And just like that, half of 2026 is over. It’s been a wild year for investors but the end result (thus far) has been meaningfully positive.

As of June 30, 2026, the US equity market (measured by the S&P 500) has risen 10.2%. Fixed income markets have had a harder time in the face of rising rates but are still modestly positive (Barclays Aggregate Bond Index is up 0.62% on the year). International developed and emerging markets have more than held their own, rising 9.4% and 24% year to date respectively.

As always, looking back can be interesting but what always matters more for investors is where we go from here. Let’s take a look at some key themes that are top of mind as we enter the second half of 2026.

Rates in the Driver’s Seat

If you’ve been reading along for years, you’ll be very familiar with the importance of interest rates to both equity and fixed income markets – both their current level as well as their anticipated path. As we entered 2026, there was a strong anticipation that interest rates would start to come down. And this was the case – for the first few months – right up until the Middle East conflict began.

Typically in times of global conflict, US interest rates will fall (as there is an increased demand for “safe” assets, leading to demand > supply). That was not the case this time largely due to the location of the conflict and the pressure on energy prices, which led to concerns over rising inflation and a corresponding rise in rates. Other factors have led to rates rising/staying “higher for longer” – which you can read about in a recent post here.

As we finish the second half of 2026, interest rates will remain of the utmost importance to markets and their path forward from here. While higher/rising rates can be a headwind for equities, they can serve to as a useful tool for fixed income investors given the current coupon/income levels available across the fixed income market. The income available at these rate levels can provide a very strong support for portfolios.

Pay Attention to Politics

As much as I’d like markets to operate independently of political forces, that is just not possible. There are many political forces in play for the balance of the year, including the new Chair of the Federal Reserve, the midterm elections, and the ongoing negotiations in the Middle East. As is usually the case, political news can cause markets to overcorrect in both directions. Stay aware and nimble in the face of potential policy shifts – but as always, don’t panic.

Rationality Reigns

It can be easy to get swept up in the latest market mania – whether it be the IPOs of popular companies, parabolic moves in certain parts of the market, or belief in various “high conviction” predictions about where markets will go from here. All of these market mania stories are captivating and easy to become enamored with – but do your level best to stay rationale. If it sounds to good to be true, it very well could be. If everyone on TV is talking about something, it’s likely already priced into the market. If you think you have some secret information no other market participants have, it might be worth asking how that could be possible. You don’t have to take part in everything the market offers up to you. Slow and steady compounding of wealth over time is the goal.

Rebalance as Needed

When markets are moving as far and as fast as they have in the first half of the year, it’s likely that there is some part of your portfolio that could use a rebalance. Perhaps its trimming an individual equity position that’s done very well – or adding to one that has lagged the market. Perhaps it’s putting some new cash to work. Perhaps its adjusting your asset class weights to get back in line with your targets. As time permits, revisit your portfolio and rebalance as needed. As you do so, keep in mind you are enhancing the durability of your portfolio moving forward. It’s not time to “get out” by any means – but it may be time to strengthen your portfolio for a greater range of possible outcomes after the strong start to the year

I for one can’t wait to see what the second half of the year brings.

Onward we go,