Halfway Through 2026: What Your Gut Reactions Reveal About Your Investment Plan
We're at the halfway point of the year. If you manage your own investments, or even if someone else manages them for you, there's a decent chance you've had at least one moment since January where you thought about making a change. A headline that rattled you. A prediction from someone confident-sounding on television. A friend's story about a stock that took off. A gut feeling that this might be the year to get out, get in, or get different.
That instinct is completely normal. It's also almost always a mistake.
WHY HAVING AN OPINION ABOUT THE MARKET IS HARDER THAN IT LOOKS
Here's the uncomfortable part: having a strong opinion about where markets are headed next requires believing you can predict the future better than the market already has. Prices already reflect what's publicly known. That's the core insight behind the Efficient Market Hypothesis, and it has held up remarkably well across decades of academic scrutiny. When a piece of news breaks, it tends to get priced in within moments, long before most individual investors even hear about it. By the time you've formed an opinion based on a headline, the market has usually already moved on.
This doesn't mean markets are always "right" in some cosmic sense. It means they're extremely hard to consistently outguess. The data on professional stock picking backs this up: the majority of actively managed funds underperform their benchmark index over long time horizons, net of fees. So if professionals with research teams and trading floors mostly can't beat the market consistently, what makes a headline or a hunch a reliable basis for a decision?
WHAT ACTUALLY EXPLAINS RETURNS
This is where the Fama-French Three-Factor Model earned its Nobel recognition. Instead of chasing stories about which companies will win or lose, the research identified structural factors, like company size and value characteristics, that help explain differences in returns across the market as a whole. It isn't about picking winners. It's about understanding the dimensions of risk and return that are already built into how markets work, and building a portfolio around those dimensions deliberately.
That's a fundamentally different mindset than most people bring to investing. Most of us, understandably, approach investing decisions the way we approach most decisions: gather information, form a view, act on it. But markets don't reward that process. They tend to reward discipline, broad diversification, and staying invested through the noise.
WHY THIS FEELS HARD (BECAUSE IT IS)
None of this is a knock on anyone who's felt the pull to react to market noise. It isn't a willpower problem. It's a wiring problem. Humans are pattern-seeking, story-driven creatures. We're built to respond to a compelling narrative, not to sit still in the face of one.
This is exactly why we built a class called Myths, short for Dismantling the Myths of Investing. It isn't a sales pitch. It's 90 minutes on what separates evidence-based investing from speculation, and why so much of what passes for financial wisdom is really entertainment dressed up as insight.
THE CASH FLOW CONNECTION
There's a quieter piece of this too. A lot of the anxiety that shows up as "should I change my portfolio" is really cash flow anxiety wearing a market costume. If you're not confident about what's coming in, what's going out, and what's actually available to invest, market noise gets a lot louder. It's a lot easier to sit still through a volatile headline when your cash flow is architected well enough that you're not white-knuckling your monthly numbers.
That's part of why we partner with Currence (livecurrence.com): not because it picks better investments, but because a well-designed cash flow system reduces the anxiety that leads people to abandon good investment plans at exactly the wrong moment.
THE MID-YEAR CHECK YOU ACTUALLY NEED
If you're doing a mid-year review this July, skip the "should I make a change" question. Ask these instead. Am I still diversified according to my actual goals and time horizon? Is my cash flow set up so I'm not making decisions out of anxiety? Have I let a headline talk me into, or out of, anything in the last six months?
If the answer to that last one is yes, that's not a market problem. That's a plan problem, and it's a fixable one.
Curious what an evidence-based mid-year review actually looks like? A quick discovery call at discovery.inbundance.com is the place to start.
Investing and financial planning involve risk, including the possible loss of principal. You should consult a qualified financial professional before making any financial decisions.
Corey Kaster, LUTCF, FSCP is an Investor Coach and founder of Inbundance Wealth Management in Portland, OR
