Monthly Outlook: June 2026

Global stock markets continued to make new highs in May, especially the technology and AI memory chip markets. Nothing seems to stall this bull market and every dip gets bought. Since the 2022 pullback in both stocks and bonds, the S&P500 is up almost 100% with only two small dips. The first dip was April 2025 from the Trump Tariff Tantrum that only lasted one month. And the second dip was the start of the Iran war in April 2026, causing stocks to dip, but for only three weeks. The war is far from over, but the dip sure is! Again, despite myriad catalysts for a downturn, investors just shrug off any bad news and buy, buy, buy.

We certainly benefit from such bullishness with impressive YTD gains across all portfolios. But we’re also aware that new highs have left many stock markets overvalued and extended in price. Markets are priced for perfection, and I feel comfortable saying that the world is far from perfect. Today, the S&P500 is trading at 34x P/E, which is a 100-year high level, even higher than 2007, 2001, and 1929. But the valuation has been sky-high for two years now and the valuation bubble just keeps getting bigger. Clearly, valuation is a “clue” about stock market potential, but only over the long term, as in the next 10 years. It’s a terrible prediction for the year-ahead returns. If we had sold stocks a couple of years ago just because valuations were high, we would have missed a huge bull market.

But still, valuations at 100-year highs and prices extended 10% above their 200-day moving averages does beg the question, “What should we be doing to protect our gains in case the bubble pops?” Below, we’ll discuss some prudent ideas for today’s markets.

Let Your Winners Run

It feels good to have stocks or ETFs that have doubled in price, or even more. And it’s very tempting to take your gains and “lock it in.” Someone once said, “you don’t go broke taking profits.” But that’s not entirely true and evidence doesn’t support that strategy. Many investments that double in value go on to triple, quadruple, or become “10 baggers.” You can’t capture those gains if you constantly cut your winners short. Newton taught us that something in motion stays in motion (until it doesn’t), and the same applies to the momentum of investments. When you’re climbing a hill, you can’t know where the top is until you start going downhill. If you’re still climbing, you’re not at the top. Similarly, no one can predict the top price of an investment. You can use data like valuations, future earnings estimates, and guesses about the economy. But in bull markets, prices will go up until some unknown catalyst comes along that changes the psychology of the masses and leads to selling. It’s best, therefore, to let your winners run, observe and measure the price trends, and only sell once the trend turns downward. We’re not there yet.

Prepare, Don’t Predict

Today, we might call the news, the “noise.” Bloomberg, CNBC, and others constantly present us with experts who are predicting this and that. At best, they can get us to think about the endless possibilities of outcomes, but most of them will be wrong. Have you ever noticed how they don’t flash the past predictions of these experts on the screen before they provide their latest ones? Hmm. Instead, prepare yourself and your portfolio for various outcomes and be disciplined. Diversify your portfolio across many asset classes and strategies. Develop an objective buy/sell strategy that is based on evidence and not “gut” or emotions.

Do Something Productive While You Wait

Since we can’t control what markets do, we should focus on things we can control while we quietly enjoy market gains and watch price trends for any sell signals. For example, we can review estate planning documents, coordinate accounts with your tax situation, review insurance policies and beneficiaries, strategize about income sources, etc. These big picture considerations are just as important to managing your overall wealth as the day-to-day decision making of portfolio management.

At Ryan Investments, we’re aware that global stocks have had a long and productive run and valuations are rich. Stocks are “above tree line” as we might say in Colorado, but they can (and are) still going higher. Our plan is to stay invested as long as the price trends are up, let our winners run, and be prepared and willing to trim for protection when needed. While we wait, we’ll help our clients focus on other wealth management issues.