“Well begun is half done,” the proverb says. And we tend to agree. Since it’s your journey, we don’t like to sweat the particulars: it’s never too early to start, but it’s also never too late.
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The most pertinent warning for investors in the AI age might be, “Trends may not persist.”
We humans tend to believe that current conditions or trends will continue. In recessions, we can scarcely imagine how the economy will ever recover. And when the markets get into bubble territory, it seems the good times will never end.
That was certainly the case in March of 2000, at the peak of the Internet Boom. The S&P 500 had basically tripled in five years and became dominated by large technology companies.
“The internet was going to change everything,” they said—and that story came true.
But valuations had gotten so excessive, the S&P 500 suffered a Lost Decade when the trend changed: it took nearly 13 years on a round trip to nowhere. Fortunately, the S&P 500, composed of the stocks of large U.S. companies, is not the only game in town. Small and mid-sized companies, value stocks, international companies, and other opportunities held up much better, sometimes even making gains during the flat spell.
This history lesson is key to why we are not chasing the index here at 228 Main, especially right now. Looking for bargains, avoiding stampedes—these fundamental principles help us avoid the extremes. Most of us don’t have thirteen years to wait for a market recovery, so it makes sense to strive to be in those parts of the investment universe that are more reasonably priced, now.
As in 2000, the index has become dominated by large technology companies, this time as part of the AI boom. We are paying attention to our principles, mindful that these trends may not persist.
We pay, temporarily, in performance. Our approach has us lagging the S&P 500 recently; we’re not going up by as much, but our efforts now are made in an attempt to potentially go down by less when the bust comes. No guarantees. But we’re turning to history as a guide.
Clients, now as ever, reach out any time with your questions. We’re here to help.
Neither the past performance of the S&P, nor the described methodology, is a guarantee of future returns.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
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by Mark Leibman, Advisor
I learned how to make soup back in the last chapter. Now a variety of soups are a staple of my diet.
Crafting a new soup recipe recently, I started with a chicken, six herbs and spices, and seven kinds of vegetables. I used some olive oil and a splash of red wine vinegar. It may be served with a mix of seven kinds of beans, and rice, of course (you know how I feel about rice and beans!).
It came out really good!—according to a biased observer that I recently married.
Contemplating the choices made in the creation of the soup, I thought about how we build portfolios here at 228 Main.
From many alternatives, we select what we want to own and determine the proportions of each. Another school of thought holds that portfolios should consist of some of everything—500 stocks go into the S&P 500 index, for example, so portfolios get to hold a little of each.
That led me to wonder, What would Index Soup look like?
And it might even be served with 25 kinds of beans, and 10 varieties of rice!
That would have to taste like a little bit of everything, and not much of anything, wouldn’t it?
Just as different recipes can reflect a wide variety of tastes and textures and smells, and we humans have an appetite for different things at different times, our portfolios evolve and change as conditions unfold.
By looking for the best bargains, by avoiding stampedes in the market, by planning to own the orchard for the fruit crop (thinking long-term), our collection of opportunities has diverged from the most popular kind of Index Soup, the S&P 500.
Creating our own recipe helps avoid another possible pitfall of Index Soup—not that it can get too bland in its attempt to average everything, but that it can get too heavy-handed in spicy times.
Recently, slightly more than half of our long-term portfolios are invested in small- and mid-size companies. We’re diversified around the world, although about two-thirds of value is still invested in the U.S. While AI-related stocks have captured the public imagination, we’re focused a little more on value-style stocks than the mega-size growth companies, which we believe may be over-valued at present. No guarantees, but we’re trying to be intentional with our flavors.
Meanwhile, Index Soup focuses on large U.S. companies, with an emphasis on growth. Technology is nearly 37% of the mix in that soup, and the top seven holdings are mega-size tech companies.
We know that the flavor can get “too strong” at times: back in the year 2000, the S&P 500 index, and technology stocks generally, left a bad taste in the mouths of many investors the last time valuations approached extreme levels.
We can’t know the future, but we are hopeful our recipe is going to “taste” a lot better in the months and years ahead. No guarantees—past performance is not an indicator of future results.
But we don’t have to be the best chefs in the world. We’re just trying to find a blend that works for us.
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Investing involves risk including the loss of principal. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The S&P 500 is an unmanaged index which cannot be invested into directly. Past performance is no guarantee of future results.
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Initial Public Offerings (IPOs) have been in the headlines lately. More than a dozen companies offered IPOs in June 2026. So we’re encouraging you to take five minutes to hear Billy talk about our take on IPOs.
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Even heroes get knocked down a time or two when fighting their monsters. There may be a couple of bumps in the road, but what good plot doesn’t have some conflict? With our passions in mind, a little bit of perseverance, and a good plan, we all get to be the hero of our own story. Want to talk through what’s important in your story? Call or email to chat.
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“There’s gold in them thar hills!” Gold and the rush to grab it have fascinated Americans for so long.
We’ve been hearing again about the allure of it and other precious metals as investments. Hear from Greg on whether the enchantment makes sense for us.
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If you’re looking for an excuse to give up, you’ll always find one. How to change the tire and get back on the road.
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Why do we own the orchard? It’s a long-term endeavor, our favorite metaphor for retirement planning. We plant and tend the trees in our working years, but in our retirement years, we live on the fruit crop! It’s about the balances, until it’s not. Then it’s about what they produce. 🙏
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Listening to one another is a gift that costs nothing but means everything. We know that our time and attention are precious resources, which is why our team here at 228 Main always has our “listening ears” on. 🙏
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“Who knows what is good and what is bad?” What an ancient parable has to teach us about getting a “luck-proof” approach to investing: a message from Caitie this week.
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