Market Volatility Ticks Up, but Long-Term Outlook Remains Solid
As I write this, it’s Tuesday, March 3, and it’s been a volatile day in the stock market, which is not surprising. Headlines are swirling, geopolitics are front and center, again, and markets are reacting.1 Times like these can feel a bit unsettling, but it’s important to keep the bigger picture in mind. Let’s start by reviewing the month of February.
Even before the Iran conflict emerged, market volatility was on the rise. More uncertainty over tariffs after the Supreme Court ruled against them was one reason for the spike. Another was the ongoing reassessment of the profit potential of some of the big tech companies that have been leading the market boom for two years. As this happens, volatility is bound to increase, but on the plus side, it is also helping the markets to widen out.
As many tech stock values have shrunk, those in other sectors have risen, giving the markets more parity, which is healthy and better for a wider range of investors. This rotation is reflected in how each of the three major indexes finished February, with the tech-heavy Nasdaq and S&P 500 both down slightly for the month, and the more commerce-based Dow Jones Industrial Average up by 0.3%.2
One Finger on the Trigger
Probably the most important thing to keep in mind about the spike in volatility following the news about Iran is that — thanks mainly to the outsized influence of the AI tech boom — the markets have probably been overvalued for some time. Anytime this happens, it’s typical for big investors to keep one finger on the trigger, so to speak, watching for any kind of rising uncertainty that might tell them, “Now is a good time to take some winnings off the table and sell.”
The Iran situation certainly raises the uncertainty level, but ultimately, I think the volatility spike we saw to start the month is not just a reaction to the situation itself, but a combination of all these factors. In other words, to me, this looks less like panic and more like strategic profit-taking. That’s not unusual, and at this point it doesn’t do much to change the long-term market outlook. I say that from experience, having been in this business for many years and managing assets through just about every kind of market situation imaginable.
So, hopefully that perspective helps if you are feeling a bit unsettled. Also, always keep in mind that because you are invested for income first, capital appreciation second, you are better shielded than most growth-based investors from the potential impacts of any increased volatility down the road. In fact, even if I’m wrong and the market experiences a 10% or even a 20% pullback at some point, you can still rest easy knowing that your income is unaffected, and your principal is more protected against permanent loss.
Your Portfolios
On that note, I’m pleased to report that through the end of February, our strategies have continued to perform impressively. Our median portfolio of bonds and bond-like instruments is up, on average, by about 1.3% year-to-date, depending on your individual holdings. On a pro-rated basis, that puts us on track for over 7% annual return, which is well ahead of our target goal of around 5–6%.
As for our stock dividend strategies, they’ve benefited greatly so far from the market’s rotation away from tech stocks and towards a broader range of companies. Some of our more conservative stock dividend strategies are up as much as 9.5% in just the first two months of the year. That’s not a pro-rata projection for the whole year — it’s simply what’s already happened.
So again, most of you are with us for a very specific reason: to be as sure as you can be that your income is reliable and that your assets are more protected against major market shifts. Keep that in mind anytime you start feeling nervous about screaming headlines or breaking news reports.
Naturally, if I see conditions shifting in a way that might concern you further, I’ll share my perspective in a timely manner. And, of course, you are always welcome to contact our office at any time with any specific questions or concerns.
In the meantime, enjoy your March!
Sources:
1 https://www.nasdaq.com/articles/stock-market-news-feb-27-2026#:~:text=How%20Did%20The%20Benchmarks%20Perform,highs%20and%2088%20new%20lows.
2 https://www.cnbc.com/2026/03/02/stock-market-today-live-updates.html
Investment Advisory Services offered through Sound Income Strategies, LLC, an SEC Registered Investment Advisory Firm. Wright Financial Group and Sound Income Strategies, LLC are not associated entities. Wright Financial Group is a franchisee of Retirement Income Source®. Retirement Income Source® and Sound Income Strategies LLC are associated entities.