Anthony M Calabrese, CFP® 💵💵

At the start of this year, we were in the lonely camp that the Fed likely wouldn't cut, as we saw stickier inflation and likely higher rates coming (we've been calling this the year of inflationary growth) Now many have come around to this and expect the Fed to hike. Well, we continue to see reasons to expect higher rates @sonusvarghese compared now vs the late '90s and found that nominal GDP was about the same (ballpark 6%), but the 10-yr yield avg was close to 6% in the late '90s vs less than 5% today Not to mentioned we had a fiscal surplus back then (deficit was 1% of GDP) vs a huge deficit today (close to 6% deficit as % of GDP, unheard of in non-war times) The bottom line? Stay overweight equities, underweight bonds, and diversify your traditional bond holdings with things like managed futures, gold, hard/real assets, maybe if a tad of Bitcoin.

The S&P 500 gained more than 10% in April. It is normal to see somewhat muted returns the next three months, but going out a year? Higher 85% of the time with well above avg returns. Will this time be different?

We came into this year and said the S&P 500 would gain 15% in 2026. In Feb/March, we noted many times to be on the lookout for a banana peel sell-off, but not to panic. We had a regular 9.1% pullback and many previous bulls cut their targets and turned bearish. We never did and doubled down on a 15% year, even when the S&P 500 was down 5% YTD. In late March we said that things had gone to far and to expect a big rally and we then had a historic Q2 rally. We noted many times that late June tends to be weak and not to panic, as this was needed to keep the surprise summer rally going. With new highs happening all over the place now, we don't think the surprise summer rally is over just yet, but we likely will have some usual Aug/Sept/Oct midterm year jitters down the road. As of now, we don't see a 10% correction happening though, probably more in the 5-8% range. We clearly don't get it all right, but I'd put what the @CarsonResearch team has said up there with anyone else.