The Financial Advocate: Summer 2026

“Kickoff!”

The NFL season has come to define fall in America: a season of preparation, strategy and, when everything goes according to plan, flawless execution. Much of the country becomes consumed with Monday Night Football, Thursday Night Football and, of course, Sunday game day. The NFL has even begun exporting games beyond our borders. Team values have soared, along with the cost of advertising, sponsorships, and stadium naming rights. With the preseason, regular season, and playoffs, the entire enterprise now stretches across nearly six months. Quite a business!

This year, however, football may have to compete with the midterm elections for our attention. The political headlines are already becoming louder, and the tone often borders on vicious. Over the coming months, politicians, strategists, and pollsters will debate taxes, government spending, interest rates, trade, and nearly every other issue that can affect the economy and financial markets.

Those issues matter, but the daily political noise can easily distract investors from their long-term plans. Our job is to help hold that noise at bay. We strive to be careful guardians of your capital while helping you grow and preserve your wealth. We also seek to provide thoughtful guidance on taxes, estate planning, and the proper allocation of your hard-earned money. That responsibility does not change with the political calendar. We will remain focused on the facts, evaluate new developments as they occur, and make decisions based on their actual financial consequences – not the volume of the evening news.

Fortunately, the economic landscape continues to offer investors plenty of reasons for optimism. Market returns have been supported by generally solid fundamentals and strong corporate earnings. The stock market is ultimately an expression of corporate promise and execution, and American businesses have demonstrated an impressive ability to adapt, innovate, and deliver results.

Unemployment remains historically low, although the labor market has begun to show some signs of cooling. Inflation, while still an important consideration, thus far remains within a range that businesses and consumers have thus far been able to manage. Corporate management teams continue to navigate a complicated environment and, in many cases, are delivering strong results.

More importantly, the promise of a new and vital economic landscape is real. Consider just a few of the frontiers now developing around us: commercial space exploration, artificial intelligence moving into nearly every aspect of our lives, medical breakthroughs that once seemed impossible, and productivity gains transforming almost every corporate function.

America was built through the development of a free, energetic and forward-looking economy. Our role in the world has long been driven by innovation, entrepreneurship, and the pursuit of human advancement. We are all beneficiaries of that prosperity.

Think about how differently we live and work compared with only a few years ago. Electric vehicles, cloud computing, smartphones, artificial joints, and increasingly sophisticated medical treatments are now part of everyday life. The list goes on. This commitment to “what’s next” remains one of our country’s greatest strengths.

That does not mean investors should ignore risk. It means we should keep those risks in perspective and avoid allowing political headlines to obscure the innovation and progress taking place around us.

One concern we are watching especially closely is the level of long-term interest rates. For many years, rates were unusually low and attracted relatively little attention. That is no longer the case.

Higher rates can slow the economy, make homeownership less affordable and pressure corporate profitability – particularly for companies that rely heavily on financing. They also raise the government’s cost of servicing its debt. On the other hand, higher yields can create better opportunities for savers and fixed-income investors. Interest rates do not affect every investment or every client in the same way, which is why we monitor the entirety of the yield curve (chart below).

A highly respected market strategist, Ed Yardeni, coined the term “bond vigilantes” to describe investors who sell, or become reluctant to purchase, government bonds when they believe fiscal or monetary policy may lead to excessive borrowing or inflation. That selling can drive bond prices lower and yields higher, effectively imposing discipline on policymakers.  Yardeni continues to believe that the “Roaring 2020s” may be the defining market story of this decade. However, a sustained move above 5% in the 10-year Treasury yield could challenge that optimistic outlook by tightening financial conditions and making bonds more competitive with stocks. With the 10-year Treasury currently trading in the high-4% range, we are watching that threshold carefully.

The Treasury and the Federal Reserve are well aware of the economic consequences of higher long-term rates, but they do not control every movement in the bond market. Fiscal policy, inflation expectations, and investor demand will all help determine what happens next. If the rate environment changes meaningfully, we will evaluate what it means for our clients and determine whether portfolio adjustments are appropriate.

For now, our message is straightforward: remain calm, participate thoughtfully in the growth and innovation taking place around us, and continue watching the genuine economic risks. Politics will dominate plenty of headlines between now and November, but it should not dominate a sound investment strategy.

I hope you can enjoy the football season, as I do, and replace at least some of the political noise with a little homegrown team spirit. Remember, it is our job to help take the stress out of managing money and turn careful planning into a more prosperous and enjoyable future.

Rely on us. That is why we are here. We are on your team.

“Economist’s Corner,” by Roger Klein, Ph.D.

The Federal Open Market Committee (FOMC) is scheduled to meet eight times this year. The schedule of eight meetings was established in 1981 under Chair Paul Volcker. By law, the FOMC is mandated to meet at least four times annually. According to a New York Times report, Chair Warsh is considering reducing the number of FOMC meetings to six times per year. The actual number of FOMC meetings is determined by economic and financial conditions. The FOMC was established by The Banking Act of 1933 and over its history the range of meetings in a given year has fluctuated between four and nineteen.

Chair Warsh initially served as a Federal Reserve governor while Ben Bernanke was Chair. Chair Warsh has a different view of how monetary policy should be conducted and communicated. Here is a quote from Bernanke on the importance of communication. “l often like to say that monetary policy is 98 percent talk and 2 percent action. Certainly, one of the principal lessons of recent decades for central banks is that good communication makes for effective policymaking.”

Chair Warsh has set up a task force on central bank communication so we will know more when that task force releases its report. But for now, Warsh is telling us that he is no fan of the Bernanke view of central bank communication. Bernanke was a vocal advocate of forward guidance. Warsh is unwilling to say what the Federal Reserve will do. At the most recent press conference after the July FOMC meeting, the questions were often the same. “Inflation is above the Fed’s 2% target, you are committed to price stability, so why aren’t you raising the target interest rate?”

Warsh views the Fed as a referee not as a financial market participant. The market should make its own decision about interest rates and should not rely on Fed communication. Thus far, that view has resulted in rising market interest rates. Why are real yields increasing? Of course, nobody really knows. What we do know is that the government debt in the U.S. is growing rapidly as the government continues to have large budget deficits, even with the economy running at or close to full employment. The official projections are for more of the same as far as the eye can see. What is true for the U.S. is also true of many other developed economies. At the same time, the large pool of excess savings world-wide has been greatly diminished. Foreign central banks are reducing their holdings of U.S. Treasury securities and increasing their holdings of gold. Finally, the Al capital spending boom is competing for scarce resources, including long-term capital.

Managed Model Strategy

Global Alpha

Global Alpha continues to enjoy yet another profitable year.  Sought-after themes include the technology, industrial, and consumer discretionary sectors. Reshoring of manufacturing, data centers, semi-conductors, and off-price retail are all doing very well.  We will be adding to biotech, after a long hiatus, as this area is coming into an era of real products and real solutions. Medical consolidation is likely for the large pharma companies as many huge drugs are coming off patent. This is another positive, as biotech companies will tend to be acquired by larger pharma companies in need of the next thing to fill their pipeline.

Global Balanced

The Global Balanced strategy remains broadly diversified and positioned to benefit from continued economic and earning’s growth. We continue to favor strong, well-established U.S. companies while also investing in both medium and smaller-sized domestic equities. International and emerging-market equities have been accretive to performance in 2026, reinforcing the value of maintaining a globally diversified approach. Our bond investments remain focused primarily on higher-quality holdings, specifically U.S. Treasuries and high-grade corporates, with selective opportunities in other areas (high yield and emerging market debt) where we believe the potential return justifies the added risk. We also continue to hold an array of alternative investments, which provide an additional layer of diversification and help reduce the impact of market volatility.

Moderate Allocation

Despite the significant geopolitical and macroeconomic crosscurrents this year, balanced portfolios have performed well. Equities have accounted for the majority of gains. However, sticky inflation and rising yields have resulted in essentially flat fixed income returns. We shortened the duration (interest rate sensitivity) of our fixed income holdings quarters ago. If we sense that interest rates are poised to move measurably higher, we will do so again. The Moderate Allocation strategy continues to be judiciously positioned to benefit from the AI theme. Recently, we increased our weight in the energy sector as we believe that higher oil prices are not fully reflected in share prices. We expect increased volatility in the months ahead as the new Fed Chair Kevin Warsh clarifies his approach to monetary policy and we get closer to mid-term elections. Additionally, we are entering a seasonally weak period for markets. As such, we remain on high alert.

Milestone 360

Reviewing Your Beneficiary Designations

Beneficiary designations are an important part of your financial plan, but they can be easy to overlook as life changes. This quarter, your VWM advisor will help you review the primary and contingent beneficiaries listed on your IRAs, Roth accounts, retirement plans, annuities, life insurance policies, and education accounts. For 529 plans, we will also review the successor owner designation. Our goal is to ensure that each designation remains current and reflects your wishes.

Because these assets generally pass according to the beneficiary information maintained by the financial institution, employer, or insurance company, the designations may take precedence over the instructions in your will. VWM will help identify any missing or outdated information and coordinate your designations with your broader financial and estate plan. When appropriate, we are happy to work with your attorney or tax professional to help ensure your wishes are carried out as intended.

Another key reminder: now that we are more than halfway through the year, it is a good time to review your year-to-date tax situation. While there is still plenty of time to make adjustments, reviewing capital gains, ordinary income, dividends, interest, and tax withholdings can help ensure you remain on track for year-end. If you need VWM’s assistance coordinating any of this information with your tax preparer, please let us know. We are happy to help.

VWM Update

Bill and Marissa Purdy welcomed their first child, Vivianne Nicole, on March 11th.  Congratulations, Bill and Marissa!

As always, we thank you for your business and continued trust in our firm.

Enjoy the rest of summer!

Nick Ventura
Founder and CEO