For much of the history of the stock market, investing was primarily about individual stocks and bonds. Over the past few decades, however, macroeconomic developments have increasingly influenced markets. Significant events, whether related to central bank policy, geopolitics, or global trade, now affect nearly all stocks across the market, regardless of their individual stories. For investors, this means that building modern portfolios is less about finding attractive stocks, and more about making asset allocation decisions that are aligned with financial goals.
The human brain is excellent at finding patterns, a skill that has evolved to help us across many parts of life. However, it can also lead us astray when there is no real pattern at all, such as when we see shapes in clouds and ink blots. When it comes to investing, this is relevant because some patterns are important, such as the long-term relationship between the market and the economy, while others may be due to pure coincidence. Distinguishing between what makes for interesting trivia versus true investing principles is a challenging but important part of achieving long-term financial success.
April's performance is a reminder that markets can experience strong rebounds even in the face of ongoing investor concerns. Despite the continuing war in the Middle East, major market indices climbed to new all-time highs during the month. The S&P 500 gained 10.4% in April alone, one of its strongest monthly performances in history. On the surface, this echoes last year’s tariff-driven volatility and market rebound.
It has now been more than three-and-a-half years since the bull market began in October 2022. At that time, inflation was rising at its fastest pace in fifty years, the Fed was hiking interest rates, and ChatGPT was still a month away from being released to the public. Since then, the S&P 500 has more than doubled in value and the Bloomberg U.S. Aggregate Bond index has fully recovered.
For many households, a home represents not only where they live and raise their family, but also their largest financial asset, monthly expense, and source of debt. From a broader economic perspective, the housing market is deeply intertwined with consumer confidence and economic growth. So, while investor attention has been on geopolitics and market volatility this year, the fact that home prices remain near all-time highs continues to play an important role in financial planning.
The start of the year was positive for stocks and bonds, continuing the rally from recent years. This might be surprising to some investors since there were several periods of volatility driven by geopolitics and Federal Reserve policy. While headlines created short-term swings, including the S&P 500's worst day since last October, markets rebounded quickly. Within days, major indices reached new all-time highs, driven also by healthy corporate earnings that have supported portfolios.
Gold, silver, and other precious metals have rallied over the past two years, capturing investor attention. Gold recently surpassed $4,700 per ounce while silver now trades above $90 per ounce, marking historic milestones for both metals. This strong recent performance may lead some investors to wonder whether they should be investing in these assets. As with all investments, it's important to maintain a broader perspective to understand their history and how they fit into a well-constructed portfolio.
As former Senator Max Baucus once observed, "tax complexity itself is a kind of tax." While this is the case every year, this is especially true in 2026 as many significant tax policy changes create new tax and financial planning opportunities. From new restrictions on retirement catch-up contributions to expanded deduction limits, understanding these tax law changes is essential for making informed decisions in the coming year.
The strong stock market performance of the past several years has been positive for investors and their financial plans. At the same time, these recent successes can lead to unrealistic expectations when it comes to long-term financial goals. This is because investing and financial planning occur through all parts of the cycle, in both good and bad markets. So, while benefiting from investment opportunities and managing risk are important, it’s just as critical to set proper expectations grounded in history, analysis, and tailored financial plans.
The arrest of Venezuelan President Nicolás Maduro by U.S. forces represents an unexpected and significant geopolitical event. As has been widely reported, the U.S. military successfully conducted an operation that detained Maduro on charges related to drug trafficking and corruption. President Trump stated in a press conference that the United States will "run" Venezuela and work to expand its oil production.
Rainer Wealth Management
390 Diablo Road, Suite 202 | Danville, Ca 94526 | (925) 217-4280
