You probably know that the US stock market is higher on the year.
It’s clocking in at a total return of about 13%.
But did you know that the US stock market—by one metric—is also cheaper than it was at the beginning of the year?
According to DataTrek, valuations are 14% lower than the start of the year: “Valuations are actually -14 percent lower than at the start of the year (22.2x to 19.1x for the S&P 500).”1
You read that right: higher and cheaper.
That’s worth knowing when there have been a lot of scary headlines lately. With alarms sounding on AI, government debt, oil prices, and interest rates in the bond market, investors can feel stuck.
When it comes to interest rates in the bond market, Cullen Roche of Disciplined Funds is not sounding the alarm. Last week he published this on X:
Lots of scary talk in bonds these days, but it's mostly recency bias. Since 1960 the 10 year yield has averaged 5.8%. We're at 5% - below average. If you'd fallen asleep 20 years ago and woke up today you'd think nothing happened in the bond market the entire time. Ignore all the sovereign debt crisis talk.
Inflation expectations are adjusting to something more historically normalized. Carry on.2
I’m not here to alleviate all concerns about AI or government debt, but I do know that making investment decisions off of alarmism doesn’t always work well.
Jensen Huang of Nvidia said it well on the Ezra Klein show last week.
Don't think for a second that because you are an 'alarmist' that you are doing a social good.3
Whether or not you think he is right on that in the context of AI, it’s a warning worth pondering in and of itself.
Those most after the “social good” (or selling you a new investment idea, for that matter) don’t automatically have your best interests in mind.
There will always be doomers around investing. And while nobody knows the future, historically speaking, doing nothing with your money hasn’t often been a good option.
Bonds have outperformed cash, and stocks have delivered roughly double what bonds have.4
Stocks being cheaper than where they were at the beginning of the year doesn’t mean they won’t decline. And red alert bells of alarm on various parts of the economy or society don’t mean those fears will come true.
You should make financial decisions that appropriately weigh the risks of investing and not investing. Ultimately, the risk of doing nothing due to alarmism is that the troubling reality of inflation destroying the purchasing power of your cash. Keeping cash feels stable, but the prices of what that cash can buy keep getting more expensive year after year.
This may not make for a clicky headline, but the best investment decisions aren’t normally made from shrill alarm or salesy assurances.
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Sources:
1. “Treasury Yield Triggers for Stocks, Fund Flows”, September 23, 2026 email.
2. Quote and chart published on X on September 24, 2026. Accessed online.
3. YouTube shorts. Jensen Huang: A.I. Alarmists Are ‘Irresponsible’ | The Ezra Klein Show. Accessed online.
4. Chart from Ben Carlson, “Historical Returns for Stocks, Bonds, & Cash”, January 14, 2024. Accessed online.