As America celebrates its landmark 250th anniversary, the equity markets provided their own version of mid-year fireworks. Following a challenging first quarter that saw the S&P 500 decline -4.3%, the index reversed course sharply in Q2, surging +15.2% to finish the first half of the year up +10.2%.
While it was captivating to watch the display—particularly the historic SpaceX debut, the largest IPO in global history—we are focused on what remains once the smoke clears. The speculative enthusiasm surrounding AI continues, shifting most recently to computer memory providers. When we evaluate the extreme cyclicality and valuations of these high-flying names, we see reason for caution rather than participation.
Instead, we see opportunities in the quieter corners of the market. Defensive, resilient businesses within the Health Care and Consumer Staples sectors remain attractively priced. This is where our capital remains anchored.
Fireworks displays are awe-inspiring but short-lived. That’s not how we want to steward your investments. Instead, we’ll take the steady (some might even say boring) approach to long-term compounding with low-volatility, dividend-growing, value stocks.
As we celebrate America250, we’re reminded that a long-term approach, with the right underlying philosophy, can yield amazing results.
As always, we appreciate your continued trust and partnership. Our singular goal remains the delivery of risk-managed strategies that protect and grow your wealth in all market environments. If you would like to review your portfolio, discuss your financial goals, or explore our investment philosophy in more detail, please contact any member of our team to schedule a conversation.
Data Sources: Koyfin, Black Diamond, Allied Calculations