Rise Advisors Market Outlook November 2026
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Transcript Below
Hi, everybody. This is Zach Harrington from Rise Advisors, and on behalf of all of us at Rise Advisors, I want to take a moment to thank you for watching our November market update. And I sit here on Friday, November 6th at about 12:30 PM, and we're about 24 hours removed from what might be considered the end of the world to some. But we wanted to make sure that we did a market update video a little bit earlier this month, especially given some of the volatility that's taken place in markets this week.
So as always, big part of this is going to be behavioral finance, a big part of it is going to be portfolio construction. But I think it's really important just to kind of take a step back and think about where we sit here, November 6th, coming off of the worst day we've seen in markets in about 19 months going all the way back to the tariff tantrums that took place in 2025. And so when we sit here and we look at what takes place, there's a lot of narratives that are happening and time will tell what's true and what's not true. And so for a lot of folks coming off of the midterm elections on Tuesday night, there was belief that, oh goodness, the market's going to tank. And if you looked at the futures market Tuesday night, that's what took place. So Tuesday night, you had the Democrats starting to win the majority of the legislative branch, futures began taking a big dip to the downside. But then as the sweep of the legislative branch became more and more dominant by the Democratic Party, futures began to rebound and Wednesday was a really nice snapback in markets. And now a lot of people think that might be because of, you know, the fact that the Democrats won and AI moratorium and all these things, but in reality, at least what we believe is that it was likely due to the fact that the majority of the Democratic Party was so broad that they weren't going to be held hostage by inter-party fighting and basically they'd be able to get things actually done and implemented. It wasn't going to be the, this group sitting out, this group sitting in, so on and so forth. So the market likes basically answers and it likes things being permanent. And so with the results of Tuesday's election, the market snaps back on Wednesday. Now with that sharp snapback that we see, we see this massive selloff on Thursday. At the lows, you had the NASDAQ down, you know, over five and a half approaching 6%, the NASDAQ 100 at some points down over 7%, and the broad market selling off, you know, anywhere from three to 6% when you look at different asset classes. It's a washout and it's a massive, massive event. It's really important to take a step back though and keep in mind that things may not always be what they seem. And what I think is going to take place over the next week or two is that we're going to get some clarity around probably some margin call activity, some potential hedge fund liquidations. And when you have a lot of leverage in capital markets, you can get more volatile periods like what we experienced on November 5th. And so as we look through the agenda and what's taking place, I want to start with this great slide that just really puts into perspective how frequently pullbacks happen, especially over the last 5 to 10 years as a lot of these leveraged ETFs, options traders and different types of margin account activity has become more and more prominent in capital markets. So since the lows of 2022, which was kind of in part the Russia-Ukraine conflict, in part rising interest rates, through basically the end of October 2026, we've had eight pullbacks of greater than 5% in that time period. The average of those eight pullbacks is 9.1%, the deepest being the tariff pullback that started as a growth scare in February, capitulated in April with the tariff Rose Garden ceremony selloff that took place there, that was almost 19%.The market almost entered bear market territory there. When we look at the S&P, through the November 5th close, down about 6.3% off of its 52 week high, so not quite to that average, certainly above the 5% threshold for a selloff, but not necessarily in correction territory yet. The NASDAQ has entered correction territory as well as plenty of international markets, specifically in Asia. But these instances are happening far more frequently than people may realize. There's a famous Peter Lynch quote that we'll get to later in the presentation because I'd like to revisit that in these videos over time. But Peter Lynch once said, "Far more money has been lost by investors preparing for corrections than ever has been lost in corrections." When you look at this chart that you're seeing on the screen, just the amount of pullbacks that have happened over the last five years or so, if you though that was the bottom and you got out, you missed a really great run. It's really important to keep that in mind. So, when we look at the November 5th selloff specifically, tech was hit the hardest. So underneath the surface of the S&P 500, you have 11 GIC sectors. Those sectors each represent a proportional amount of it. And so tech was hit the hardest, the S&P was the next broadest, and a lot of that is based on market concentration. So when tech makes up such a sizable amount of the index, of course, that's going to drag down the performance of the indices. Some of the other sectors are really getting hit more based on the high tide or low tide rising or sinking all ships, but pretty significant washout on November 5th. But it's important to look at a broader lens than just one day in the market. And this is a trend that we have talked about on these videos for the better part of the year. What we've seen over the last 12 months is there has been disparity under the surface and a broadening of market participants. So if we look at the last 12 months, the S&P 500 through yesterday's close up about 8.5% for the last 12-month period. Compare that to the value side of the index, which is up 23%. So think about that as more of the value oriented names. This plays a lot into the halo trade that we've talked about a lot in these videos. Companies with hard assets, low obsolescence, meaning they have good hard assets on their balance sheet, and there's a low likelihood that they're going to become obsolete due to artificial intelligence. The growth side of the market, your tech software’s, your AI consistent pieces of the market down 1.6% over that same time period. For those of you who are investors at Rise, you have both of these positions in your portfolios. This is the reason we segregated out, is that you have the ability to buy and sell within each side of the market as necessary. This is a fascinating chart here. And what this looks at is most of the time when you're an investor, you saw it on the last chart, basically over the last 12 months, you're up about 8.5% in the S&P 500. But when we look at what's taking place under the surface, there's so many companies that are represented in those indices for folks that own exchange traded funds or mutual funds that you don't realize how much churn and turnover can actually happen throughout a year. So in 2026, looking at companies that have had a bear market drawdown, meaning 20% or greater selloff off of the high, traditionally, most of the time you see about six out of every 10 companies in the market have that bear market drawdown throughout a year. This year through October 30th, and this doesn't even take into account November 5th, through November 30th, you had 93% of technology companies have had a 20% drawdown in 2026. It's a truly fascinating number. I believe that to be kind of a healthy behavior where even though the market's positive, companies are being held accountable under the surface. Companies that aren't meeting earnings expectations, who are having growth concerns, who may not be making good management decisions, their share prices have been reflected. But as value has picked up the weight and carry of the growth side of it, this hasn't been felt if you just own the broad indices. So a little bit of a positive note that I think is important is once again, asset allocation matters. So we talked about the dispersion of value versus the market versus the growth side of the market. It's also important to look at overweights. So part of what we do within our framework models is we pick tactical overweights. So we pick X number of percent of your portfolio that's going to be overweight to a specific sector in the market. So for the better part of 23, 24, and 25, we were overweight industrials and financials. We knew we were going to be overweight technology based on how they're represented within the index themselves, but we said, "Hey, if the AI thing is for real, somebody is going to have to finance this activity. So the bank is going to make a ton of money in investment banking fees, so let's own financials. And then on top of that, somebody's going to have to build all of these data centers and build the infrastructure, so let's benefit from the industrial side of things." That trade panned out really well. And in October of 2025, we made the decision as a firm that we were going to transition out of the financials and industrials overweight and pick up energy and healthcare. Energy has been the best performing sector year to date and continues to be the best performing sector year to date. And you'll see based on the chart right here going back to essentially the midpoint of the year, the second best performing sector of the year and best performing sector of the back half of the year has been healthcare. So our overweights have worked out and the fact that we're not necessarily focused on just the growth side of the market has really panned out well for investors and is a bright point here in the basically November period of 2026. This gets us to the closing. The video that's going to run at the end of this video is a Peter Lynch speech that he gave basically in front of the Senate in 1993, and it's a famous C-SPAN video. And we've shown it a few times over the years in these market update videos. And I think it's really important and it's a video that I turn to often when periods of market get uncertainty. And so when periods of the market are uncertain, I like to go back and watch this Peter Lynch video and just remind myself that basically declines in equity markets are part of the price of admission. If you want to be a stock owner and you want that long-term capital appreciation that comes with owning equities, sometimes you're going to have to take it on the chin. And so we talked about it earlier in the video, more money has been lost by investors preparing for corrections than was ever lost in the corrections themselves. So it's really important to take a step back and use these as opportunities. Use them as opportunities to buy things that you liked that were depreciated, use them as opportunities to have a litmus test from a behavioral finance standpoint and determine if your asset allocation is or is not appropriate.If you logged into your account on November 5th at night and you couldn't live with the results, it's probably worth a conversation. It's important to keep in mind that declines are normal. So corrections of 10% normally happen once every 18 months to two years. They're a normal part of the market cycle. Every five or six years, we're going to have a bear market. If you can accept that reality and also accept the fact that you can't time them, you don't know if a 6% pullback is going to turn into a 25% bear market. It's cost of doing business. But if your asset allocation is appropriate and you own the right type of fixed income, you own the right type of equity exposure, you can weather these storms well. And that's why for any of you who have sat in a review meeting with any of us at Rise Advisors, that's what we focus on. We can't control what's going to shake out in the market relative to the AI trade or geopolitical concerns or things like that, but we can control our asset allocation and we can make sure that it's appropriate based on what your needs are, whether that's growth, whether it's income, whether it's capital preservation. So in conclusion, if you have concerns or questions around your asset allocation, the state of the world or anything like that, whether you are a client of Rise Advisors or you are not, please don't hesitate to reach out to any of us. We're going to roll the Peter Lynch clip here to end. I hope everybody has a wonderful Thanksgiving and we'll see you in December to see where the world sits at. Thank you so much for watching and have a great rest of your day. Peter Lynch Clip: But you should study history, and history is the important thing you learn from. What you learn from history is the market goes down. It goes down a lot. The math is simple. There's been 93 years this century. This is easy to do. The market's had 50 declines of 10% or more. So 50 declines in 93 years, but once every two years, the market falls 10%. We call that a correction. That means that's a euphemism for losing a lot of money rapidly, but we call it a correction. So, 50 declines in 93 years, about once every two years the market falls 10%. Of those 50 declines, 15 have been 25% or more. That's known as a bear market. We've had 15 declines in 93 years. So every six years, the market's going to have a 25% decline. That's all you need to know. You need to know the market's going to go down sometimes. If you're not ready for that, you shouldn't own stocks. And it's good when it happens. If you like a stock at 14 and it goes to six, that's great. You understand the company, you look at the balance sheet and they're doing fine, and you're hoping to get to 22 with it. 14 to 22 is terrific. Six to 22 is exceptional. So you take advantage of these declines. They're going to happen, no one knows when they're going to happen. People tell you about it after the fact that they predicted it, but they predicted it 53 times. So you can take advantage of the volatility market if you understand what you own.
This presentation is for Informational purposes only.
All investment strategies including rebalancing and diversified asset allocation have risk. Past performance of our investment approach, component holdings and methods does not guarantee future results. Advisory services offered through Rise Advisors, LLC ("Rise") Registered Investment Advisor. While all data is believed to be from reliable sources, accuracy and completeness are not guaranteed.