GoalVest Monthly Update - March
3/9/2026
The markets in February were mixed as March starts off with the Iran conflict
In February, equity markets were mixed after a positive January. This performance was impressive considering the onslaught of negative business headlines. For the month, the S&P 500 was down .8%, the tech-heavy Nasdaq decreased by 2.3%, and the slower growing companies of the Dow Jones Industrials moved up by .3%. Small cap stocks managed a gain of .92% and dividend stocks led the way, moving up 3.9%. While technology-related names did fall in the month, the performance was better across the breadth of the equity markets.
The CBOE Volatility Index (VIX) closed the month at 19.9, a reading just below the 20 level that is considered stable. The VIX did land above a 20 reading for several days in February, peaking at 22 on the 5th before coming down again. As we move through the year, we expect volatility will increase, while remaining within an acceptable range. We note that markets can continue to perform well in higher volatility environments.
Fixed income markets were also positive by 1.6% in February, as measured by the Bloomberg U.S. Aggregate Bond Index. In 2025, bonds were up a solid 7.3% for the year.
The Iran conflict started just as we ended February and has added new uncertainty
As we ended February, there was some choppiness in the equity markets driven by worries of AI-related disruption in certain tech sectors like software. This led to spiraling worries over private credit and equity, especially in software investments.
Market worries are now magnified by the Iran conflict along with the near $100 a barrel price of oil. The first week of March was negative and the VIX spiked to the upper twenties and currently stands at 25.7 on the 9th of March. On balance, the market fall was reasonably modest and trading during the week was orderly.
It is too early to gauge the market impact concerning Iran, but likely the price of oil will remain elevated. As noted below, company earnings have been holding up and this has helped fuel markets.
Economic data
The Bureau of Labor Statistics (BLS) released the January CPI inflation report on February the 13th. The report showed that CPI rose by 2.4% year-over-year and was an encouraging number for the markets. The prior month reported a 2.7% year-over-year CPI number. This low CPI number can help support potential rate cuts if the economy were to slow.
The Federal Reserve Board did not meet in February and will meet on March 18th and announce their actions on the 19th. The current Fed funds rate now stands at 3.5% to 3.75%. Generally, the market expects one or two more cuts in 2026, which will be affected by both CPI rates and strength in the labor markets.
Another successful earnings quarter mostly done
The big driver of the strong markets of the past few years has been earnings growth and whether this growth could be maintained. As a result, this earnings season was in sharp focus and the results were encouraging.
Roughly 73% of companies have reported a positive earnings surprise, driving an aggregate earnings growth rate of 14.2%. This rate is the sixth consecutive quarter of double digit earnings increases.
On a more cautious note, only 55% of the companies gave positive guidance, which was lower than the prior 70-80% positive guidance figure. Overall, estimates for earnings growth remain in the 13-15% range for the full year.
To Sum Up
Our outlook for 2026 continues to be for positive markets, likely in an 8-12% range of growth. We would also expect volatility to increase along with periodic worries about equity valuations, such as the present software sector concern. Additionally, midterm elections have traditionally added to market volatility and we expect this year to be similar. A new factor has taken focus, conflict in the Middle East, and we will be monitoring the situation and the effects on markets closely.
Investment opportunities remain across a wide spectrum and we are broadening into undervalued, underappreciated assets while continuing to expand into private markets. Dividend stocks have been a stand-out and we expect this to continue.
The current market valuation stands at 21.6 times forward earnings. The economy remains in a relatively strong position, and the leading U.S. companies continue to be well managed, profitable, and innovative, thus supporting our positive long-term outlook.
Sources: JP Morgan Asset Management, Bureau of Economic Analysis, Bureau of Labor Statistics, Morningstar, Factset, Barron’s, KKR, and Ycharts
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