July 1, 2026

From Rick's desk...

Has Stock Market Exuberance Become Irrational?

Dear Clients & Friends,

I had a great weekend on the golf course, putting together some of my best rounds in quite a while. I think playing in an evening 9-hole league once a week is finally paying off. It just goes to show that practice really does make a difference. Practice makes perfect...well, maybe not perfect, but definitely better! It also reminds me that improvement usually comes from consistency, not trying to hit a home run every time.

That same idea applies to investing.

The stock market has had an outstanding second quarter, with major indexes posting impressive gains. Strong corporate earnings, continued investment in artificial intelligence, and a resilient economy have all helped fuel the rally. Whenever markets move this far, this fast, it's natural for investors to wonder whether enthusiasm has gotten ahead of reality.

LPL Research recently addressed that very question: Has stock market exuberance become irrational? Their conclusion is that while optimism is certainly elevated, we're not seeing the kind of speculative excesses that characterized the dot-com bubble of the late 1990s. Investor sentiment has increased, but many measures remain close to their long-term averages, suggesting that confidence hasn't reached unsustainable levels.

That doesn't mean everything is smooth sailing. Some indicators show investors have become more aggressive, including record levels of margin debt, meaning more investors are borrowing money to invest. Areas of the market tied closely to the artificial intelligence story - particularly semiconductor companies - have also experienced extraordinary gains and appear somewhat stretched in the short term. History tells us that markets rarely move straight up forever, and periods of consolidation or modest pullbacks are both healthy and expected after strong advances.

The encouraging news is that the broader market has also begun to participate in the rally, rather than relying solely on a handful of large technology stocks. That's typically a sign of a healthier, more durable bull market. While we could certainly experience increased volatility in the months ahead, LPL believes the current environment is more consistent with a maturing bull market than one nearing its end.

As investors, it's important to remember that short-term pullbacks are often part of the journey and can create opportunities rather than reasons for concern. Staying diversified, maintaining a long-term perspective, and resisting the temptation to react emotionally to day-to-day market swings remain some of the most important ingredients for long-term success.

Just like my golf game has improved by showing up every week and focusing on the fundamentals, successful investing is usually less about making the perfect shot and more about consistency, discipline, and patience over time.



Have a great week, and as always, thank you for allowing us to be part of your financial journey.



Best regards,

Rick

Richard B. Welsh, A.A.M.S.

Founder & President

The Political Economy of Real Assets

Will Thompson, Founder and Managing Partner of Massif Capital, joins the LPL Market Signals podcast to discuss the evolving dynamics across the broader commodities landscape. He shares his perspective on investing within the real asset universe, emphasizing how rising resource nationalism is reshaping the macro backdrop as governments take a more active role in securing and controlling critical resources. The conversation also explores recent developments in energy markets, including the essential role insurers play in facilitating oil flows through the Strait of Hormuz, as well as the outlook for global oil supply and demand following the recent U.S.-Iran peace agreement.

From Marie's desk...

Living Longer Changes Everything

Dear Clients and Friends,

One of the most important financial planning trends isn't happening on Wall Street. It's happening in our lives.

People are living longer than previous generations, which means retirement is no longer a brief chapter at the end of life. For many families, retirement may last 20, 25, or even 30 years. That reality changes the conversation around financial planning.



For much of the last century, retirement planning focused primarily on reaching retirement. Today, the focus has expanded to sustaining a lifestyle throughout retirement. A retirement that lasts 25 years requires a different approach than one that lasts 10 or 15. Income needs, healthcare costs, inflation, taxes, market volatility, and legacy goals all have more time to influence outcomes. This is where financial planning becomes more than an investment conversation.

At WFG we often tell our clients that retirement planning isn't simply about accumulating assets. It's about creating a strategy that helps support decades of living. That includes evaluating income sources, stress-testing retirement scenarios, planning for healthcare expenses, considering long-term care needs, and ensuring portfolios are aligned with both goals and risk tolerance. The challenge isn't just preparing for retirement. It's preparing for a retirement that may be longer than many people expect. And while no one can predict exactly what the next 20 or 30 years will bring, thoughtful planning can help create confidence in the face of uncertainty.

The chart above isn't really about longevity. It's about opportunity. More years with family. More travel. More experiences. More freedom to spend time on what matters most.

Our role is helping clients build a financial plan designed to support those years - not just reach them.

Best,

Marie

410.777.5897