The Two Wolves Feeding The Markets
A simple story about two wolves
At Ford Wealth Management, we’ve been thinking a lot about a simple story: the one about the two wolves.
In the story, a grandfather tells his grandson that two wolves live inside each of us. One wolf is driven by anger, envy, regret, and greed. The other embodies joy, peace, kindness, and faith. The boy asks, “Which wolf wins?” The grandfather replies, “The one you feed.”
In investing, our wolves have different names, but the idea is the same.
In markets, the two wolves are fear and greed.
Right now, both are very much alive.
Fear: war and higher oil prices
On one side, we have fear.
The Strait of Hormuz is a narrow waterway between Iran and Oman. A large share of the world’s exported oil passes through this route. When there is war or tension in this area, and ships are blocked or slowed, the world is reminded how fragile energy supply can be.
When that happens, oil and gas prices can move higher. That makes it more expensive to ship goods, to fly, and to run factories. Over time, those higher costs can show up in the price of everyday items and keep inflation higher than people would like.
This is the fearful wolf: worries about war, energy shocks, inflation, and the feeling that the ground under the economy could shift.
Fear is not crazy. These are real risks, and we take them seriously.
Greed (or optimism): the AI boom
On the other side, we have greed — or, if you prefer, optimism.
We’re living through a big wave of enthusiasm for artificial intelligence and the powerful computers that run it. Some of the largest companies in the world are spending huge amounts of money to build and expand data centers, buy advanced chips, and create new AI tools.
That isn’t just a story on social media. It shows up in real spending, real projects, and stronger earnings for parts of the market. Investors see this and imagine faster growth, new products and services, and higher profits in the years ahead.
Stock indexes near record highs reflect that optimism. This is the greedy (optimistic) wolf being well fed.
Greed is not entirely misplaced either. Innovation and productivity have always been big drivers of long term wealth creation.
The real danger: feeding only one wolf
The real danger for investors is not that fear exists or that greed exists. The danger is what happens when you feed only one wolf and ignore the other.
When greed is in charge, it becomes easy to chase whatever is hot. You might pile into the latest trend, concentrate in a narrow group of stocks, and quietly assume recent gains will keep going. That can work for a while, right up until a surprise — like an escalation in war, a spike in oil prices, or a change in central bank policy — suddenly wakes the fearful wolf.
When fear is in charge, it becomes easy to retreat into cash. You may focus on every negative headline, feel frozen, and avoid taking any risk at all. That can feel safe in the moment, but it can also mean missing the long term benefits of owning productive assets in an innovative, growing economy.
The lesson of the two wolves is not to kill one wolf and celebrate the other.
It is to recognize that you run into trouble when you let either one dominate your decisions.
Why we’re careful with stories and headlines
There’s another layer to this: the stories people tell about markets.
Often, markets move first and the “story” appears later. Prices jump, and then commentators rush in to explain why. In other words, narrative follows price.
We’ve also seen a modern version of “the boy who cried wolf” during this war. Several times, political leaders have said that a peace deal with Iran is “very close,” “largely negotiated,” or just one meeting away. Each time, markets briefly act as if an all clear on oil and the Strait of Hormuz might be coming. Then talks stall, conditions change, and no final agreement is signed.
In the classic fable, the boy keeps shouting that a wolf is coming when there isn’t one, and eventually no one believes him. In today’s version, we sometimes hear repeated promises that the “wolf” of risk is gone, even though the key issues — oil flows, nuclear terms, and regional tensions — are still unresolved.
This is not about liking or disliking any politician. It is about recognizing that headlines and hopeful statements can change faster than the actual facts on the ground.
At Ford Wealth Management, we try not to trade every declaration that a deal is “almost done.” We treat these announcements as part of the background noise that surrounds real risks and real opportunities. Our job is to separate words from follow through and to avoid making big portfolio changes based on sound bites.
How we manage your money: rowing and sailing
So what do we do with all of this?
At Ford Wealth Management, we don’t see our job as choosing one wolf. That would be like trying to predict the weather every day.
We cannot control the wind, but we can adjust our sails.
Our investment strategies are designed to “row and sail.”
When there is a steady, favorable wind — for example, when long term trends like AI innovation are pushing markets forward and earnings are strong — we want our sails up. That means staying invested in stocks and other growth oriented investments that can benefit from that tailwind.
When the wind dies down or turns choppy — when the fearful wolf shows up through war headlines, higher oil, or rising market volatility — we need the ability to row. That is when we rely more on risk management and small shifts in which types of investments we emphasize, rather than jumping in and out of the market.
Our job is to be adaptive and make small, thoughtful changes within a broad, multi asset plan. We add more to the parts of the portfolio that fit the environment the market is “feeding” at the moment, without betting everything on that environment lasting forever.
Why we use a multi asset approach
This is why we favor a multi asset approach instead of a single, simple recipe like “all stocks, all the time” or a fixed 60/40 mix that never changes.
A multi asset portfolio can include:
• A diversified mix of stocks, across different sectors and regions, so you can participate in growth themes like AI and digital infrastructure without being tied to just one area.
• High quality bonds and cash like investments, which can help cushion ups and downs and give us flexibility when opportunities arise.
• Real world assets such as energy, commodities, and gold, which have often been more resilient when inflation picks up or when oil and other commodity prices rise.
In practice, this means we don’t have to choose between “AI forever” and “energy crisis forever.” We can own both growth sensitive assets and assets that may hold up better if inflation or oil prices surprise to the upside. We can tilt the mix as evidence changes, instead of reacting emotionally to every new headline.
We don’t claim to know exactly how the Strait of Hormuz situation will play out, or precisely how powerful the AI wave will be over the next several years. What we do know is that your financial plan should not depend on either extreme: permanent euphoria or permanent crisis.
A multi asset, row and sail approach is our way of respecting both wolves.
What this means for you
For you as an investor, this comes down to a few simple ideas:
• Expect both fear and greed to appear in every market cycle. Neither is a permanent “new normal.”
• Be careful about stories that say risk has disappeared — or that opportunity has disappeared. Markets are almost never that simple.
• Focus on having and sticking with a portfolio that is deliberately diversified, that uses multiple types of investments, and that can be adjusted at the margins as conditions change.
We will continue to watch both the AI/data center story and the Strait of Hormuz situation closely. We’ll make incremental adjustments as needed, always grounded in your long term plan, your cash flow needs, and your comfort with risk — not in headlines alone.
You don’t get to decide whether the wolves exist. You do get to decide how you feed them.
Our commitment at Ford Wealth Management is to help you keep both wolves in balance, so that neither fear nor greed is steering your financial life on its own