February 2026 Newsletter
The drivers of return: earnings, valuation and dividend per Goldman Sachs (GS)
How the market works: Short term - it’s emotion and the flow of money.
(GS calls this “episodic volatility” reaction to short term events.
Long term - it’s earnings. Share price follows earnings….eventually. WFS (GS (above) views data of productivity (navy blue component) + market multiple tolerance for purchase (“pay up” or “discount”- light blue segment) + dividends = red dot/total return.
Note the general consistency of dividends…..keep reading for dividend opportunity of Guided Income Solution.
Investor Stamina: This GS illustration got us thinking about a good client discussion/exercise we call NOW, SOON, LATER…….LATEST.
Despite the reassurance of economic strength, we always prepared for “episodic volatility” in this perplexing world. We suggest a conversation with all clients to build the understanding of their investment structure and hence, build their Investment Stamina.
Key considerations: What are your needs Now, Soon….Later. For career folks: It’s participation and protection. For retirees: It’s protection and participation.
If the market were to jump wildly to news of the day, are you confident in your income and current portfolio structure?
Now: Given unseen confusion, what money can you count on for consistency of income for two years so you can wait it out?
Soon: What money do you view as pretty stable so you can withdraw if needed (RMDs?) without taking a big haircut.
Later: What money can you let navigate the stresses and opportunities because it’s long-term money?
Latest: Ah! estate planning, family care, world improvement
Investor Stamina: Let’s review your portfolio strategies and place them in these categories so you are confident during calm and chaos that you can weather whatever. Review your Multiple Strategy Accounts (MSA) to understand each players contribution. Investigate Guided Income Solutions based on dividends and cashflow as a possible base for stability.
RBC (formerly CNR) Concluding thoughts of 2025/outlook for 2026
2025 was a year of drama and exaggerated expectations about growth in the Ai future. It was a year of noise, adjustments and resilience.
We at RBC respect valuation and expect volatility around policy and geopolitics.
We advance with a roadmap that is disciplined, selective and increasingly focused on where improvement is most likely to show up.
RBC estimate for 2026: S&P 500 + 11-12% based on resilient consumer spending, strong and broadening earnings, and steady fiscal and monetary policy.
www.cnr.com/insights/market-perspectives/january-2026
Leave the workaday world a better place!
Warren Buffett officially retires at 95! Our good wishes that he use this retirement time for new wonders to be enjoyed. Warren, there’s still more fun to be had!!
How the Buffett family plans to give away more than $150 billion
Published Thu, Jan 15 202610:51 AM EST Updated Thu, Jan 15 20261:03 PM EST
- Warren Buffett announced that after his death, his fortune would be directed to a new charitable foundation overseen by his three children.
- The 95-year-old legendary investor requested that all the money be given away within 10 years of his death.
WFS always shared WB’s secret to success: “Start early. Save a lot. Live below your means.”
Expand your reading beyond US authors
Appreciate Community – Open Letter Books—the University of Rochester's nonprofit, literary translation press—is one of only a handful of publishing houses dedicated to increasing access to world literature for English readers. Publishing ten titles in translation each year and running an online literary website called Three Percent, Open Letter searches for works that are extraordinary and influential, works that we hope will become the classics of tomorrow.
Making world literature available in English is crucial to opening our cultural borders, and its availability plays a vital role in maintaining a healthy and vibrant book culture. Open Letter strives to cultivate an audience for these works by helping readers discover imaginative, stunning works of fiction and poetry and by creating a constellation of international writing that is engaging, stimulating, and enduring. (Thanks to client, WI for this good alert!)
We missed the dandy 40% January sale but know there is a subscription program spread over the year. - Sign up for a 6 month (5 books) or 12 month subscription (10 books). Idea: A specialty book club or book buddies among families and/or friends.
Oh Be Joyful!