“USA 250, THE WORLDS GREATEST ECONOMY”
WSJ
The United States of America has prospered for 250 years. There have been challenges, wars, multiple pandemics and many setbacks. But they were overcome. The Declaration of Independence was signed on July 4, 1776, and set the path forward for our great nation to prosper by declaring: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. “Happy Birthday America.”
Happy 13th birthday to the great secular bull market that was born in 2013 several years after the Great Financial Crisis. As I highlighted in my 2025 Third Quarter Insights, it was important not to jump off the roller coaster during the “Tariff Tantrum” of spring 2025 and again at the lows in spring of 2026 when we experienced similar market volatility with the Middle East conflict. During the Middle East conflict, I wrote in my 2026 Second Quarter Insights that I didn’t have any idea when this conflict would end, but that eventually it would end. Looking at the chart of the S&P 500 below, the markets might have figured it out as the S&P 500 hit an all-time high in early June. Secular bulls like the one we are experiencing in real-time today, are often born out of great technological innovations like the Fourth Industrial Revolution. These periods of great technological innovation are generally accompanied by GDP growth, strong labor markets, strong consumer spending, and great household wealth creation. This is what we are seeing today. We have baby boomers with $89 trillion in net worth, household net worth at a record $170 trillion, and consumer spending at 2.2%. This extraordinary growth also comes with challenges, with inflation being one of the largest headwinds. The Federal Reserve Board and their new chairman might need to deal with this problem, and it will not be an easy problem to deal with. Dealing with inflation is often not market friendly. As we witnessed during the period of January 2022 through October 2022, the markets experienced an increase in volatility and a drawdown in the S&P 500 of 25%.
Secular bull markets often have multiple drawdowns of 10%, 15%, 20%, or greater in their lives. These short and violent cyclical bear markets live within large secular bull markets. So, it’s important to work with your wealth advisor to help navigate current challenges, monitor your progress against your wealth plan, and most importantly, help you remain disciplined through good as well as challenging market environments.
Source: FACTSET
Below are a few short-term concerns that we are watching as we head into the third quarter of 2026.
- Kevin Warsh, New Federal Reserve Chairman
- Inflation
- Volatility leading up to midterm elections
- Volatility associated with geopolitical risk
- Margin debt at all-time highs
As we navigate through the various challenges of creating wealth, managing retirement, or simply planning for your future, it’s important that we are in touch to review your plan and adhere to your goals. As always, your confidence and trust in us are much appreciated, and if you have any questions, concerns, or if you know a friend, co-worker, or family member who could benefit from the guidance we provide, please do not hesitate to reach out.
Thank you,