Archive for category: Client Letters

February 4, 2026

Dear Valued Investor,

Other than the historic volatility in gold and silver prices, the biggest news for markets in January may have been the nomination of Kevin Warsh as the next Federal Reserve (Fed) Chair. We anticipate a Warsh-led Fed will be able to steer the Federal Open Market Committee (FOMC) toward two rate cuts later this year, with help from easing inflation pressure. Remember, the Chair just gets one vote on the 12-member FOMC, so the health of the labor market and the path of inflation will be critical.

Warsh’s track record of flexibility on interest rate policy, his credibility with Fed officials, and prior advocacy for central bank independence should help ease concerns about the President’s influence. However, his preference for a smaller Fed balance sheet, now over $6.6 trillion, and his emphasis on fiscal responsibility could complicate the Treasury’s efforts to refinance government debt at lower rates. This dynamic will be important to watch because the U.S. government’s fiscal situation is not on a sustainable path.

One of the reasons Warsh is likely to push for lower rates, despite still-elevated inflation, is productivity gains from AI can help the economy grow faster with less inflation. Recent data shows U.S. nonfarm business productivity rose 4.9% in the third quarter of 2025, strong enough to counter inflationary pressures even amid solid economic growth. Technology and more efficient processes enable firms to produce more with fewer hours worked, a key reason economic growth will likely help push stocks higher.

AI investment is also helping drive a strong fourth quarter earnings season. S&P 500 companies are on track to deliver a fifth consecutive quarter of double-digit earnings growth. While this is driven mostly by the tech sector’s 30% earnings increase, keep in mind industrials are tracking toward 25% earnings growth. Several leading companies have cited tangible benefits of AI during earnings season, including Bank of America, Meta, and Costco. Strong earnings can help solidify the floor under stock prices, while cooling inflation and stable interest rates can help raise the ceiling by supporting higher valuations.

Looking ahead, the backdrop for stocks remains favorable. Massive AI investment is driving gains in productivity and earnings. Consumers will get tax refunds associated with the One Big Beautiful Bill Act starting this month. Positive stock market performance in January often bodes well for annual returns, though past performance does not guarantee future results. And increased participation in this bull market is encouraging — the average stock has outperformed the S&P 500 Index over the past three months*.

AI scrutiny, deficit spending, and geopolitics remain key risks. New Fed Chairs are often tested by markets, and midterm election years tend to be more volatile. Don’t let any volatility that may come along shake your confidence. It will not shake mine. I believe volatility creates opportunity. Stay invested and diversified.

As always, please reach out to me with questions.

Thank you for your continued trust.

Warmest Regards,

Wayne Rigney

Important Information

* The average stock is the equal weight version of the S&P 500. Return for the equal weighted S&P 500 over the past three months (since 11/03/25) is 6.7% vs. 2.1% for the regular S&P 500 over that period.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of February 4, 2026.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

This research material was prepared by LPL Financial, LLC.

RES-0006659-0126 | For Public Use | Tracking #1058651 | #1058652 (Exp. 02/2027)

December 9, 2025

Dear Valued Investor,

LPL Research is pleased to present Outlook 2026: The Policy Engine. Their annual update offers a thorough analysis of the economy and markets, highlighting potential implications for you. I’m pleased to bring you a few of the key highlights today.

The year 2025 offered a clear illustration of today’s prevailing market regime — one that has been shaped less by traditional fundamentals and business cycle dynamics and more by fiscal and monetary policy. While policy has always influenced markets, its role has increasingly grown. What does this mean as we look ahead to 2026?

In an environment where policy decisions are one of the most powerful forces steering market direction, LPL Research believes patience is essential. Avoid overreacting to short-term sentiment swings, as policy- and momentum-driven markets tend to produce sharp price fluctuations — which can challenge our behavioral biases. We saw this in 2025, when stock prices swung from policy-induced lows to momentum-driven highs.

The good news: LPL Research anticipates policy will remain a net tailwind for markets in 2026. Short term interest rates are likely to continue easing as economic growth moderates and inflation stays contained. Corporate earnings may provide support, while core bonds quietly offer value (and should benefit from a more dovish Federal Reserve). In addition, given correlations can spike in policy-driven markets, investors may want to consider non-correlated alternative investments as part of a diversified approach.

Several key themes will likely continue shaping the landscape in 2026. Equity markets should remain resilient but vulnerable to volatility, while a fragmented economic backdrop limits clear trends in bonds. Policy decisions in Washington will remain a dominant force, influencing sentiment. The post-pandemic cycle is still distorted, with growth steady yet uneven, inflation persistently above target, and labor markets gradually softening. Add to this the effects of massive fiscal spending, an AI-driven capital investment boom, and more, and the result is an environment that defies traditional patterns. In this setting, diversification and agility are critical.

These are just some of the insights you’ll find in Outlook 2026: The Policy Engine. To get more, including considerations and potential action steps we can discuss, visit go.lpl.com/investoroutlook.

Wishing you a safe and enjoyable holiday season. As always, please reach out to me with questions.

Sincerely,

Wayne Rigney

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of December 9, 2025.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

This research material was prepared by LPL Financial, LLC.

RES-0006041-0925 | For Public Use | Tracking #830455 | #830456 (Exp. 12/2026)

December 3, 2025

Dear Valued Investor,

Stock investors were rewarded for staying the course in November as broad stock market averages recovered from a mid-month dip to end near record highs. The comeback extended the S&P 500 Index’s streak of monthly gains to seven – something to be thankful for alongside the arrival of the holiday season. Increasing confidence in Federal Reserve (Fed) rate cuts was a key driver, but renewed confidence in the economic and corporate profit outlook and artificial intelligence (AI) investment certainly played a role, in our view.

As December begins, markets will continue to take directional cues from the job market, which will be key to preserving consumer spending during the important holiday shopping season. We expect slower but still positive job growth as government data delayed by the recent shutdown fills in. The approximately $130 billion in annualized incremental consumer tax cuts from the One Big Beautiful Bill Act (OBBBA) will start flowing in February 2026, not far off. The White House has also pivoted toward tackling affordability challenges. The K-shaped economy — where upper-income folks enjoy rising asset values while those living paycheck-to-paycheck struggle — remains a challenge. Policies to help lift the bottom half of the “K”, perhaps through the housing market, may help shore up the overall consumer spending picture.

As U.S. consumers hang in there, corporate America is thriving. The just-completed third quarter earnings season underscored companies’ ability to clear a higher bar. More than 82% of S&P 500 companies beat consensus earnings targets, the highest rate since at least 2009. Earnings grew 13%, extending the streak of double-digit increases to four quarters. Profit margins unexpectedly expanded despite increased tariff costs, supported by disciplined cost management and productivity gains. And management teams generally signaled confidence in demand, causing analysts to lift earnings estimates for 2026. Corporate America’s resilience reinforces the case for maintaining equity exposure in line with long-term targets.

As we prepare to turn the page to 2026, several factors warrant close attention. The Fed’s policy trajectory remains central, with inflation trends and the labor market guiding the central bank. While a rate cut is now fully anticipated in December, the number of cuts beyond that will hinge on incoming data. Other factors to consider as investor attention shifts to the year ahead include increasing scrutiny around AI investment, midterm elections, the U.S. dollar, and ongoing geopolitical threats.

Against this backdrop, investors may benefit from prioritizing diversification and risk mitigation in 2026. Bouts of volatility are likely and may present attractive entry points for disciplined investors. Opportunities exist in sectors aligned with growth drivers such as AI, fiscal stimulus from the One Big Beautiful Bill Act (OBBBA), and changes in regulatory policy, but investors will want to maintain flexibility. We believe corrections are a price we must pay to pursue compelling returns over the long term.

Thank you for your continued trust.

Sincerely,

Wayne Rigney

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of December 3, 2025.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

This research material was prepared by LPL Financial, LLC.

RES-0006414-1125 | For Public Use | Tracking #831847 | #831850 (Exp. 12/2026)

October 1, 2025

Dear Valued Investor,

The October 1 deadline has passed, and the U.S. government has shut down. While political gridlock is never ideal, history suggests that shutdowns tend to be short-lived and have minimal sustained impact on the economy or the stock market. They are largely about political posturing and therefore don’t take long to get resolved. Simply put, delaying Social Security checks is not a winning political strategy, so it almost certainly won’t happen (we can’t make guarantees, but this is close).

Republicans do need votes from Democrats, and we know there hasn’t been much nice playing in the sandbox in Washington, D.C. lately, introducing the possibility of an extended shutdown. Democrats are seeking healthcare concessions, including reversing Medicaid cuts and extending Affordable Care Act subsidies. Meanwhile, the Republicans are threatening more public-sector layoffs in areas not aligned with the President’s priorities, as each side stakes out its position.

Investors have smartly looked past budget disruptions throughout history, rightly focusing on traditional fundamental drivers of the economy and stock market such as corporate earnings, consumer spending, business investment, inflation, and interest rates. That said, sectors heavily reliant on government contracts — such as defense and life sciences — may experience some short-term volatility. An extended shutdown, which could delay key economic data releases, including the October 3 jobs report, could detract slightly from economic growth but is unlikely to be material, in our view.

Since 1976, the U.S. has experienced 20 shutdowns, averaging just eight days in duration. The longest, in 2018–2019, lasted 34 days. Importantly, the S&P 500 has historically posted average gains of 1.2% and 2.9% in the one- and three-month periods following budget resolutions, underscoring the market’s resilience, though past performance does not guarantee future results. Even if investors ignore the government shutdown, a pause may be in order given how far stocks have come since April — even as more tariffs are absorbed.

While we see rising odds of a 5–10% pullback, risk to this bull market appears low thanks to a resilient economy, strong earnings, the resumption of the Fed’s rate-cutting cycle, and long-term catalysts like AI-driven productivity gains and fiscal stimulus from the One Big Beautiful Bill Act (OBBBA). Against that backdrop, a pullback could offer an attractive buying opportunity.

In short, while near-term volatility is possible, or perhaps even likely, the broader outlook remains constructive. We encourage investors to emphasize stock market fundamentals over political theater and consider pullbacks as potential buying opportunities.

Thank you for your continued trust.

Sincerely,

Wayne Rigney

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of October 1, 2025.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

This research material was prepared by LPL Financial, LLC.

RES-0006090-0925 | For Public Use | Tracking #804125 | #804128 (Exp. 10/2026)

August 6, 2025

Dear Valued Investor,

The last few days of July and the beginning of August have brought a flurry of key economic data, central bank activity, company earnings results, and tariff news. Here are some takeaways from the week of July 28:

Slowing U.S. economy. Second-quarter gross domestic product grew at a 3% annualized rate, though much of the growth stemmed from a sharp drop in imports after companies rushed orders ahead of tariffs. July’s jobs report showed a slowdown in hiring, signaling a labor market losing some steam. While this could support the Federal Reserve’s (Fed) case for easing, it also introduces concerns about consumer spending. Though we see no signs of an imminent recession, we believe the U.S. economy is unlikely to grow faster than 2% in the second half.

Resilient corporate earnings. Earnings season has been better than anticipated, showing that corporate America has more earnings power than previously thought. Analysts called for S&P 500 earnings per share to grow 4–5% year over year when earnings season began. We expected some upside, perhaps to around 8%, but companies are collectively on track to grow earnings by over 10% (source: FactSet). Big tech companies have been the key driver, accounting for half of earnings growth amid big investments in artificial intelligence (AI).

Stage set for a September rate cut. The Fed held rates steady on July 30, but Fed Chair Powell’s comments were less definitive than markets had hoped. The weak jobs report on August 1, however, revived expectations for a rate cut in September, which may help mitigate the magnitude of any stock market pullbacks. Two cuts of 0.25% each are likely this year, if not three, which should help support the bond market.

Don’t dismiss trade risks yet. The August 1 negotiation deadline passed, with several countries slated for tariffs well above the apparent floor at 15%. Only about half of the presumed tariffs have been implemented, meaning more upward pressure on prices and company profit margins lies ahead — after more tariffs take effect on August 7. Meanwhile, negotiations are continuing with China and several other key trading partners.

What this means for you. The market is navigating a complex landscape, with several economic and policy crosscurrents. A slowing economy, tariff implementation, and seasonal stock market weakness point to potential bouts of volatility ahead. Expected rate cuts, AI investment, and impending stimulus from tax and spending legislation passed last month may help buoy investor sentiment.

Pullbacks, when they inevitably come, can refresh bull markets and set them up for their next leg higher. So, we believe it’s important to stay invested and well-diversified, while looking for opportunities to add equities on a dip. Economic and corporate fundamentals remain in great shape.

Thank you for your continued trust.

Sincerely,

Wayne Rigney 

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of August 6, 2025.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Past performance does not guarantee future results.

Asset allocation does not ensure a profit or protect against a loss.

This research material was prepared by LPL Financial, LLC.

RES-0005030-0725 | For Public Use | Tracking #779149 | #779150 (Exp. 08/2026)