If the market has felt contradictory lately, you’re not imagining it.

Stock prices sit near record highs even as consumer confidence falls and economic headlines turn grim.

Strength and weakness show up side by side, leaving investors unsure which story to believe.

In today’s email, I’m breaking down why markets thrive on contradiction and sharing a simple readiness check for the next bear market.

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

Medicare’s Future: Rising Costs, Fewer Perks, and Hidden Traps Even if you’re not on Medicare right now, chances are someone you love is—and sooner or later, you’ll face those choices yourself. This episode breaks down the 2026 changes + reveals three common Medicare mistakes you need to avoid. 🎙️ Listen now on ​Apple​, ​Spotify​, or ​YouTube​.

Making Sense of a Confusing Market

Most investors welcome rising markets.

But the recent ability of stocks to power higher while headlines paint a gloomy picture has left many people scratching their heads.

To understand this contradiction, it helps to look at both sides of today’s economic story.

What Looks Strong

• Stock prices are at or near all-time highs.
• Corporate earnings are rising.
• The economy is still growing.
• Companies are investing in the future.
• Average hourly earnings have outpaced inflation for more than two years.
• New business formation is among the highest in decades.
• Consumer spending remains above the pre-pandemic trendline.

What Worries People

• Consumer sentiment is weak.
• Valuations—especially among recent winners—are elevated.
• The dollar has shown notable weakness.
• Unemployment is inching higher.
• The Fed appears poised to cut rates in response to a softer labor market.
• Inflation has run above the Fed’s 2% target for years.
• The scope and impact of tariffs remain uncertain.

So, which story “wins”?

The truth is neither.

As Tom Peters once quipped:

That’s why prediction isn’t the answer. Preparation is.

A Counterintuitive Insight

One of the most overlooked facts about markets is that consumer sentiment and stock performance often move in opposite directions.

Historically, when consumer confidence is high (peaks), the S&P 500 has delivered only modest gains in the following 12 months (+3.9% on average).

But when sentiment is low (troughs), markets have tended to rebound strongly, averaging +24.1%.

By that logic, today’s weak sentiment may actually act as a stabilizer.

Investors who feel uneasy are less likely to be overextended, and pessimism has already been “priced in.”

It’s an inversion worth remembering when the data feels contradictory.

Prepare, Don’t Predict

The temptation in times like these is to predict which side of the ledger will win.

But prediction isn’t the answer. Preparation is.

Markets are forward-looking, but investors live in the present.

The only real control we have is how we structure portfolios and plans.

True endurance means sticking to principles even when they feel counterintuitive.

Recent history proves the point.

Many experts warned of a prolonged downturn in 2020 and again in 2022.

• Those who abandoned their plans missed the recovery.
• Those who stayed disciplined benefited when markets defied the forecasts.

But that doesn’t mean today’s strength guarantees tomorrow’s outcomes.

History suggests periods of strong returns are often followed by stretches that look different.

The takeaway: preparation beats prediction—every time.

Bear Market Readiness Check

Are you prepared for another bear market?

It isn’t a matter of “if,” but “when.”

A practical way to answer is to evaluate your contingency reserves—assets designed not for return, but for stability.

Do you have enough in low-volatility holdings (e.g., cash, short-term Treasuries, CDs, high-quality bonds) to cover at least 3–5 years of planned withdrawals?

​Retirement planning research highlights that these reserves buy you the most valuable asset of all: time.

Time for markets to recover, time to avoid selling at lows, and time to let equities do what they do best over longer periods.

If you can answer yes, you’ve reduced both risk and anxiety.

If not, the adjustment is clear: now is the time to build the buffer.

Bottom Line

We don’t control headlines, the Fed, or global trade.

But we do control how prepared we are.

Keep your plan current. Keep your reserves funded. And keep your discipline intact.

Confusion in markets isn’t a bug; it’s a feature.

And thriving as an investor doesn’t come from outguessing the next headline, but from knowing that, whatever comes next, your plan already accounts for it.

📚 What I've Been Reading

• The Rate Cut We've All Been Waiting For (Brew Markets)
• What We've Learned From 150 Years of Stock Market Crashes (Morningstar)
• Do You Know What's In Your Target Date Fund? (Center for Retirement Research)
• Rising Healthcare Costs Will Weigh on Consumers (Axios)
• Get Off Social Media (Nick Maggiulli)
• The Benefits of Boredom (HBR)

Thank you for reading!

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

Stay wealthy,

Taylor Schulte, CFP®