Shifting from Macro to Micro for a Minute

Six Things You Should Know

1. Equity Markets – were mixed this week with U.S. stocks (S&P 500) falling –0.47% while international stocks (EAFE) grew +0.43%.
2. Fixed Income Markets – were also mixed this week with investment grade bonds (AGG) rising +0.49% and high yield bonds (JNK) declining –0.36%.
3. U.S. PPI – The producer price index rose 0.5% in January, above expectations of a 0.3% gain. Year-over-year prices for goods are now up 1.6%, while prices for services have risen 3.4%.
4. State of the Union – In the annual address the President defended his economic record stating the nation is “bigger, better, richer, and stronger than ever before” while downplaying affordability concerns. The President also spoke on ongoing conflict with Iran, claiming the country is reconstituting their nuclear program with “sinister ambitions,” adding speculation about potential U.S. military intervention.
5. Cybersecurity Reminder- Scammers are increasingly using Remote Access Tools (RATs) along with phishing emails or texts to take control of devices like phones, tablets, and computers. Once installed, these tools can give cybercriminals access to sensitive information, including your Schwab accounts. These attacks can be hard to spot, so if something doesn’t feel right- like unusual account activity or suspicious messages- trust your instincts. If you sense suspicious activity, please call us immediately or report any concerns to Schwab at 800-515-2157. 
6. Key Insight – [VIDEO & ARTICLE] After a number of weeks of macro data and outlooks, we focus this week on some things we can control, namely how we categorize our investments by their purpose, and consequently, how we put them together to address your specific needs and goals.

Insights for Investors

By Tim Mitrovich

Shifting from Macro to Micro for a Minute

I. Intro 

Housing starts, monetary liquidity, Fed policy, US/Iran tensions, Big Tech earnings … The list of items driving headlines, from broader economic data to hyper-specific geopolitical hotspots or singular company earnings, continues to whipsaw the market here in 2026 (see accompanying chart).

We’ve discussed these drivers, and others, in recent weeks (if you missed those and would like a deeper dive), but again, much of our analysis is for emotional preparation to help investors understand what could lie ahead to avoid surprises and the panicked decisions that can accompany them. We are not market timers and certainly don’t want to give any of you the impression you should be either. 

That said, the urge to do something is a challenge/impulse investors feel, especially during trying times such as these. The key is what one does and, of course, does not do. 

I do not know why trying to predict markets and, consequently, making big portfolio decisions tends to be the frame of mind that tempts many investors, but that is likely the last thing one should do. 

Rather, making sure they understand how their portfolio is actually designed and for what purposes would not only be a much better use of their time, but also, based on our experiences, bring them much greater comfort during times of volatility. 

This week, we wanted to tackle this topic and shed a little light on how we think about portfolio construction and framing investments here at TEN Capital. 

II. What is the Purpose of This Investment? 

Ask people the point of investing, and they will usually say “make money,” and while that is certainly true, just as the point of football is “to score touchdowns,” how you achieve that takes much more thought. 

In football, you, of course, want to score touchdowns, but that is not the role of every player; it is likewise with investing. Not every investment one makes has the sole purpose of growth. Growth can take time, and therefore, just as an “offensive line” buys their quarterback and receivers time to score by blocking, a well-constructed portfolio buys time for the risk markets to gain in value. 

Two key aspects of buying time are income and preservation, which are achieved through the appropriate investments. 

While we could of course get very granular, in general, we break investments into three primary buckets: growth, income, and preservation. Investments usually have a secondary purpose, but it is key to begin with their primary role and make sure that it is sufficiently addressed within one’s plan and portfolio. 

Examples of “growth” investments are most typically stocks and private equity, while for income, it may be high-yield bonds, credit, or even real estate. Preservation would focus on cash alternatives and/or bonds with high credit quality and low duration.  

One key to portfolio construction is understanding how to blend these objectives to improve the potential of a portfolio. That means looking beyond basic approaches to stock and bond markets by finding alternative assets and/or approaches, as well as combining them in new ways.  

For example, we often use equity strategies with call-writing overlays. These enable us to help clients maintain stock market exposure over time and to participate in its historic growth, while also enabling us to generate sufficient income for their needs of today. Similarly, real estate has historically struck a nice balance between growth, over time, with contemporary cash generation – albeit with liquidity constraints that must be addressed. 

III. The Corresponding Mindsets for Each  

It isn’t uncommon, particularly in the midst of a raging equity bull market, for clients to look at an income or preservation investment and ask, “Why do I have that? It is not doing much.” Using our analogy above, that is like looking at a left tackle and asking, “Why doesn’t he score many touchdowns?” 

In short, it is not their role. 

Consider, if one is invested in nothing but pure growth vehicles, they would a) likely have liquidity constraints, which could pose an issue if they needed money, b) would have to sell off assets to meet any income needs that might arise or exist, and c) would likely experience a very high-level of volatility. This may be okay for some that are earlier in their careers, but it is far less than ideal for those later-on in life or post a big liquidity event. 

Growth – We encourage clients to look at their growth assets as their tools to achieve future dreams (retirement, second home, etc.), as well as maintain purchasing power by outpacing inflation. 

Income – These assets may appreciate as well over time, but their primary role is to help supplement or replace the income you need to live on today, to avoid having to liquidate any growth assets prematurely or at an inopportune time (e.g. during a major market correction). 

Preservation – Often considered the “boring” investments, until a moment of crisis or emergency, when they suddenly become the “hero.” There isn’t anything exciting about insurance either, until it is necessary that you need it. So too, a boring bond holding may not be exciting until it helps a) address an emergency need, b) buffer the anxiety of a market meltdown by reducing over portfolio volatility, or c) helps provide you the opportunity to take advantage of market volatility by having capital to buy things while there are cheap, and thus, springboard you closer to your goals. 

If you can keep these distinct goals, roles, and mindsets in mind as you approach your investments, we are confident you will find greater clarity and confidence in your approach, whatever the markets may bring. 

In a few weeks, we will build this out further by walking through how we put investments into goal-driven “sleeves/blocks” that help us “build” a portfolio, and how that enables us to improve the personalization and oversight for each client’s portfolio. 

In the meantime, if you or someone you care about needs help applying these to their situation, please do not hesitate to reach out. 

Have a wonderful weekend, 

Tim and the team at TEN Capital

Data, Just the Data

• U.S. Jobless Claims – initial claims rose by 4,000 last week to 212,000 but still remained below expectations. Continuing claims fell by 31,000 to 1,833,000, one of the lowest readings in 10 months. 

• Japan Industrial Production – rose 2.2% in January following 2 months of contraction, but still well below expectations of 5.3% growth. On an annualized basis, production is up 2.3%.

• Euro Area Economic Sentiment – fell to a reading of 98.3 in February, down from January’s 3-year high. Both consumer inflation expectations and manufacturer selling price expectations rose higher, highlighting ongoing inflationary pressures. 

• U.S. Consumer Sentiment – saw a slight downward revision to 56.6 for February’s figure, but still marking the highest reading since August. Inflation expectations saw a marked drop to 3.4% from 4%, the lowest since January 2025.