The markets are back in positive territory for the year.

Large caps, mid caps, small caps, international, bonds, real estate... most of it back above where the year began.

And yet, the mood doesn't reflect the recovery.

At the same moment stocks were recovering, consumer sentiment hit one of the lowest levels ever recorded.

Lower than the 1970s stagflation era, lower than post-9/11, lower than the Great Financial Crisis, lower than the depths of the pandemic.

In today's email:

• What's driving the disconnect
• What history usually says happens next
• What it means for your retirement plan

Before we dive in, did you catch this weeks podcast episode?

The Most Overlooked Retirement Decision (It’s Not Your Portfolio) ​One of the biggest decisions you’ll face in your 70s and 80s isn’t about your portfolio—it's about where you’ll live, how care will be coordinated, and how it will be paid for. 🎙️ Listen now on ​Apple​, ​Spotify​, or ​YouTube​.

The Market–Mood Disconnect

It's a strange moment.

Stocks and bonds have quietly recovered most of their losses.

Meanwhile, consumer sentiment recently registered its lowest reading in 74 years — worse than during every major crisis most of us can name.

Part of the explanation is obvious: we can't escape the headlines.

War, tariffs, inflation, political dysfunction, energy prices, and now the narrative that AI is going to replace us all; it's a nonstop drumbeat.

So people are bracing for the next shoe to drop, even as portfolios quietly grind higher.

What History Says About Low Sentiment

Here's something fascinating most people miss.

Low consumer sentiment has historically been a bullish signal for stocks, not a bearish one.

According to JPMorgan's Guide to the Markets:

• When consumer sentiment hits a peak, the S&P 500's subsequent 12-month return has averaged 3.9%
• When sentiment hits a trough, the subsequent 12-month return has averaged 24.1%

In other words, the best forward returns have historically shown up when investors felt worst.

That doesn't guarantee the next twelve months will be a replay.

But it does mean the feeling of dread in the headlines isn't a reliable forecast for what comes next.

Historically, it's been closer to the opposite.

Headlines Capture a Moment, Not the Arc

Headlines are designed to amplify what's urgent right now.

They're not designed to describe what's important over the next 10, 20, or 30+ years (which happens to be your actual time horizon in retirement).

Reacting to the daily news is a reliable recipe for disappointment.

And the thing is, every year tends to feel uniquely bad in the moment.

Looking back, we've lived through:

• Intense political divisiveness
• Wars and geopolitical shocks
• Runaway inflation, deflation, and stagflation
• Rapid, disorienting technological change

Each time, the story felt new. And each time, the markets eventually adapted.

Not because markets are clever, but because they reflect the people and businesses inside them.

To quote the late Jack Bogle:

Why This Matters for Your Retirement

If you're retired or close to it, the disconnect between headlines and portfolios has a specific implication:

Don't let one piece of your plan drive decisions about the other.

A few guardrails that help:

• Keep a war chest of 2–3 years of spending in cash and bonds so you're never forced to sell stocks at the wrong time
• Rebalance on a schedule, not on a mood
• Build your portfolio around purpose and time horizon, so short-term needs don’t dictate long-term decisions

When those pieces are in place, headlines become easier to watch, because they no longer threaten your income.

Bottom Line

The markets and the mood may feel out of sync right now, but that’s not unusual.

In many ways, it’s closer to the historical norm.

What continues to matter most in retirement hasn’t changed—patience, discipline, and a plan that isn’t built on reacting to the next headline.

📚 What I've Been Reading

• More than 40% Of Heirs Spend Entire Inheritances Within One Year (ThinkAdvisor)
• Did Millennials or Boomers Have It Harder? We Went Searching for the Answer (WSJ)
• Why Underspending In Retirement Is Rampant (Morningstar)
• How Much Time Are You Spending Just Keeping Up With Being Alive? (Your Brain On Money)
• You’re Not Going to Be Alone in National Parks This Summer (The Conversation)​
• 102 Lessons From the 102 Books I Read This Year (Scott H. Young)​

Thank you for reading!

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

Stay wealthy,

Taylor Schulte, CFP®