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We're a team of investment advisers committed to protecting the financial future of our clients.
We're a team of investment advisers committed to protecting the financial future of our clients.
As we sit near all time highs in the stock market, talking diversification and broadening out your portfolio can be hard to implement. Why sell the holdings that have treated you so well?
However, as you can see by the chart below, provided by YCharts, from the end of 1999 through 2007, a $10,000 investment in the S&P 500 grew to just $11,409, including reinvested dividends. Meanwhile, emerging markets reached $31,260, small-cap value climbed to $25,830, and mid-cap value rose to $25,120. Developed international stocks also finished ahead of the S&P 500. Overconcentration in a particular index or sector could be detrimental to your portfolio, especially when factoring in distributions as well as the possibility of a poor sequence of returns.
Currently, we are in a period of concentration we have never seen before. According to The Compound, the top 5 S&P 500 stocks (NVDA, AAPL, GOOGL, MSFT, AMZN) are now equal in market cap to the bottom 434 stocks as Doug mentioned on the radio show last Sunday. This has worked out well for those of us who have been invested in these companies. Going forward, diversification may not be the most profitable thing to do, but t is the right thing to do. When you are at or near retirement, you give up performance for stability, and that is what diversification does. Combining diversified equities with appropriate bonds and cash reserves can help reduce pressure to sell stocks during difficult markets and gives you flexibility when distributing assets.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
On the radio show and in this space as well we’ve talked about how September is traditionally the absolute worst-performing calendar month for the S&P 500. Since 1928, the average September loss for the S&P is 1.13%. While September 2026 was slightly better than that trend (the S&P was down 0.5%), as the chart below powered by YCharts illustrates – 10 of the 11 sectors covered by State Street Select’s Sector SPDR ETF’s were in negative territory. The very strong outlier? Technology.
The technology sector’s dramatic outperformance becomes even more striking when contrasted against the S&P 500 index. During this late-summer stretch, a traditional cap-weighted benchmark would have felt immense downward gravity. Because ten out of eleven market sectors finished in the red—with major pillars like Materials, Financials, and Real Estate plunging over 7%—most the index's underlying constituents were in a steep correction. In a typical market cycle, such widespread bleeding drags the entire benchmark down into a deep, synchronized retreat.
However, because the modern S&P 500 is heavily top weighted by mega-cap technology and communication design companies, the 4.96% surge in the XLK Technology ETF acted as an incredibly powerful counterweight. This stark divergence illustrates a "two-speed market." On one path, the equal-weighted reality of the average stock was suffering under the weight of macroeconomic pressures, dragging down cyclical and defensive sectors alike. On the other path, a highly concentrated cluster of secular growth engines defied that gravity entirely. For investors benchmarked against the S&P 500, portfolio returns during this window were entirely dictated by their exposure to this single, resilient tech channel.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
As is illustrated by the chart below, provided by Yahoo! Finance - During Calendar ending July26th 2026 (Q2 Fiscal 2027), NVIDIA reported revenue of $96.2 billion, up 106% from a year earlier and 18% from the previous quarter.Data Center revenue reached $89 billion, increasing 117% annually as demand for AI computing infrastructure continued to expand.These results underscore NVIDIA’s central role in supplying the technology powering the AI buildout.
On a related note, this past week NVIDIA announced a $150 billion share repurchase program that was in addition to a previously authorized $85 billion that has yet to be completed. The company expects to execute the remaining program through fiscal 2028. As this is an authorization to repurchase outstanding shares, the net impact of fewer shares available to the public is higher earnings per share than they would have been otherwise. On an absolute basis, $150 billion is a huge number. However, keep in mind that it is only 2.5% of their market cap!
NVIDIA’s buyback is historic, as it is the largest in history. However, they do not, by themselves, guarantee positive returns. Nonetheless, they are an indication that Nvidia believes in the business prospects of the company and therefore considers the current stock price, a value. This in turn reinforces our optimism in technology and that companies will continue to spend on this AI buildout.
“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.
Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”
