After a strong run for stocks, the mood has become a little more cautious lately.

Inflation, interest rates, and geopolitical risks are back in the headlines, while familiar concerns about valuations and another tech bubble haven’t gone away.

So this feels like a good time to zoom out.

A few charts from the past month offer useful context on longer-term trends and what’s happening beneath the headlines.

In today's email:

• Why today’s market looks different from the dot-com bubble
• How earnings have supported much of the recent rally
• What the latest inflation trend tells us... and more!

As always, I'll wrap up with a few of the best retirement and investing articles I read in the past week.

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Before we dive in, did you catch this week's podcast? 👇

Favorite Charts (August 2026)

#1 - Is This Another Tech Bubble?

For a while now, investors have compared this market run to the dot-com bubble.

It’s an understandable comparison. Technology has driven much of the market’s recent gains, just as it did in the late 1990s.

But the below chart shows an important difference.

Heading into the peak of of the tech bubble, stock prices and valuations surged together, pushing shares further and further ahead of the earnings supporting them.

Over the last two years, we’ve seen something very different: stock prices have climbed sharply while valuations have actually declined. In other words, earnings have grown fast enough to support much of the rise in stock prices.

That doesn’t mean today’s market is cheap or risk-free, but it does make the comparison to the late-1990s bubble far less convincing.

#2 - Valuations Are Actually Falling — Not Rising

Ask most investors whether valuations are higher today or five years ago, and I’d bet most would say today, by a wide margin.

The chart below tells a different story.

Compared with late 2021, valuations are actually lower today, even though the market has climbed nearly 80% since then.

How is that possible?

Because earnings have grown even faster than stock prices, allowing valuations to come down even as the market continued to rise.

Even within technology, the sector at the center of today’s bubble concerns, valuations have fallen enough that they’re now below their 10-year average.

These data points don't necessarily make stocks "cheap," but they does suggest the market’s recent gains have had much stronger earnings support than many investors might assume.

#3 - Buybacks Are on Pace for a Record Year

​Strong earnings have left many U.S. companies flush with cash, and they’re putting more of it toward stock buybacks.

Buyback authorizations are now running at a record pace, and the trend extends well beyond the largest technology companies. In fact, more than two-thirds of announced buybacks are coming from outside the tech sector.

For long-term investors, that can be a positive.

When companies actually follow through on these buybacks and retire more shares than they issue, the number of shares outstanding falls.

That means each remaining share represents a slightly larger ownership stake in the company and a larger claim on its future earnings.

#4 - Inflation Is Finally Heading in the Right Direction

Here’s one encouraging trend that hasn’t received much attention: Core CPI is up just 2.5% over the past year.

More recently, the numbers look even better. Annualize the last three months of Core CPI data, and inflation is running at just 1.6%.

Core CPI excludes food and energy because those prices can swing sharply due to events like wars, weather, and commodity shocks. Removing them can give us a cleaner look at the underlying inflation trend.

The Fed officially focuses on a different inflation measure called PCE, so Core CPI isn’t the final word. Still, the recent data suggests inflation pressures are moving in a much healthier direction.

#5 - Global Diversification Still Pays Off

After the Great Financial Crisis, a popular question emerged:

Why own international stocks when U.S. stocks have performed so well?

Long-term history gives us a good reason.

For investors in France, Japan, and Germany, diversifying globally dramatically improved long-term outcomes.

Even in the U.S., which has enjoyed an extraordinary period of wealth creation, the advantage of staying U.S.-only versus diversifying globally has been surprisingly close.

That’s the value of diversification. We know which countries won in the past, but we have no way of knowing which will lead over the decades ahead.

Bottom Line

Market sentiment can change quickly. The underlying picture usually changes more slowly.

And that’s why it helps to zoom out.

Valuations are lower, earnings remain strong, buybacks are elevated, and recent inflation data has been encouraging.

None of that tells us what happens next.

But it does reinforce why smart diversification and perspective still matter, especially when short-term sentiment turns uneasy.

📚 What I've Been Reading

• Wise Words on Lifelong Learning for Investors (Novel Investor)
• Roth Employer Contributions Come With a 1099-R Surprise (Morningstar)
• IRS Clarifies that $2,500 Trump Account Limit is Per Employee (Journal of Accounting)
• The Index Fund Turns 50: How Jack Bogle Changed Investing Forever (Morningstar)
• This One Thing Will Solve Most of Your Problems (Ryan Holiday)

Thank you for reading!

Please reply to this email with comments, questions, and/or feedback.

Stay wealthy,

Taylor Schulte, CFP®