This past 18 months, the marketplace has seen more distinct elements than we have seen in years. First, we saw the introduction of tariffs, court pullbacks, constant changes in tariff levels, and their reintroduction. Secondly, market concentration—where the 10 largest stocks comprise approximately 40% of the S&P 500, and 3 companies represent 29% of the MSCI Emerging Markets index—has propelled stock market performance. Lastly, inflationary pressures from geopolitical conflicts and tariffs have redirected funds away from other areas of the economy.
While some investors, as they often do in bull markets, may feel like investment professionals, they could be overlooking the inherent risks of concentrated investing. Fundamentals, business trajectories, and valuations change over time. History has shown us that concentrated markets don’t last forever, especially as new developments unfold and older business models weaken. The broad diversification in your portfolios helps to mitigate significant swings from stock concentration.
The bull market continues and appears to have more legs, but a slowdown of growth may be expected going forward. A bull market, which historically has averaged 4.4 years, is defined as the period from a market low (following a drop of 20% or more) to the next record high. A bear market occurs when the market has fallen 20% or more from its highs. The average bear market has historically lasted 11.1 months. As the chart below reveals, bull markets since 1942 far outnumber and outlast bear markets, which is why a disciplined, long-term approach has historically been rewarded.
Figure 1: History of U.S. Bear & Bull Markets (Daily Returns 1942–2026). Source: First Trust, Bloomberg.
It’s important to maintain this long-term perspective, especially since we have recently experienced real rates of return (above inflation) that are well above historical averages. Periods of above-average returns can help cushion us for eventual downturns. That doesn’t mean a wholesale change in strategy; rather, it suggests tweaks and rebalancing are needed to help navigate through the cycle. Our investment management team has positioned portfolios in a broadly diversified manner to help us manage changing market conditions.
Make sure you keep an adequate cash reserve to weather any market downturns that may lie ahead. It is equally important for you to keep us informed of any changes in your situation or time horizon that might warrant an adjustment to your overall allocation.
Lastly, I want to address the rise in scams and phishing. The level of sophistication in digital impersonation has grown dramatically. It’s getting harder to determine the legitimacy of emails, calls, and texts. A few quick rules:
- Do not answer any calls from unknown sources or numbers you don’t recognize.
- Do not click on any links in emails or texts. Always go directly to the source website.
- Never give out any personal information unless you initiate the contact and have verified you are contacting a verified source.
- Never give anyone money in advance for anything. There is no free lunch. If it sounds too good to be true, it almost certainly is.
- If someone tells you not to tell your family, friends, or advisor something, hang up immediately. It’s a scam.
- Never be in a rush to do anything. Take a deep breath and take time to think through any course of action. If unsure, please contact a close friend, relative, or advisor. Speed, pressure, and emotion are a scammer’s primary tools to get you to act.
If you suspect you are a victim of fraud, please immediately change your passwords, contact your financial providers and advisor, and contact the authorities. We can also assist in guiding you to appropriate federal reporting resources.
We are seeing a rise in scam attempts targeting investors, and staying vigilant will save you money and aggravation. Our firm and Fidelity have procedures in place to help manage risk and reduce potential exposure relating to your accounts. Please keep us informed so we can stay on top of any issues that arise.
Sources:
First Trust, Bloomberg. Daily returns from 4/29/1942 – 6/30/2026. Past performance is no guarantee of future results. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. This chart is for illustrative purposes only and not indicative of any actual investment.
Global equities A unique market moment and the case for active judgment
