Quarterly Client Letter – Q2 2026
Q2 – 2026
Dear Clients,
If you only followed the headlines last quarter, you would think we were on the verge of something between a recession and an outright crisis. The US & Israel taking military action in Iran. Oil prices spiking. Inflation potentially rearing its head again. Interest rates rising in response. Stress in the private credit market. Fear that AI will lead to massive unemployment. Concerns of an AI bubble. Lofty equity valuations. Extreme market concentration. And depending on the day, the economy either looks resilient or like it’s starting to crack. That’s a lot. And yet, if you’ve been investing for any meaningful period of time, this probably feels familiar. Because it is.
Markets don’t rise when everything looks perfect. They rise in spite of uncertainty. There’s an old saying that markets climb a wall of worry. Right now, there are plenty of bricks being added to that wall. But that’s almost always the case. There is never a shortage of reasons to be concerned about your investments.
The biggest shift last quarter wasn’t the data. It was a reset of expectations. Coming into 2026, markets were pricing in a relatively smooth path: falling inflation, lower interest rates, and steady growth. Instead, we’ve gotten something messier. When expectations change, markets adjust – often quickly. That adjustment can feel uncomfortable, but it’s important to separate discomfort from danger. Volatility does not equal permanent loss and uncertainty does not equal crisis. It’s just part of how markets work. It’s the price of admission.
The biggest risk to long-term investors isn’t any of the scary things I mentioned before. It’s behavior. It’s the temptation to pull back the reins when markets feel uncertain and react to headlines instead of sticking to a plan. We’ve seen this play out over and over again. Many of the most important conversations we have with clients happen in moments like this when uncertainty is high and the temptation to do something feels the strongest. Markets tend to fall faster than they rise. They tend to bottom when the news still looks bad. And they recover long before it feels comfortable to get back in. If you wait for things to get better, you’re usually late. That’s not a theory. It’s how markets behave. Our job isn’t to predict where markets go next. It’s to help you avoid the costly mistakes that are easiest to make when markets feel scary.
We can’t control markets, but we can control how we position and plan around uncertainty and volatile markets. In fact, periods like this often create some of the best planning opportunities:
- Tax-Loss Harvesting – Volatility can create opportunities to realize losses in taxable accounts – helping offset gains and improve after-tax outcomes while staying invested.
- Roth Conversions – Lower market values can make Roth conversions more attractive, allowing assets to move into tax-free accounts at a reduced cost.
- Rebalancing with Discipline – Volatility creates natural imbalances. Rebalancing allows us to systematically trim strength and add to areas that have become more attractively priced – without relying on predictions.
None of this is reactive. It’s all intentional, and over time, these decisions tend to matter far more than trying to guess where markets go next.
As we prepare to wrap up tax season, we will begin gathering client’s tax returns and analyzing them for strategic planning opportunities. Your tax return often reveals planning opportunities that don’t show up elsewhere – whether that’s improving tax efficiency, identifying gaps, or making small adjustments that can have a meaningful impact over time.
It’s easy to look at the current environment and feel like uncertainty is elevated. But zoom out, and you’ll see a consistent pattern. There is always something to worry about. Always. And yet, despite all of it, markets have continued to move higher over time – not because uncertainty disappears, but because progress doesn’t stop. The investors who succeed over time aren’t the ones who avoid uncertainty. They’re the ones who learn to operate within it – who stay invested, stay disciplined, and take advantage of opportunities when others are hesitant. And that’s exactly what we’re focused on. Executing a disciplined plan consistently and with intention.
We appreciate the trust you place in us and take the responsibility seriously. If you have questions or just want to talk through what’s happening in markets, we’re here.
Garet Strange, CFP®
