It’s easy to have news headlines frame our investment mood.
We react to presidents and politics and justify our view of investing based on which side of the aisle we are on. Or we look at tragic wars or geopolitical tensions and tariffs in the world and wonder how the stock market can continue to rise.
Sometimes it’s as simple as earnings.
And earnings have been quite good this year. They have been coming in much higher than expected—7% higher.1
Furthermore, do you know what else hit all-time highs last week?
Not just the stock market.
Estimated future earnings did too.2 Expectations impact existing prices.
A big part of positive investment returns this year has been due to AI. Artificial Intelligence exposed companies—and utilities, which are connected to powering AI—are leading the way.3
Many stock valuations, especially of US large companies, are also high.
Here are valuations by sector4:
Of course, this does not mean that the upward-trending stock market will pop and decline, especially if earnings continue to do well. It is something to keep an eye on, though.
Your investment strategy should be tied to your time horizon, income, financial goals, and risk tolerance—not simply the color of the markets each morning. It’s human nature to get tied to the sentiment of the moment—buying or selling when the crowd is doing the same things—but don’t let sentiment alone dictate your investment strategy. One person put it this way:
The stock market is filled with individuals who know the price of everything, but the value of nothing.
Don’t be that kind of investor.
Remember, too, that while one reason stocks have risen is due to earnings, your own earnings can make a big difference in your overall net worth. For those still working, don’t simply focus on what stock might go up, but on increasing your own earning power.
Most importantly, keep the why behind your wealth in focus and do not let the value of your investments—up or down—shape the mood of your life.
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Sources:
1. Chart from Goldman Sachs via Blake Millard’s email 8/13/2025.
2. Published on X by Matt Cerminaro (@mattcerminaro) on August 12, 2025. Accessed online: https://x.com/mattcerminaro/status/1955330831158804744/photo/1
3. Chart from Goldman Sachs via Hamilton Lane’s Blaine Rollins’ research brief on August 12, 2025. Accessed online: https://www.hamiltonlane.com/en-us/insight/weekly-research-briefing/weekly-research-briefing-meteor-showers
4. Ibid.