Markets have given investors plenty to think about this year. Stocks have climbed to new all-time highs, while interest rates remain near multi-decade highs. Although that may sound contradictory, both trends can offer opportunities for a well-balanced portfolio.
The S&P 500, Nasdaq, and Dow have all delivered double-digit total returns this year. Technology has benefited from enthusiasm around artificial intelligence, while higher oil prices have supported Energy. More importantly, strong corporate earnings have helped provide a foundation for the rally. S&P 500 earnings are currently forecast to grow more than 30% this year, compared with a historical average of about 8%.
Caption: Stocks and bonds play different roles in a portfolio, and history shows both can perform well during periods of economic growth.
When markets reach record highs, it can be tempting to wait for a better time to invest. History suggests that can be difficult.
An investor waiting for a 5% market pullback would historically have waited an average of 291 days. During that wait, the market would have already gained nearly 14% on average.
Markets certainly experience declines, and we should expect periods of volatility. But new highs are also a normal part of long-term market growth. Trying to find the “perfect” entry point can mean missing valuable time in the market.
Caption: Waiting for a market decline can feel cautious, but historically the market has often risen significantly before that pullback arrives.
Higher interest rates have created challenges for existing bonds because bond prices generally fall as yields rise. But there is another side to the story: investors can now reinvest at higher yields.
In fact, bond yields are among their most attractive levels of the past two decades. Investment-grade corporate bonds and U.S. Treasuries are providing income opportunities that were difficult to find during the many years when interest rates were near zero.
Caption: A bond’s starting yield has historically been an important contributor to its longer-term return—making today’s higher yields meaningful for income-focused investors.
Today’s environment is a good reminder of why portfolios include different types of investments. Stocks provide opportunities for long-term growth, while bonds can offer income, stability, and diversification.
Rather than trying to predict the Fed’s next decision or waiting for the next market dip, the goal is to maintain a portfolio designed around your financial plan, time horizon, income needs, and long-term goals.
Stocks have benefited from strong earnings and economic trends, while higher interest rates have made bond yields more attractive. Both can play important roles in a long-term portfolio.
Markets will continue to move—and headlines will continue to change. Staying diversified, disciplined, and focused on your financial goals can help keep short-term uncertainty in perspective.
References
Standard & Poor’s and Nasdaq, as of August 14, 2026.
Clearnomics research using Standard & Poor’s and LSEG data, as of August 14, 2026.
U.S. Department of the Treasury, interest rate data.
Clearnomics research and Bloomberg data, as of August 14, 2026.
Index Descriptions S&P 500
The Standard & Poor’s 500 Index 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.
Dow Jones
The Dow Jones Industrial Average consists of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.
NASDAQ
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. Bloomberg US Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
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Important Disclosures
The views expressed represent the opinions of Mendel Money Management, Inc. as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.
Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website. Past performance is not a guarantee of future results.
