Chaos to Confidence: Making It Make Sense

While 2025 and the beginning of 2026 have been marked by significant humanitarian crises and global geopolitical challenges, the purpose of this commentary is not to revisit those events. Instead, our aim is to illustrate that, despite these difficult circumstances, markets have continued to demonstrate resilience and to explain the exact factors behind that spirit of strength.

We field questions on every financial topic imaginable, but throughout all of 2025 and into the new year, there was one that has risen to the top:

“How can my portfolio be trending upward, despite all the poor economic news, political strife, war, inflation, tariff issues and general global unrest? It seems so counterintuitive that it makes no sense”?

• The S&P500 – Earnings/Profit: The S&P500 is an index consisting of the largest publicly traded companies in the USA. The index has evolved into an indicator of global stock market health, reflecting the international scope of these companies, whose customers and clients are not limited to the United States but are distributed worldwide. The highest profitability year in recorded history for the S&P500 was in 2021, when the earnings per share (EPS) were $230.00 per share. In 2025, the earnings per share (EPS) equaled $224.00. This is not far off-peak historical earnings. Earnings = Profit. Profits drive stock prices over the medium to long term.  

• Interest Rate Reductions: Borrowing and credit markets are essential to the growth of companies. The most successful companies often borrow for operations and growth projects. In 2025, there were decreases in actual rates and signs of lower expected future rates.

• The Stock Market Versus the Economy: Although these two items seem to be one and the same, they are not. The stock market is a forward-thinking machine. Individuals and institutions allocate their money in this area based on future growth potential. The tools we use to measure the economy and economic growth/contraction are backward-looking. Economic reports today are based on past events, not future expected events. When you mix these two up, your forward-thinking decisions can get derailed by what has happened, not what’s expected to happen.

• Spending Proof: Spending is way up, everywhere. Countries, households, and corporate spending are closely in line with 2021 numbers. Despite inflation and interest rates, money seems to be flowing, and borrowers have returned to their regular scheduled programming.

• Markets are More Powerful than Leaders: There were terrible leaders of nations before, and there will be many after. Politicians do affect markets in the very short term with policy changes, but these changes, in a capitalist and free market, have far less impact when you look at 3–5-year investment time frames. The global stock market is a warrior. It can lose very short-term battles, but it always wins the long-term war. It is resilient, persistent, confident, and proves to be stronger as time marches on. Confidence in it may waver, but it never wavers in its own belief that it can grow your wealth. It only knows the warrior code.

There you go – five specific reasons why your portfolios have persisted upwards despite a global pandemic, 40-year high interest rates, inflation, tariffs, more tariffs, probably more tariffs to come, wars, and political strife. How can we be so optimistic? Simple. We do not take long-term risks with your short-term money. When you have an adequate investment timeframe, you can take calculated risks.

Looking ahead, the future remains bright even if the path forward is uneven. Volatility, headlines, and periodic market disruptions will continue to test all our resolve. Yet history is clear: over the long term, equities have proven to be the most effective vehicle for growing wealth. When paired with discipline and patience, the stock market remains the best defense against inflation, taxes, and the erosion of purchasing power.

If you would like to connect for a full review or a quick call to discuss your financial plans, you can reach Sum, Kayla, or myself anytime. You can also schedule a convenient time directly in my calendar using our online meeting scheduling tool.  

Kind Regards, 
Christian