By: Reed C. Fraasa, CFP®, AIF®, RLP®
The headlines feel relentless right now.
Two wars grind on overseas. Artificial intelligence promises to remake the economy, and it threatens to eliminate the job you have — some say it threatens more than that. The bond market is selling off, yields sit near 20-year highs, and mortgage rates are climbing with them. The Federal Reserve is holding rates near 3.75%, and some policymakers want to push higher still to fight inflation that won't fall back to target. Midterm elections loom in November. The national debt keeps climbing past records nobody predicted a decade ago.
Add it up, and it feels like the sky is about to fall.
I understand that feeling. I've managed money through enough crises to know how convincing it is. I've also learned something else: this feeling is not new. Investors have faced a version of it in nearly every decade of my career, and before it.
Go back to October 1962. The Cuban Missile Crisis brought the world to the edge of nuclear war, and the stock market dropped hard in a matter of days. Investors who held on caught one of the great bull markets of the postwar era.
A decade later, 1973 and 1974 brought an Arab oil embargo that quadrupled energy prices, a president toppled by Watergate, and inflation and unemployment rising together — a combination economists had insisted couldn't happen. The S&P 500 fell nearly 50% from peak to trough. Then it recovered and kept climbing for the rest of the decade.
By 1979, Iran was holding American hostages and inflation had hit 13%. Paul Volcker pushed interest rates above 19% to break it, and a brutal recession followed. Out of that came one of the longest bull markets in history.
Fewer people remember 2011 the same way, but it belongs on the list. Congress fought to a standstill over the debt ceiling, and S&P stripped the United States of its AAA credit rating for the first time ever. The market dropped nearly 17% in three weeks that August — and closed the year higher than where it started.
Then there's the pair everyone does remember: 2008, when a housing collapse froze the global financial system, and 2020, when a pandemic shut down the world economy in weeks. In both cases, a diversified portfolio built to survive uncertainty, not predict it, carried investors through.
Markets climb a wall of worry.
They almost never climb a wall of certainty, because certainty rarely exists. Today's list of worries is real. So was every list before it.
Here's what the headlines miss. Even with war, rate uncertainty, and political noise, the economy keeps building. Spending on artificial intelligence infrastructure and the energy needed to power it has become one of the strongest forces driving markets higher this year. Hyperscale data centers are under construction across the country. Utilities are expanding generation capacity to keep pace. That capital spending flows through to corporate earnings, to jobs, and to the broader economy, even as it disrupts the workers whose roles it automates.
The disruption shows up clearly in the layoff numbers. White-collar cuts have climbed sharply in 2026, and Amazon, Oracle, and Microsoft have all pointed to AI directly in their restructuring announcements. Software engineers, customer service staff, and entry-level corporate roles have absorbed the brunt of it.
Blue-collar work tells a different story. Construction hiring has remained strong, fueled by the same data center and energy buildout that is driving the AI boom, as well as ongoing housing and infrastructure demand. Electricians, HVAC technicians, and construction managers remain in short supply, and wages for skilled trades continue to rise.
Manufacturing sits in between. The sector lost jobs almost continuously from its January 2023 peak through the end of last year. Since then, it has added workers in four of the past seven months — not a boom, but the first sustained improvement since that 2023 peak.
Midterm election years add their own noise. Markets historically wobble in the months before the vote, then rally once the outcome is known and the uncertainty lifts. The pattern has held often enough that it shouldn't surprise anyone this cycle.
The debt deserves its own word, because it's large and it's growing. But it's not new territory either. US debt as a share of the economy exceeded 100% at the end of World War II — higher than it is today. The country didn't default. It grew. Debt matters for long-term policy choices, tax rates, and interest costs. It has never been a reliable signal for when to sell stocks.
I can't tell you which of these resolves first, or how. I don't know whether the Fed cuts rates or raises them again. I don't know how the wars end, what November changes, or when Washington finally deals with the debt.
Diversification exists for exactly this kind of not-knowing.
A portfolio spread across US and international stocks, large and small companies, growth and value, stocks and bonds, doesn't need to guess correctly. It only needs exposure to whatever is working while limiting the damage from whatever isn't. AI and energy stocks carried the market this year, and a diversified portfolio captured real upside from that. When volatility spikes over war or rate fears, bonds and other diversifying assets cushion the blow.
None of this is a new insight. It's the same discipline that carried investors through 1962, 1974, 1982, 2008, 2011, and 2020. It will carry them through this list too.
At HIGHLAND Financial Advisors, we build portfolios for years like this one — not the calm years, but the ones where every headline argues for panic. A financial plan grounded in your own goals, time horizon, and risk tolerance is what lets you look at a list like today's and stay the course, because the plan already accounted for the fact that markets test investors, often and without warning.
The sky isn't falling. It rarely is. Markets have survived worse lists than this one, and diversification is still the best tool we have for surviving the next.
Reed C. Fraasa is a CERTIFIED FINANCIAL PLANNER™ and founder of HIGHLAND Financial Advisors, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, and investment management. Reed has 30 years of experience as a fiduciary advisor and is the author of The Person is the Plan®, a unique financial planning process. Reed was a frequent guest contributor on PBS Nightly Business Report and has been featured in the New York Times, Wall Street Journal, and Star Ledger newspapers.
The foregoing content reflects the opinions of Highland Financial Advisors, LLC, and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct.
Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns.
Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful or that markets will act as they have in the past.
The above article was written with the assistance of artificial intelligence (AI).