Practice Simple Patience In A Sideways Market

What leadership shifts and global markets are telling us.

The Sideways Market

Since October 2025, the market has struggled to make meaningful new highs. Instead, as you’ll see in the chart below, prices have moved up and down within a defined range (orange box). In market speak, this is called being “range bound.”

Source: Stockcharts.com as of 2/11/26

When markets are range bound, it helps to picture prices moving inside this box, bouncing between recent highs and lows. For illustration, I’m using the Invesco QQQ ETF, which tracks the 100 largest companies in the Nasdaq.

I focus on the “Qs” because of their heavy weighting toward the biggest, most influential companies in the market. When this index is leading, the broader market usually has more energy and momentum.

What’s notable right now is that this typical leader is lagging. Since October, money has been rotating out of growth and technology stocks and into more value-oriented, real-economy companies.

You can see this clearly in the second chart, which compares Vanguard’s Growth ETF (VUG) to its Value ETF (VTV). When the line is sloping down, the trend favors value stocks, suggesting investors are currently more comfortable owning companies tied to tangible earnings and cash flow than future growth promises.

Source: stockcharts.com as of 2/11/26

So what does all of this mean for the average investor?

For now, the answer is simple: stay neutral.

This is not the time to be overly aggressive, but it’s also not the time to retreat entirely. I’m waiting for the QQQ to clearly break out of its range, either higher or lower. That move will likely give us a stronger signal about whether to lean a bit more aggressive or more conservative.

Until then, patience and neutrality are king (just ask Switzerland!).

Everyone Else but Us

While the US market has been moving sideways, international stocks have persistently been making new highs relative to US stocks. Asia excluding Japan, Latin America, South Korea, and parts of Europe have all been strong areas recently.

I’m glad many client portfolios now have exposure to these markets after years of international underperformance. That diversification has meaningfully helped returns during this period of US market choppiness.

One big reason for this strength has been a weaker US dollar. When the dollar falls, international stocks tend to benefit for a few reasons:

• Foreign earnings translate into more US dollars

• US-based investors get a currency tailwind on overseas assets

• Capital often flows toward markets that look cheaper in relative terms

  
  

That said, it’s important to keep expectations grounded. There’s a well-known saying in investing: “All correlations go to ONE in a down market.” In plain English, if the US market sells off hard, it usually pulls the rest of the world down with it, regardless of where those stocks are located.

International exposure helps, but it doesn’t make portfolios immune from drawdowns.

The Benefit of an Early Pullback

At this stage, a market pullback of 10–15% would be both healthy and normal. In fact, it could set the stage for a stronger finish later this year.

Learning to welcome these pullbacks is important. They let excess enthusiasm cool off, reset expectations, and often create better long-term entry points.

Of course, it’s also true that every major bear market starts as a smaller pullback. While there is little right now suggesting a deep 20–30% decline, the market can do anything at any time for any reason.

That’s why I stay focused on where money is flowing and how leadership is changing. The good news is that markets often give early warning signs before major downturns. My job is to pay attention to those signals, so you don’t have to.

If market downturns make your stomach flip, here’s another timeless reminder: the market will almost certainly be higher long after we are gone. Human creativity, productivity, and problem-solving have a way of continuing forward. Market prices reflect that reality over time.

Discipline, patience, and faith matter. In investing and in life. If you can hold onto those, you’re already doing better than most.

A Small Ask Before I Close

Markets will always move in cycles. Sometimes they are booming. Sometimes they pause and catch their breath. And sometimes they humble us.

Periods like this, when things feel a bit sideways and uncertain, are an uneasy part of the investing game. Try not to get absorbed in predictions, do your best to keep a positive perspective, and stick to a long-term plan that prevents you from reacting to short-term fluctuations.

If someone in your life feels uneasy about markets, unsure how to stay disciplined, or overwhelmed by all the noise, I’d be grateful for an introduction. Referrals from clients remain the most meaningful and important way this practice grows, and I would love to help the people you care about navigate their financial lives with a little calm and clarity.

Thank you, as always, for your trust.