Rational Reaction: Many Different Asset Classes Have Performed Well This Year
One of the more interesting features of 2026 has been that many asset classes have performed well simultaneously, despite ongoing geopolitical uncertainty and volatility surrounding the conflict in Iran.
Several dynamics have supported markets this year:
• Performance has been broadly diversified across asset classes. Commodities have risen more than 30%, emerging market equities over 20%, and U.S. small cap stocks approximately 15% year-to-date. Rather than relying on a single area of the market, diversified portfolios have benefited from multiple sources of return.
• Underlying fundamentals have remained relatively healthy. Corporate earnings growth has continued to support equity markets, with S&P 500 earnings-per-share growing significantly faster than long-term historical averages. International markets have also benefited from improving economic conditions and comparatively more attractive valuations after years of underperformance relative to U.S. stocks.
• Bonds have continued to serve an important portfolio role, even with relatively flat returns this year. Higher starting yields remain supportive for income-oriented investors and continue to provide diversification benefits during periods of equity volatility. From a portfolio construction standpoint, this matters because resilient portfolios are not built around a single outcome or market environment.
• Markets have also gradually adapted to geopolitical uncertainty. While the conflict in the Middle East remains ongoing, investors and businesses have adjusted expectations around higher energy prices and supply disruptions. As uncertainty becomes more measurable, volatility often moderates. This can be seen in the VIX moving closer to longer-term averages after elevated readings earlier in the year.
At PlanWiser, our quantitative research continuously evaluate changing market conditions across multiple dimensions of risk and opportunity. Rather than attempting to predict geopolitical events directly, our process focuses on how markets themselves are responding to evolving conditions. This allows our portfolios to adapt systematically while remaining grounded in long-term discipline.
Ultimately, environments like this reinforce why diversification, evidence-based investing, and objective risk management remain foundational to long-term wealth building. While short-term narratives will always evolve, maintaining a disciplined framework across many possible outcomes is often one of the most reliable ways to navigate uncertainty over time.