- August 30, 2026
Every month I write a newsletter called Noise Reduction, where I try to separate what actually matters in the markets from what’s just noise. Here’s the piece from July that matters most.
July looked like a shrug at the index level — the S&P 500 basically sat still, down just 0.06% on the month. That flat headline hid a real story underneath. Energy jumped 12.6%, financials rose 6.2%, and the equal-weight S&P 500 — where a regional bank counts the same as a mega-cap AI name — gained 1.01% while the cap-weighted index went nowhere and tech dragged, down 3.4%. Money didn’t leave the market. It moved to a different room.
And the earnings back it up. Q2 was one of the strongest quarters outside a post-recession bounce — roughly 45% EPS growth for the S&P 500 — which is exactly why leaning too hard on a handful of mega-cap tech names gets riskier the longer this rally runs. A big overweight can look aggressive after a run this long, and at the index level, the extra reward for taking that risk has all but disappeared.
The index barely moved. Underneath, the market did real work — rewarding earnings and punishing crowding.
That’s the tension worth sitting with. The S&P 500 now trades at a forward P/E near 21x with almost no equity risk premium left — investors are accepting barely any extra reward for owning stocks over bonds. Meanwhile, tech’s own forward P/E actually fell to a one-year low, below its 10-year average, because earnings grew even faster than prices did. Translation: not everything expensive is overvalued, and not everything that ran is safe just because it kept running.
Here’s the honest version: nobody — not the Fed, not Wall Street, not the guy on financial TV with the loud tie — can tell you in advance which five stocks carry the next twelve months. The market just spent a month proving the other 495 stocks in the S&P still matter. Own the whole haystack. Stop trying to find the needle.
What this means for your plan
Concentration risk is easy to miss when it’s working. If a handful of names have carried your portfolio’s returns for the last couple of years, July was a reminder that the same handful can just as easily stop carrying it.
Rebalancing isn’t optional in a market like this. The wider the gap between winners and laggards, the more your original allocation drifts without you doing anything about it.
“Expensive” and “overvalued” aren’t the same thing. Tech got cheaper on a relative basis even as prices rose, because earnings grew faster. Headlines don’t always catch that nuance — your allocation should.
Want to check how concentrated your own portfolio actually is? Let’s talk — no obligation, no bull$h*t.
Disclosure: Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. All indices are unmanaged and investors cannot invest directly into an index. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. It excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. The Bloomberg Aggregate Bond Index is an unmanaged market value-weighted index representing securities that are SEC-registered, taxable, and dollar-denominated. It covers the U.S. investment-grade fixed-rate bond market, with index components for a combination of the Bloomberg government and corporate securities, mortgage-backed pass-through securities, and asset-backed securities. The Bloomberg U.S. Corporate High Yield Index covers the USD-denominated, non-investment-grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.
Steven Grogan is an investment advisor representative registered with Savvy Advisors, Inc. (“Savvy”). All investment advisory services offered by Steven Grogan are offered through Savvy. Atticus Wealth Management is an independent marketing brand name used by Steven Grogan for advertising and marketing purposes only. Atticus Wealth Management and Savvy are not related or affiliated.
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