Jeff Mortimer has spent 35 years dating market cycles, and his model puts this one at a midcycle bull market about a year old, out of the 2022 bear.
The worry list is long — a Federal Reserve that may be about to raise rates, oil near $100, the Iran war, midterms. His argument is that a midcycle bull is precisely the phase that shrugs that off, and that the label changes what an investor should do with a dip.
"The wall of worry is alive and well."
Mortimer is chief investment officer at Elyxium Wealth, has worked at Bank of New York Mellon Wealth Management and at Charles Schwab, and the host put the money he runs at well over a billion dollars.
The full segment is covered here so you can skip it.
Here are the 9 calls that matter.
👤 Guest: Jeff Mortimer, Chief Investment Officer at Elyxium Wealth, previously at Bank of New York Mellon Wealth Management and Charles Schwab
🎙️ Host: Chuck Jaffe, financial journalist and host of Money Life
📰 Published: 14 September 2026 on YouTube (Money Life with Chuck Jaffe)
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ length not available
Key Takeaways
The cycle label is the decision, not the forecast — a midcycle bull tells you to buy weakness
His nine defined market states each imply a different response to the same price move
The bubble risk he watches is in earnings, not in price-to-earnings multiples
Multiples fell through 2026 because earnings rose faster than prices
Midcycle bull markets have historically run 18 to 24 months, and this one is about a year old
6% risk-free is where he expects investor behavior to change
His old boss's line, 30 years ago: 6% will pull money from the moon
The pace of a rate rise matters more than the level
2022 hurt because the market could not tell where rates would stop
Diversify away from the AI names toward the companies that use AI
Revenue per employee becomes the measure of who is actually getting more efficient
Investors who keep buying dips into a bear phase become "the last dip"
Markets do not die of old age; they are murdered by the Fed
1. A Midcycle Bull Market
Jaffe opened on the economic cycle and how much longer it can run. Mortimer answered with the framework he has spent his career building.
He has been doing this about 35 years, and started out trying to work out where markets and economies sit in their cycles. What he has done since is make that judgment rigorous and quantitative, combining economic data streams with market data streams.
The output is a label, and the label is the answer: "I have I think good news for our listeners that we remain in a midcycle bull market, a bull market that started out of the 2022 bear and that continues as we sit here today."
Why the label matters to a listener is that it changes what you do with weakness. The adjectives he uses for this phase historically are resiliency, an ability to take bad news and shrug it off, and an ability to take good news and rally hard.
"What I like to think about this is that the market has an upside bias to it."
That does not make it unshakeable. He named tariff announcements and a Federal Reserve that might tighten as reasons the market can be volatile in the near term.
The midterms are the known unknown he singled out: the date is fixed and the outcome is not, and history teaches softness going into them followed by a rally once the unknowns are behind.
His position follows from the label. "So bottom line for me, Chuck, is continue to be long biased, continue to lean into weakness, continue to not ignore, not whistling past the graveyard." The Iran war and a high oil price are real issues — and, in his phrase, understood and priced in: "None of those are not known to the market, right?"
The support underneath it is earnings. Year to date in 2026, he said, multiples have gone down because the earnings underneath them rose so much.
2. A Bubble in Earnings
Jaffe pushed on the arithmetic of next year: at some point the year-over-year comparisons stop looking good, and great earnings get punished for being smaller than last year's.
Mortimer went back to the cycle first. The bull market will eventually end; the question is what ends it.
The firm's internal answer is not the one most people watch. "And what we've discussed internally at our firm is not necessarily a bubble within PE multiples, but perhaps a bubble in earnings themselves."
The consequence is that a reasonable multiple is no protection. "So yeah, you may not be paying a high multiple for those earnings, but if those earnings decrease significantly, the market will decline." He put a correction 9, 12 or 18 months out as clearly possible.
The clock he is watching is the length of the phase, not the level of the index. Midcycle bulls historically last 18 to 24 months, and this one is about a year old.
3. Drive to Your Headlights
Asked how far ahead an investor should try to see, Mortimer gave the rule he uses and where it came from.
His working horizon is 12 to 18 months, and he has settled on it deliberately over his career as the distance at which he can position himself and clients usefully.
The origin is his father teaching him to drive at night. He was nervous because he could not see a mile down the road, and was told he did not have to — use the high beams and drive to the end of the headlights. Jaffe's verdict: "Drive to the end of your headlights is pretty good advice."
Inside that window the positioning stands: equity exposure, exposure to AI, inside a balanced portfolio, glass half full. He was explicit that it will not stand that way forever, and that monitoring the turn is what clients pay the firm to do.
At the far edge of the window he expects the posture to flip: "I bet we are at a point where you would want to be selling strength." More defensive, and, as his father said, they will cross that bridge when they get there.
4. Diversifying Around AI
Jaffe's next question was practical: in a market where almost every stock is two degrees from AI rather than six, what does diversification even mean?
Mortimer's answer is that the market has already started doing it. For the first time since AI arrived as a market force two or three years ago, he sees the market broadening.
"You have a market that has broadened small cap, midcap." His phrase for what has happened to the largest technology names is that the Magnificent Seven have moved to the back of the bus.
He agreed with the premise that the newly favored names are still AI-adjacent, but drew the distinction between building AI and using it. Software-as-a-service companies were punished on the view that AI makes what they sell less necessary.
The metric he expects to matter is revenue per employee, as the standard measure of how efficiently a company is run.
"So like everything else, it may not be the AI firms anymore, but those that are using AI and therefore can become more productive, higher profit margins, greater earnings, either the same people doing more or fewer people doing an equal amount."
His instruction is explicit: "I think now is the time to diversify from those types of names."
5. Neutral on International
Jaffe asked where he sits between domestic and international, and whether the international case is a valuation story or a currency story.
"We are at neutrality." The firm measures the benchmark as the market-cap weighting of the world and holds close to it, so clients are positioned internationally rather than absent.
Emerging markets are not a way out of the AI trade. He named South Korea and the semiconductor exposure there, and said not to be surprised if emerging markets move around with AI itself.
Developed international is where Jaffe's distinction bites, and Mortimer agreed it becomes a sector and style question: more industrials, more financials, and a lower technology weight. Those sectors are the primary drivers, with the possibility of benefit if those companies use more AI.
The currency leg is a condition, not a constant. "International investments do best especially relative to US when the dollar is weakening in a weakening environment."
What diversifying abroad buys, in his framing, is distance from AI, a wider set of managements, and typically a lower-valued asset.
6. The 6% Threshold
Jaffe asked whether there is a number — on Treasurys, on oil, on inflation — at which Mortimer would lose faith.
He said two things have to be read together: the level, and the pace at which the move happens.
2022 is his example of pace. Rates rose rapidly, the market could not tell where they would stop, and so it discounted by compressing price-to-earnings multiples. What is happening now is a much slower bleed higher.
Some of that, he said, is tied to oil and the Iran war, and to how long the conflict runs. The market has had too many predictions that it ends tomorrow and now treats it as a persistent near-term issue.
The inflationary chain he traced runs through freight: oil back around $100 a barrel, diesel at all-time highs, transportation costs up, costs of goods up in retail stores, pressure on the consumer.
The level he watches came from a boss three decades ago. "My old boss, this is 30 years ago, he said 6% will pull money from the moon." Back then 6% could show up at the short or middle of the curve; now it is a question for the long end, with the 30-year still in the low fives.
"I think when 6% is dangled in front of oneself in a risk-free way, it's I think will change investor behavior." If you can get 6% and sleep like a baby, why not pull money out of risk assets.
His conclusion is that the bull market survives a couple of Fed hikes and a long Treasury above 5% — what it would not survive is speed. "It's the shocking rise in rates which can put you on your heels."
Jaffe's summary of the answer was that Mortimer had just marked where the pan stops being non-stick.
7. The Wall of Worry
Mortimer accepted the framing and used it to describe the psychology the phase runs on.
He has defined nine market states. The one the market is in now is midcycle bull, and resiliency is one of its markers. The other is the mood: "the default attitude of investors is worry."
"The wall of worry is alive and well." He was careful to date the claim — the same thing will not be true six months from now, and was not true 18 months ago, but it is true today.
His evidence on the day was price behavior: markets pushing higher with some relief from oil and rates and an inflation print, and sitting one or two percent from all-time highs.
The opposite state has its own name, and it is the one that catches people. "Is the side that says Wall Street climbs a wall of worry, it falls down the slope of hope."
His warning is that the habit investors have learned belongs to the other phase: "Buying on the dips is most assuredly slope of hope stuff."
He said the honest version is not whistling past the graveyard but understanding that there is still time to make money before turning cautious.
8. Becoming the Last Dip
Jaffe asked what happens at the turn, when people stop buying dips and how fast the glass empties.
Mortimer's answer is that some people will be fooled, because the price action looks identical in both phases and only the correct response differs. A buyable dip and a dip you should be selling into are the same chart.
In a bear phase the required reaction is 180 degrees from the one that works now — selling strength, and sometimes selling weakness.
The failure mode has a name he gave it: "You'll buy the dip and then the joke again to those people is you become the last dip, right?" You spend your capital calling the bottom, the stock does not recover, and the person who sold it to you won the transaction.
Jaffe's reaction: "You become the last dip. That is everyone's nightmare."
He repeated that the switch is not due yet, and that eventually the mindset has to move from opportunistic dip buying to selling strength and going underweight risk assets.
9. Murdered by the Fed
Jaffe closed on age: a fourth straight year of double-digit gains, and whether rallies get old.
"Yeah, markets don't die of old age, right? They are typically murdered by the Fed. That is the way most markets end." There is no pitch clock; they end when the Fed wants them to.
He put the odds of a hike at 98% on the math as it stood, to combat inflation — and said continued hikes are the textbook way bull markets end. A lower oil price, including from the Iran war losing force, is what would take the pressure off.
On duration, he split the difference. A bull market that began in 2022 running the typical four, five or six years means this is not borrowed time — but the clock is always ticking in his head. He also referenced four-year presidential cycles, the midterms, and 36-year cycles in markets.
The scenario he wants people prepared for is the AI trade proving overhyped, less profitable or less productive than expected.
His calibration against the last one: "I've lived through the tech bubble and burst. That was again 100 times earnings on the Nasdaq 100. We are not there today."
The behavioral point he ends on is about what happens when a story stops paying: "But there is still some issues going on where human beings in general pay a lot for mystery. We pay a lot for hype."
"And if that hype does not measure up to our beliefs, then we take right we take it personally and we'll sell our holdings and first one off the boat wins."
Bonus Insights
This was Mortimer's first appearance on the show. Jaffe said he could not work out how that was possible given Mortimer's time at Bank of New York Mellon Wealth Management and Charles Schwab, and put it down to the show's rule limiting how often any one firm appears.
Jaffe spelled the firm's name on air twice because of how it is written, and pointed listeners to the insights it publishes.
In the closing wrap Jaffe gave his own verdict on the day's three guests, calling Mortimer's a great debut and inviting listeners to say whether they want him back — he was explicit that audience reaction colors how often a guest returns.
He also flagged that the show's schedule is about to change: he and his wife are traveling to care for their grandson Declan for about two weeks, so the run will mix pre-recorded book interviews and evergreen segments with live material.
The money life quote of the day came from Whitney Tilson, a repeat guest: "While everyone would love to have that perfect portfolio of stocks that can be bought and held forever, it usually does not work out that way. Markets, technology, and businesses change too quickly to put portfolios on autopilot." Jaffe agreed and added his own standing sign-off, that the best thing you can do for your money is not worry too much about it.
Mortimer's bottom line is that the label on the cycle is the decision: while this stays a midcycle bull market, weakness is for buying and the risk to watch is a break in earnings rather than a stretched multiple — and the level that would change his mind is 6% risk-free on the long end, arrived at quickly.
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: