I’m normally a very positive guy, always trying to see the glass as half-full.

But I find myself wondering about how America’s economy and our financial markets continue to power ahead despite what should be some very worrisome events.

First, we’ve had to deal with tariff battles, and now a war with Iran that has left energy markets in turmoil with West Texas Intermediate crude oil above $100 a barrel as of writing this column.

Yet unemployment continues to be very low at just above 4%. Gross Domestic Product is running at about 2%, and the S&P 500 over 5% year to date.

And while the stock market has seen some attention-grabbing volatility, the CBOE Volatility Index (“VIX”) currently at 18 is well between its 17-20 longer term average.

So why do I find myself in a half-empty state of mind?

Before getting into some of my concerns, I feel compelled to note having made no changes to my personal investment plans.

My goals remain unchanged, seeking current income to fund my spending needs in retirement and getting long-term growth in seeking to beat inflation.

With decades of managing money for myself and for clients, I’ve lived through lots of ups and downs — some of them downright scary.

I’ve always found it wise to ride out periods of volatility, so long as you entered the downturn in a well-diversified portfolio that was constructed consistent with your situation.

The fact that my personal investments are very well-diversified and based on a moderate risk approach has always helped “smooth the ride” and allow me to stick with the plan.

But there are some issues that have reminded me this might be a good time to make sure my seat belt is securely fastened, as the airlines often say when some turbulence is ahead.

• Stock market concentration. Just seven stocks now account for 36% of the S&P500 value. These “Magnificent 7” (Nvidia, Apple, Microsoft, Alphabet, Meta, Amazon and Tesla) have returned about 28% over the past 12 months, with the other 493 stocks in the index returning just around 1%.
  
• Unprecedented capital spending. CapEx from Alphabet, Amazon, Meta and Microsoft is expected to surpass $700 billion in 2026 — and according to accounting giant KPMG, spending may exceed $1 trillion next year.
  
• Record fundraising. OpenAI and Anthropic have seen valuations surge as they raise massive amounts of financing in secondary markets. Anthropic reached an implied valuation of roughly $1 trillion with OpenAI right behind. It took Apple 42 years and Microsoft 33 to hit that milestone.

• Global energy crisis. The closure of the Strait of Hormuz has stopped the flow of roughly 20% of global oil supply. Some countries like Pakistan and the Philippines are implementing fuel rationing and industrial shutdowns. Other countries may face similar problems before long. Europe is facing a critical jet fuel shortage and discount airline Spirit just ceased operations with fuel prices putting them over the edge into bankruptcy. Fortunately, changes over the past 50 years have left the United States energy independent — unlike during the 1970s — but prices are set based on global supply and demand and you know what that’s meant to prices at the pump. Fuel costs are already impacting lower- and middle-income households, and inflation is ticking up with signs the CPI may hit 4%. 

• Consumer debt. According to the Federal Reserve, consumer debt hit a record $18.8 trillion. High interest rates, gas prices and inflation have forced many consumers to use credit cards for daily expenses. Mortgage delinquencies and foreclosures have been slowly increasing to levels not seen since early 2021. Note that consumer spending accounts for about 70% of U.S. GDP, so what happens if consumers, especially lower-middle income families, have to start cutting back?

• Recession risks. Moody’s recently boosted its recession outlook to 48%, with many economists expressing similar expectations. Top economists note risks from “extreme speculation” in artificial intelligence and high-priced equities, which could lead to a significant downturn if market sentiment shifts, according to CNBC.

• Berkshire Hathaway cash. Warren Buffett, and now his successor, Greg Abel, are sitting on almost $400 billion of cash, apparently waiting for better stock prices. At their annual meeting, Buffett hinted that stock prices are just “too high” to be a good value.

• Stock market history. Since 1929, there have been many “bear markets” (defined as a decline of at least 20%). Studies suggest there have been 13-27 of these big declines since the Great Depression, depending on the index and definition used. Let us not forget “Black Monday” in October 1987 when stocks fell 22% in one day. More recent bear markets you will almost certainly remember include the 2007-2008 financial crisis and 2020 worldwide crash due to the COVID-19 pandemic. 

But lest you become too concerned, note that both J.P. Morgan and Goldman Sachs just days ago reset their 2026 price target for the S&P 500 at 7,600, about 4% higher than today, based on continued earnings growth expectations.

And for those of you who follow prediction markets, Polymarket shows pricing in a wide range, with a strong probability mass around 7,300-7,450 and smaller bets for more bullish moves.

And corporate earnings announcements have been strong, supporting higher stock valuations.

At minimum, this might be a reasonable time to buckle up for at least a reasonable possibility of more volatile markets ahead.

This can be a good time to think about your financial goals, your time horizon, and perhaps most important, your risk tolerance. It has long been my experience that investors have a knack for talking about how “risk tolerant” they are — until markets tank.

This could be a good time to talk with your financial adviser about risk/return tradeoffs and make sure your portfolio is prudently aligned in meeting your needs before a potential downturn.

As Buffett was quoted, “Only when the tide goes out do you discover who’s been swimming naked” — symbolizing excessive risk-taking when the economy or market turns downward.

If you go into turbulent markets with the right kind of strategy, then hang in there.