MARKET CALL: So Far, So Good For Our Rebalancing Call

Last year, in the December 7 QT, we wrote: "It no longer makes much sense for us to continue recommending overweighting the Information Technology and Communication Services sectors in an S&P 500 portfolio .... The same can be said about overweighting the United States in the All Country World MSCI portfolio." It was time to rebalance, in our opinion, because the two sectors accounted for a remarkable record 46.7% of the S&P 500's market-cap weight on November 5, 2025, while the US accounted for a staggering 65.0% of the market-cap weight of the All Country World MSCI at about the same time.

In the December 13 QT, we wrote: "The S&P 500's Magnificent-7 might be less magnificent in 2026 as their fierce competition in the AI race starts to erode the monopolies they have enjoyed in search (Google), software (Microsoft), retailing (Amazon), advertising (Meta), electric vehicles (Tesla), smartphones (Apple), and GPU chips (Nvidia). The beneficiaries of that competition are likely to be the S&P 500's Impressive 493."