Good Afternoon,

2026 has started on a relatively positive note in the stock market, but the leadership looks different than the last few years.

The last three years have been dominated by the “Mag 7”, the seven largest U.S. companies by market cap (Amazon, Tesla, Alphabet, Meta, Apple, Nvidia, and Microsoft). They’ve driven a majority (over half) on the index’s performance the last 3 years due to their weighting in the S&P 500.

But for 2026? Completely different story. Through the end of January, these names are flat while the over names in the index are up over 3%. Even beyond the Mag 7, the rest of the world is still outperforming the U.S., up 9% while the U.S. is flat, chart below.

Zoom out to an even bigger picture and the trend is more dramatic in the chart above going back to the beginning of 2025. This is why it’s important to own other asset classes outside of just the U.S.

Is there action to take based on the above? Not necessarily. If you have a diversified portfolio with us, we’re capturing these international market gains through our asset allocated portfolios. We’ve historically had around a 15% allocation to international, but we’ve bumped up our allocation to 20% over the past year to capture this trend. It’s not that we don’t believe in the U.S. and its ability to perform long-term. For now, with a weakening U.S. dollar, the momentum is behind international.

Beyond a variety of variables that could impact this trend, we still remain positive on U.S. equities. The foundation of global innovation is found right here in the United States. With how fast AI is moving, there’s no place we’d rather be weighted to than our country. We believe we’re still in the first inning of AI and it’s only going to move faster.

Though, that doesn’t mean the stock market will only go up. As we know and can expect, new technologies and advancements can yield increased volatility, ups and downs in the stock market, on a routine basis. As an example, Amazon stock had to experience a 90%+ decline in stock price during the dotcom bubble before becoming the powerhouse we know it as today. Remaining diversified is the only way to reduce volatility while staying invested in the success of AI across the world.

Expect more updates from our team this year with commentary on the market and research we’re doing. We’re excited to share more!