Johnson Financial Group

Since early April, U.S. stocks have rallied sharply despite an ongoing war, rising inflation fueled by soaring oil prices (near $100/barrel), higher bond yields (up 0.6 to 0.7 percentage points), and frothy valuations (21 times projected earnings vs. a historical average of 17 times for the S&P 500 Index).

Our underlying theme for 2026 is that investors should focus on Process Over Predictions. The instinct of many investors is to chase the "winners" of the previous cycle or expect spectacular growth to continue indefinitely.

This year has certainly been a significant one for me. For the markets and the economy, it has been a big year as well. Rate cuts and no recession have been positive for stocks and bonds.

This Packers season has parallels to today’s financial markets. The Artificial Intelligence (AI) boom has propelled markets higher for the past 3 years. The S&P 500 is up just shy of 15% through 9/30/25, following 20%+ years in 2023 and 2024.

Business owners who sponsor 401(k) and other defined contribution plans will soon be faced with another decision: whether to offer alternative-investment options among a plan’s investment options.

Elite golf is a mental game as much as physical—and so is investing. This year’s Masters tournament was one of the most compelling I have ever witnessed, and Rory McIlroy’s long-awaited playoff victory contains a number of life lessons that are relevant for investors.

Bonds look attractive again after the most recent rise in interest rates. Markets are likely to continue to overreact to every new employment report and inflation reading, keeping interest rate volatility elevated as yields dance up and down with each data point.

At the time of year where everyone is reflecting on the things that matter most to them in their personal lives, it is important to also consider what matters when it comes to investing. In this investment commentary, Johnson Financial Group shares what really matters as you put your money to work.

Money markets paid nothing. The dividend yield for the S&P 500 Index was 2%, and the 10-Year Treasury yield was stuck between 2%-3%.

The post-Covid era seems ripe for a Yogi-ism since economists and policymakers have been so wrong about the path of the economy and inflation. Yes, inflation is finally on a downward trend, but it has proven far stickier than the Federal Reserve and most economists predicted and remains above the Fed’s 2% target.

During his spring break, Johnson Financial Group Portfolio Manager Brian Schaefer had the time to read “A Gentleman in Moscow,” which got him thinking about the how the current market moves could impact the American experiment. In this investment commentary, Schaefer discusses the MOVE and VIX indexes and what they might say about the markets.

Given that (1) investors have benefitted from a market environment that reliably produced a source of positive returns from a 60/40 mix, and (2) we’ve just completed the best period for that mix in nearly 70 years of tracking, why would an investor want to consider a change?

Just over a year since the COVID-19 virus began spreading around the globe and significant portions of our economy shut down, today the U.S. is solidly on the road to recovery. 

In a year that offered a pandemic and an election as reasons for investors to bail on risky assets, 2020 turned out to be a great year for those that stayed the course. A 60/40 portfolio of diversified stocks and bonds increased by a double-digit percentage, exceeding expectations.

We believe that bond investors should use the benefits of a stable rate environment to buy yield on the short to intermediate part of the yield curve. Stock investors have a more complicated task in 2019, albeit less so now that the Fed has indicated it is not hiking interest rates and will end the reduction in its balance sheet assets by October.