First Quarter 2026 Market Review-Staying the Course
First Quarter 2026 Market Review – Staying the Course
The first quarter of 2026 was a reminder that markets don’t move in straight lines—and that’s exactly why we plan the way we do.
After a strong finish to 2025, markets experienced some volatility early in the year. U.S. stocks saw periods of pullback as investors digested shifting expectations around interest rates, inflation trends, and global economic growth. International markets were mixed, with some strength in developed markets offset by continued uncertainty in certain regions. Fixed income provided more stability, with bond yields moderating and helping support returns in high-quality bonds.
While headlines often focus on short-term uncertainty, this type of market movement is both normal and expected.
Market Returns – Q1 2026
- S&P 500 Index: -3.2%
- Russell 2000 Index: -5.6%
- MSCI EAFE Index: +2.1%
- Bloomberg U.S. Aggregate Bond Index: +1.8%
Volatility Is Not a Surprise—It’s Part of the Plan
As a financial planning–focused firm, we don’t react to volatility—we prepare for it.
Your investment portfolio is intentionally diversified across asset classes, designed to participate in market growth while also helping manage the inevitable periods of decline. More importantly, your financial plan is built with the understanding that markets will experience ups and downs along the way.
In other words, what we experienced this quarter is not something that requires a change—it’s something we anticipated.
The Role of Your Financial Plan
Your financial plan serves as the foundation for all investment decisions. It incorporates:
Long-term return expectations
- Periods of market stress and recovery
- Cash flow needs and withdrawal strategies
- Risk tolerance aligned with your goals
Because of this, short-term market movements—whether positive or negative—do not dictate long-term decisions.
Staying Invested Matters
History has consistently shown that investor behavior—especially attempts to time the market—can have a far greater impact on outcomes than the markets themselves. Periods of volatility often cluster around some of the best long-term opportunities, which is why remaining disciplined is so important.
Missing even a handful of strong market days can significantly impact long-term returns. Staying invested, rather than reacting emotionally, remains one of the most important drivers of success.
Looking Ahead
As we move further into 2026, markets will continue to respond to economic data, central bank policy decisions, and geopolitical developments. While we cannot predict short-term movements, we can remain confident in the structure of your plan.
We will continue to monitor your portfolio and make thoughtful adjustments when necessary—but only when those changes align with your long-term goals, not short-term market noise.
Sources: Market index returns are based on widely cited benchmarks including the S&P 500 Index, MSCI EAFE Index, Russell 2000 Index, and Bloomberg U.S. Aggregate Bond Index. Data referenced from sources such as Morningstar Direct, Bloomberg, and JPMorgan Asset Management quarterly market data as of March 31, 2026. Index returns are for illustrative purposes only and do not reflect the performance of any specific investment. Past performance is not indicative of future results.
The views stated in this letter are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. A diversified portfolio does not assure a profit or protect against loss in a declining market. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. The Russell 2000 is a stock market index measuring the performance of 2000 small capitalization stocks. It represents the 2000 smallest companies in the Russell 3000 Index, which in turn represents the 3000 largest companies in the U.S.. Thus, the Russell 2000 is a barometer of small-cap stocks. Though small, the companies represented by the Russell 2000 are not the smallest of the small as they are not penny stocks. The Russell 2000 is weighted by the market capitalization of the stocks. The MSCI EAFE Index is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted. The Bloomberg U.S. Aggregate Total Return Value Unhedged Index, also known as ‘Bloomberg U.S. Aggregate Bond Index’ formerly known as the ‘Barclays Capital U.S. Aggregate Bond Index’, and prior to that, ‘Lehman Aggregate Bond Index’, is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).