2026 Second Quarter Commentary Report
Market Review
Global Market Performance
Global Equities had an excellent second quarter with all broad categories appreciating. This is another example of the benefits of sticking with an investment plan and not getting spooked by the negative bias in the media. While the U.S. market is expensive, it is worth noting that the earnings growth of U.S. companies is also high. This past quarter marked the second-straight quarter of earnings growth over 20% and the seventh-straight quarter of double-digit earnings growth (1).
Market Returns (Q2 2026)
U.S. Stocks: +15.44% Russell 3000 Index
International Developed Stocks: +10.22% MSCI World ex USA Index [net dividends]
Emerging Markets Stocks: +24.05% MSCI Emerging Markets Index [net dividends]
Global Real Estate Stocks: +10.76% S&P Global REIT Index [net dividends]
Bond Markets
Interest rates rose slightly in the U.S. and Japan as gas prices and inflation expectations increased. Interest rates decreased slightly in most other countries, leading to higher returns for international bonds.
Bond Returns (Q2 2026)
U.S. Bond Market: +0.67% Bloomberg US Aggregate Bond Index
Global Bonds (excluding the U.S.): +1.77% Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]
Perhaps the big news this quarter was the SpaceX Initial Public Offering (IPO). SpaceX now trades at a valuation of roughly $2 trillion and over 100 times revenue. This is despite the company recording a net loss of $4.94 billion last year. Open AI and Anthropic are also expected to have large IPOs this year.
While we certainly understand excitement regarding IPOs, it’s worth remembering why companies issue stock. The first is to raise money. The second is to create a market for insiders to sell shares. Making you wealthy is not on the list. The companies bringing IPOs to market and setting the price are getting paid to do so. As such, the short-term performance of IPOs is generally less than desirable. While some indexes are adding SpaceX, we prefer funds that exclude IPOs until enough time has passed for reasonable price discovery.
Planning Perspective
While we welcome strong performance, we should avoid getting overly excited. Volatility can return at any time, so we are maintaining our disciplined approach: rebalancing portfolios, trimming select stock positions, and adding bonds to keep risk levels aligned with your plan. This is easiest in tax-deferred IRAs, where capital gains taxes are not a concern. In portfolios held primarily in taxable brokerage accounts, we rebalance as tax-efficiently as possible, though realized capital gains this year are generally above average. In short, we believe it is wise to make hay while the sun shines. However, we know that when it comes to personal finances, “normal” is just a setting on the washing machine. The right answer is different for everyone. We’ll reach out if we have any questions.
The 530A IRAs, aka “Trump Accounts,” are now available. This is an IRA for those under age 18. Families can contribute $5,000 per year and the US government will fund it with $1,000 if your child is born between 2025 and 2028. While we wouldn’t want to leave the $1,000 on the table, there are better options already available. Withdrawals are not permitted until age 18, at which point the account turns into a Traditional IRA. Contributions do not come with a tax deduction, and withdrawals are taxed as ordinary income. Tax-deferral, which is generally of lesser concern for minors, is also offered with accounts that have more flexibility, such as 529 accounts and to some extent UGMA accounts.
Personal Perspective
Back in 2018 my wife and I inherited a very well-trained, 60-pound German Shorthaired Pointer. I had always wanted one until I saw just how much energy they had. I knew they needed exercise so I would take her on long bike rides. Even at the age of 9, she would run 5 miles straight at 22 miles an hour. And that’s without me pedaling much of the time…
About a year after we had to put her down, we started getting the itch to get another dog. My wife sent me listings of the various dogs that needed adoption and I casually gave a thumbs up to one… A week or two later we found ourselves driving up to Conway to pick her up. The rescue agency said she was a Blue Picardy Spaniel, a French breed known for being calm, a welcome relief.
As usual, fate would have different plans. As she got bigger, and bigger, she stopped looking like a Blue Picardy Spaniel and we were getting frustrated adjusting to puppy life. It turns out that Blue Picardy Spaniels and Blue German Wirehaired Pointers look almost identical as puppies. Once we figured out her breed, we knew how much exercise and engagement she needed. Knowing what you’re dealing with makes things easier.
In investing, knowing what you’re dealing with is imperative. The stock market has a great deal of horsepower to build wealth over time. But it can have dramatic swings from time to time. During the financial crisis of 2008-2009 and the tech bubble of 2000-2002, the U.S. stock market dropped by about half. I don’t mention this in anticipation of such an event, but rather as a reminder to pay attention to the risk level of portfolios. It’s been a great few years and we don’t want to get lulled into complacency regarding risk. It’s also worth noting that these periodic drops are not a bug, but rather a feature of the financial system. They offer opportunities. We’ll trim stock positions as the markets go up and we’ll be buying when they drop.
So far, our new puppy is excelling at exactly what she is bred to do. We just have to let her do it. She is a very effective alarm system and is wonderful with the kids. We run about two miles in the morning and two in the evening. Outside of the office, you can usually find me at the dog park, repeatedly throwing a tennis ball as far as I can, over and over and over again.
Thank you for trusting us with your financial future. It’s a responsibility we take passionately. We’re especially honored when clients extend that trust by introducing us to family, friends, and colleagues. If you know someone who could benefit from the same care and guidance, we would appreciate the opportunity to be introduced. Your continued support means the world to us, and we’re truly thankful to have you as a client.
Myles B. Brandt, M.S., CFP®
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.
Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net dividends]), Emerging Markets (MSCI Emerging Markets Index [net dividends]), Global Real Estate (S&P Global REIT Index [net dividends]), US Bond Market (Bloomberg US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]). S&P data © 2026
S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2026, all rights reserved. Bloomberg data provided by Bloomberg.