INVESTING
Corporate earnings remain strong, the Federal Reserve is gradually bringing rates down, and deregulation and energy policy are providing tailwinds, he says.“ If we think about the positives in the markets and we think about long-term goals, we should be fine.”
Concentration, Debt and Volatility While clients tend to focus on market direction, advisors say they are increasingly focused on portfolio structure. High equity concentration— particularly in mega-cap technology stocks— is a recurring concern. Barberis warns that under these conditions a sharp re-rating could create short-term volatility even if the economy remains sound.
Fiscal sustainability is another long-term issue on advisors’ radar. Barberis says that U. S. debt levels will be a drag on growth and
policy flexibility over time— though they aren’ t an imminent crisis. Others are watching geopolitical risk, policy uncertainty and the lagged effects of higher interest rates on consumers and commercial real estate.
While most clients are uneasy about the volatility, advisors whose investment style capitalizes on it couldn’ t have hoped for a better year than 2025. And its continuation in 2026 is welcome news to them.
“ This year we’ ve seen north of 30 volatility shocks,” says Stephanie Hughes, CEO of Wiss Family Office in New York.“ That’ s a lot.” Rather than retreat, her firm uses volatility to harvest tax losses and generate tax alpha, measuring success in net returns rather than headline performance.
“ This is the ideal environment for our model. Lots of volatility, but then growth in the equity markets,” she says.“ So we’ re winning whether the market’ s down or whether the market’ s up. If the client can see all of that, then they feel more supported as they stay invested.”
Hughes says she hopes to see strongerthan-expected bond returns and a cooling labor market that should ease inflation, even if emotionally it feels like a downturn.“ If you look at the productivity and the growth, the numbers are still strong.”
But Clients Still Worry
Clients, by contrast, tend to experience markets emotionally. Barberis says client concerns cluster around three themes: a market correction, political instability, and their job security in an AI-driven economy. For those near or in retirement, there is also anxiety about whether losses can be recovered.“ There’ s a constant tension between fear of missing out and fear of losing what they’ ve already made,” he says.
Fiscal sustainability is another long-term issue on advisors’ radar. Barberis says that U. S. debt levels will be a drag on growth and policy flexibility over time— though they aren’ t an imminent crisis.
Advisors attribute the gap between advisor and client perspectives to time horizon and media exposure.“ Advisors live in long time horizons; clients live day-to-day,” Barberis says.“ Media is rewarded for urgency. We’ re rewarded for fiduciary discipline.”
Amendola says he sees a similar disconnect. Many of his clients tell him they feel overwhelmed by negative headlines and confused by the constant focus on the Federal Reserve.“ They felt like there’ s too much focus on the negatives and not enough on the positives,” he says, even as they acknowledge that inflation has eased and the economy continues to grow.
Hughes says this uncertainty is common, even among the very wealthy. To handle it, her firm creates financial plans and stress-tests the cash flows for its more anxious clients, showing them that they’ re meeting their financial goals.
“ We’ re looking at the yield curve all the time, whether it’ s munis, Treasurys, corporates— we’ re stabilizing portfolios with bonds. We also are invested in private markets for the clients that are interested and have the liquidity profile to do that. That’ s another bucket to diversify your investments,” she says.“ And then on the stock side, we buy a lot of securities, so we’ re not concentrated in one stock or one area. We are fully spread across the market, which does help. And then we’ re looking at different buckets for different time horizons.”
Is This A Bubble Or Isn’ t It?
Despite media chatter about bubbles— particularly in the AI and large-cap technology industries— most advisors interviewed reject that characterization, and Amendola draws a clear distinction between speculative manias and structural shifts.“ Nvidia isn’ t Pets. com,” he says. Meta isn’ t either, he adds.
While valuations warrant scrutiny, he views AI as a long-term industrial transformation rather than a short-term mania with a bubble effect.“ What would cause me concern is if some of the larger U. S. companies missed earnings,” Amendola says.“ That would be a concern. Do I share that with clients? No. We talk about earnings, but I don’ t say to them,‘ Boy, I’ m really happy we made earnings this quarter.’”
Barberis also points to earnings strength, noting that 83 % of S & P 500 companies beat earnings expectations in the most recent quarter.“ That’ s not bubble behavior— that’ s broad-based operating strength,” he says.
When it comes to investing in gold and bitcoin, advisors emphasize the role of these assets and how big people’ s positions are.
The role of gold is to be a hedge, Barberis says, while bitcoin is a volatile growth asset. He argues that investors who succeed with either item tend to be tactical and don’ t actually treat them as core holdings.
Amendola says his firm is not overallocated to either of those assets, though both appear in client portfolios via exchangetraded funds when appropriate.“ One size does not fit all,” he says, adding that most conversations with clients still revolve around portfolios split 60 / 40 or 70 / 30 be-
36 | FINANCIAL ADVISOR MAGAZINE | JANUARY / FEBRUARY 2026 WWW. FA-MAG. COM