Investors often use major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average as a way to understand how financial markets are performing. While this is a helpful place to start, the reality is that the stock market is made up of many thousands of companies, each affected by economic and market trends in unique ways. To understand these trends, stocks are often grouped into sectors, geography, and by other characteristics such as the size of the company or the style of investment. Each of these groups can play an important role in long-term portfolios.

August was another example of the idea that strong markets do not require a picture-perfect backdrop. While there continues to be uncertainty around oil prices, the Fed, new tariffs affecting global trade, and interest rates that are at their highest in decades, many positive factors drove broad market indices higher.

The Nobel Prize-winning economist Paul Romer once wrote that "economic growth springs from better recipes, not just from more cooking."1 This key idea in economics is that raising our standard of living is not just about adding more workers or more equipment, but about enabling each worker to produce not only more goods and services, but higher quality ones as well.

Since new tariffs were announced last year, global trade has been a source of uncertainty for financial markets and the economy. In February, the Supreme Court ruled that the original “Liberation Day” tariffs were illegal, resulting in a wave of refunds to businesses that are now well underway.1 New tariffs have been implemented since then under different laws, including recently with close trading partners such as Canada.