. The source changes, but the total volume of imports doesn’t necessarily decline. That means the overall trade deficit can remain largely intact, even if trade patterns look different. Economists have argued for years, with plenty of evidence, that trade deficits are driven by deeper macroeconomic forces. The U.S. tends to spend more than it saves, and when a country consumes more than it produces, it imports the difference. That imbalance shows up as a trade deficit. Tariffs don’t change national savings rates or deficit spending by both public and… | Read More »
Recent News
Navigating AI’s swift sea change
Over the past year, Artificial Intelligence has shifted from being a buzzword to something that is actively changing how work gets done. This is true especially in technology, but increasingly it is affecting businesses in every sector of the economy. The speed at which AI is getting better at solving problems and improving workflow is astonishing. In software development, AI tools are now doing in minutes what used to take programmers weeks. These systems can generate, review, and refine large amounts of code. Their ability to communicate what they are doing and why has them acting like an additional team member. The result isn’t just marginal efficiency, it’s a step-change in output. Companies are launching products faster, testing ideas more quickly, and operating with smaller teams. In some cases, firms have reduced the size of their technical staff while increasing overall production. What’s important here is that this isn’t just about programmers. The same types of AI systems are being applied to legal research, financial modeling, marketing copy, customer service, and medical analysis. In other words, AI is beginning to perform tasks that used to require advanced degrees and years of training. AI systems aren’t progressing in a straight line, they’re compounding. Each new version tends to improve rapidly because it learns from larger data sets and more usage. Leaders in the field describe this moment as standing in front of a powerful wave that’s already forming offshore. It hasn’t fully hit yet, but it’s coming, and fast. From an economic standpoint, this raises two big questions. First, how many jobs will be displaced or reshaped? And second, how quickly can workers and companies adapt? History tells us that new technologies eventually create new industries and opportunities. The Industrial Revolution eliminated certain types of work but created entirely new sectors. The internet did the same. The difference today is the speed. If AI can absorb certain types of cognitive work… | Read More »
The rise of the individual investor
Since the 1980s, financial firms on Wall Street have increasingly relied on machines and algorithms to streamline trading and enhance their returns. Firms like Blackrock, State Street, Goldman Sachs, JP Morgan and others invested heavily in powerful computer hardware. They then aggressively recruited the top PhDs in math, logic, and computer science to design software to optimize trading results. By the 2010s up to 70% of all the trades on the New York and NASDAQ stock exchanges were executed by machine algorithms, with no human input other than the employee who wrote the code. As you might imagine, these firms are now using even faster machines, Artificial Intelligence, to assess risk and find inefficiencies in markets that they can exploit to gain a competitive edge. Further, these institutions are leveraging billions of dollars to make trades that move the market in one direction or the other. Given the size and influence of these institutional investors, it would seem that the small, retail investor can do nothing other than go along for the ride, hoping the big players don’t lead them off a cliff. But something strange happened as these machines became more powerful and ubiquitous. They gave the retail investor more influence than they ever had before. What began as a fringe phenomenon during the meme-stock mania of 2021 – when retail traders rapidly drove up shares of companies like GameStop and AMC – has now evolved into a more sustained and influential presence in markets. Analysts and market participants are saying that this shift is not temporary but indicative of a structural change in market participation. Retail investors, many of them day-traders or everyday savers, contributed a record amount of capital into stocks, ETFs, options, and other, less traditional, instruments during the year. According to a December 31, 2025 article in the Wall Street Journal, retail trades reached approximately 22% of overall trading volume in October, the highest level… | Read More »
Building a well-diversified portfolio and Making a Difference
A quote attributed to Ralph Waldo Emerson measures success in ways that transcend finances. “To laugh often and much,” it begins. “To win the respect of intelligent people and the affection of children; To earn the appreciation of honest critics and endure the betrayal of false friends; To appreciate beauty; To find the best in others; To leave the world a bit better, whether by a healthy child, a garden patch or a redeemed social condition; To know even one life has breathed easier because you have lived; This is to have succeeded.” While we are in the business of helping our clients build financial success, we also know they need more than money to reach their life goals. Altruism matters too. Sometimes, it isn’t how much time and money you have, it’s what you do with those resources. National Make a Difference Day, which takes place this year on Saturday, Oct. 25, gives individuals and families the opportunity to accomplish a few of the markers in the Emerson poem. Healthy child? Check. You can volunteer with, or raise funds for, the American Cancer Society; or B.A.B.E.S. inc., which provides safe no-cost respite care, educational support and services, and counseling to young families. Garden patch? Check with a community garden to see if they need help weeding or harvesting. In Appleton, Riverview Gardens could use more planting partners to assist with their urban garden. You can also volunteer at a senior center to help them take care of their grounds. Redeemed social condition? Volunteer to make and/or serve a meal at Pillars, an adult and family shelters and resource center in Appleton. You could also volunteer at the Fox Valley Humane Society; or, if you’re older than 18, you could volunteer to help acclimate trained service dogs to the community. Just like any other investment, your portfolio of life should be well-diversified. To find more ideas about how you can… | Read More »
An Earth Day reflection and an everyday celebration
After a challenging start to my day, I walked to work this morning. It isn’t a long walk, but it is a refreshing one. As I breathed in the fresh spring air, I exhaled a lot of the morning’s frustrations. It occurred to me that what we give to the earth, we get back exponentially. My decision to leave my car at home today gave me some time to reset my mood and stretch my legs. I arrived ready to go. What a gift to me and to my coworkers. The reciprocal nature of our relationship with the earth allows us both to grow. We sow a seed, and the earth gives us fruit. Win/win. We can celebrate that precious relationship so easily. Dispose of some litter and the path ahead becomes clearer for you and the world. Breathe in a little oxygen, gift the earth with your carbon dioxide. We hope you get to feel a little sunshine on your face today, and fresh air in your lungs. Happy Earth Day from all of us at Winch Financial. IMPORTANT DISCLOSURE INFORMATION Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Winch Advisory Services, LLC [“Winch”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information serves as the receipt of, or a substitute for, personalized investment advice from Winch. contained in this blog serves… | Read More »