Beneath the Surface: What the Market Isn’t Telling You
by Jacob Woodrum, CFA, CFP®
Lead Investment Strategist
About a year and a half ago, we were down in Southport over Labor Day weekend.
My wife and I had our son Kaiden with us, he was just over a year old at the time, and we were there with our family, including my wife’s parents. We decided to book a sunset boat ride together. Nothing complicated. Just a chance to get out on the water, enjoy the evening, and maybe spot a few dolphins.
It ended up being one of those nights you don’t forget.
The weather was perfect. Warm, but not too hot. The water was calm. The kind of calm that makes everything feel easy. I specifically remember Kaiden having his little, blue life jacket on, completely locked in, smiling at everything. We caught the sunset just right, and sure enough, a few dolphins made an appearance.
From the surface, it was flawless.
But being out there, you’re reminded of something simple: just because the water looks calm doesn’t mean there isn’t a lot happening underneath.
That’s a good reminder of last year and where we are in today’s market as well.
On the surface in 2025, things looked relatively steady. The S&P 500 gained nearly 18% for the year: a solid result that, at a headline level, can feel reassured to investors.
But when you look below the surface, the story changes.
In that same year, 72% of stocks in the index experienced a drawdown of at least 10% at some point. Nearly three out of four companies hit meaningful turbulence, even in a year that looked strong from the outside.
And that trend hasn’t gone away.
So far in 2026, about 40% of stocks have already experienced similar pullbacks. Oil prices are higher. Geopolitics remain unsettled. Yet the index continues to push forward… while underneath, there’s a lot more movement than most people realize.
This is what we call dispersion.
And in many ways, it’s where opportunity lives.
When everything moves together, there’s not much to do. Markets rise, markets fall, and you’re mostly along for the ride.
But when returns begin to spread out, when some companies are doing well while others quietly struggle, that’s when thoughtful decisions start to matter more.
It’s less about reacting to headlines, and more about doing our best to understand what’s happening beneath them.
Environments like this can create opportunities to be more intentional. To selectively rebalance. To take advantage of areas that have pulled back. To incorporate tax-aware strategies that can add value over time.
It’s also a good reminder of something we talk about often: the index is not always your experience.
You might hear that “the market is up,” but that doesn’t always match what you’re seeing in your own portfolio. And that disconnect often comes from exactly what this chart highlights, there’s a lot happening below the surface that the headline number doesn’t capture.
That’s not a flaw in diversification. It’s part of the design.
Some areas lead. Others lag. And over time, that balance is what creates resilience.
So while the surface may look calm, we’re paying close attention to what’s underneath.
Because over time, it’s not the headlines or the index level that drive outcomes, it’s the decisions made beneath the surface. The quiet ones. The thoughtful ones. The ones that don’t always make the news, but matter more than most realize.
That’s where experience comes in. Not just knowing what’s happening, but understanding what it means, and what’s worth acting on.
It also helps to have someone alongside you who sees what you might not, who understands where you’re trying to go, and helps you navigate with a little more clarity and confidence along the way.
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