The Weekly Wealth Watch | August 24 2026

August 24, 2026

The Weekly Wealth Watch

August 24, 2026

The Markets

“The biggest opportunities often come from identifying change early and understanding which companies are best positioned to benefit from it.” — Alex Sacerdote, Founder, (Whale Rock Capital Management)

U.S. equity markets pulled back this week following recent strength, with declines across the major indexes. The S&P 500 declined –1.43%, trimming its year-to-date gain to +12.11%. Technology shares experienced greater pressure, as the NASDAQ Composite fell –2.05%, though it remains higher by +12.64% year-to-date. Small-cap stocks also moved lower, with the Russell 2000 declining –1.62% for the week. Despite the pullback, small caps continue to lead the major indexes in 2026 with a strong +21.63% year-to-date return.

In fixed income, the 10-Year Treasury yield increased +0.04%, finishing the week at 4.7%. The relatively modest move in yields came as investors continued to balance the outlook for economic growth, inflation, and future Federal Reserve policy.

The U.S. dollar declined –0.84% for the week, reducing its year-to-date gain to +0.52%. The weaker dollar provided a contrasting backdrop to the decline in equities and coincided with strength across major commodities.

Commodity markets moved sharply higher. WTI crude oil advanced +5.13%, extending its year-to-date gain to an impressive +51.96%. Gold surged +6.72%, bringing its year-to-date return to +8.23%. Strength in both oil and gold highlighted continued investor attention to inflation, global supply dynamics, geopolitical uncertainty, and portfolio diversification.

Overall, this week's market action was a reminder that leadership can change quickly. Equities retreated, Treasury yields moved only modestly higher, the dollar weakened, and commodities provided notable strength. That rotation fits well with this week's broader WCG discussion: different investments—and different factors—can respond very differently as the market environment evolves.

As Alex Sacerdote's investment approach reminds us, identifying long-term change can be more important than reacting to short-term volatility. Markets will continually rotate between leaders and laggards, reinforcing the value of maintaining a disciplined, diversified approach rather than assuming that today's winners—or losers—will remain that way indefinitely.

The Wisdom of Breadth

Is Momentum Getting a Bad Rap? The Factor That Everyone Loves to Hate

“Diversification is the only free lunch in investing” — Harry Markowitz

Momentum has a reputation problem. When it works, investors love it. When markets establish clear leadership and winning stocks continue to win, momentum can appear almost effortless. But when leadership changes suddenly, the same strategy can experience sharp reversals—and investors can quickly question whether momentum still deserves a place in a diversified portfolio.

This week's Portfolio Strategy asks us to look beyond that frustration. Since the late 1990s, value, momentum, quality, and minimum volatility have experienced dramatically different results through the Tech Bubble, Global Financial Crisis, Pandemic, and Post-Pandemic Inflation Surge. No factor consistently won every environment. More importantly, the factor that struggled during one period was sometimes among the strongest performers during the next.

Momentum provides perhaps the most interesting example. During the Tech Bubble period, momentum suffered a painful –44.6% drawdown. Yet over the full period through December 2004, momentum still finished ahead of the other factors with a +33.4% cumulative return. During the Global Financial Crisis, momentum again experienced significant volatility, falling –56.2% from peak to trough. During the Pandemic and Post-Pandemic period, however, it ultimately produced a +71.9% return, second only to quality.

The lesson isn't that momentum is better than the other factors. It's that leadership changes. Quality can shine when investors favor strong balance sheets and durable profitability. Value can benefit when inexpensive companies return to favor. Minimum volatility can provide greater downside resilience during certain market declines. Momentum can capture persistent trends when market leadership becomes established.

Each has a role. The danger comes when investors look backward and assume yesterday's winner will automatically become tomorrow's winner—or that yesterday's loser should simply be removed.

The WCG Input provides a powerful example. Had investors responded to one period by overweighting value and underweighting quality, they would have reduced exposure to the factor that subsequently performed best. That's why diversified exposure across factors can make sense over a full market cycle, depending on an investor's objectives, risk tolerance, and circumstances.Starting points matter, too. Although quality outperformed momentum by nearly 29 percentage points during the most recent period examined, the longer-term picture looks very different. From December 31, 1998 through August 19, 2026, momentum outperformed quality by approximately 302 cumulative percentage points—although annualized, that enormous-looking difference translates to just under 1% per year.

The Wisdom of Diversification isn't an admission that we don't have an opinion. It is recognition that markets evolve, leadership rotates, and no one knows with certainty which factor will dominate the next cycle.

Momentum may be getting a bad rap today because it is experiencing more volatility. Tomorrow could belong to quality, value, minimum volatility—or momentum once again. We simply don't know. And sometimes, acknowledging what we don't know is exactly what makes diversification so powerful.

Wall Street Wisdom

Three Crises, Four Factors, One Pattern

“The essence of investment management is the management of risks, not the management of returns.” — Benjamin Graham

The Tech Bubble, Global Financial Crisis, and Pandemic were very different events. Yet looking across all three reveals one remarkably consistent lesson: factor leadership changes.

Momentum finished strongest during the Tech Bubble period despite experiencing the largest drawdown. Quality emerged as the strongest factor across the Global Financial Crisis period. During the Pandemic and Post-Pandemic Inflation Surge, quality again led, while momentum finished second.

No factor won every race. That is why diversification across factors can matter just as much as diversification across stocks or asset classes. A portfolio doesn't necessarily need every position to lead simultaneously. Different exposures can respond differently as economic conditions, interest rates, valuations, and investor behavior change.

Benjamin Graham's wisdom is especially relevant here. The objective isn't simply to chase whichever factor recently generated the highest return. It is to construct a portfolio capable of navigating environments we cannot perfectly predict.

Sometimes the strongest portfolio isn't built around choosing one winner. It's built around not needing to know the winner in advance.

Thematic Section

The Global Financial Crisis: Quality Shines, Momentum Survives

“You make most of your money in a bear market; you just don't realize it at the time.”— Shelby Cullom Davis

Few environments tested investment strategies as severely as the Global Financial Crisis. Momentum entered the period with strength, gaining +19.9% before its peak, the best pre-peak performance among the four factors examined. But when the crisis intensified, momentum suffered a –56.2% peak-to-trough decline. Value performed even worse, falling –59.7%.

Quality told a different story. It declined –44.6%, the smallest drawdown of the four factors—even better than minimum volatility's –48.6% decline. When markets recovered, all four factors participated strongly, with trough-to-peak gains ranging from approximately 99% to 111%. Over the entire five-year period, quality ultimately finished first at +20.6%. Minimum volatility gained +12.9%, momentum finished approximately flat at +0.5%, and value remained underwater at –14.9%.

The lesson isn't that investors should always own quality and avoid momentum or value. The lesson is that different factors provide different characteristics when market conditions change. Quality's financial strength proved valuable during a severe economic crisis. Momentum suffered—but survived and participated strongly in the recovery. Investors couldn't have known the exact sequence beforehand. That's precisely why the wisdom of breadth matters.

Human Interest

Pandemic + Inflation Surge: Quality Leads Again, Momentum Holds Strong

“In the midst of chaos, there is also opportunity.” — Sun Tzu

Think back to early 2020. Offices emptied. Flights were grounded. Restaurants closed. Markets plunged. Then came enormous stimulus, reopening, supply shortages, inflation, and eventually one of the fastest changes in interest rates investors had experienced in decades. It was almost like experiencing several market cycles compressed into a few years. Through it all, factor leadership kept changing.

During the initial pandemic decline, quality held up best, falling –30.8%, while momentum declined –33.8%. Then came the rebound: momentum surged +114.6%, slightly ahead of quality's +113.5%. When post-pandemic inflation arrived, both struggled again before rebounding strongly.

By the end of the full 2019–2024 period, quality led with +101%, while momentum followed with a strong +71.9%. The human lesson is simple: when circumstances change quickly, adaptability matters. The same is true in investing. We rarely know which challenge comes next, which is why building portfolios for more than one possible future can be more durable than betting everything on a single outcome.

Fun Facts & Figures

Factors by the Numbers

“Know what you own, and know why you own it.”— Peter Lynch

📈 +33.4% — Momentum After the Tech Bubble: Despite suffering a –44.6% drawdown, momentum still finished the full 1998–2004 period as the strongest of the four factors examined.

🛡️ –44.6% — Quality During the Financial Crisis: Quality experienced the smallest drawdown among the four factors during the GFC—even outperforming minimum volatility on downside protection.

🚀 +114.6% — Momentum's Pandemic Rebound: Coming out of the initial pandemic decline, momentum produced the strongest rebound, narrowly beating quality's +113.5%.

🏆 +101% — Quality Wins 2019–2024: Quality finished first over the Pandemic and Post-Pandemic Inflation Surge period, followed by momentum at +71.9%.

🔄 Leadership Doesn't Stay Put: Value weathered the post-pandemic inflation decline better than momentum and quality, demonstrating how quickly factor leadership can rotate when economic conditions change.

📊 302 Percentage Points: From December 31, 1998 through August 19, 2026, momentum cumulatively outperformed quality by approximately 302 percentage points. Yet annualized, the difference was just under 1% per year—a great example of why starting points and time horizons matter.

🧩 Four Factors, Four Jobs: Momentum favors stronger recent price performance; quality emphasizes stronger profitability and financial strength; value focuses on relatively inexpensive securities; and minimum volatility seeks lower portfolio volatility.

On This Day in History – August 24

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” — John F. Kennedy

Windows 95 Changes the Personal Computer

On August 24, 1995, Microsoft officially launched Windows 95, introducing millions of consumers to features that would become familiar parts of everyday computing—including the Start button, taskbar, and a dramatically more accessible personal-computer experience.

The launch became a cultural event, but its longer-term significance was bigger than a piece of software. It demonstrated how quickly leadership can change when innovation, consumer behavior, and technology converge. There is an interesting parallel with this week's investment theme. Just as technology leadership evolves, market leadership evolves too. Value, momentum, quality, and minimum volatility each experience periods when their characteristics align—or fail to align—with the prevailing environment. The challenge is knowing which one will lead next.

Other August 24 Milestones

🌋 79 A.D. — Mount Vesuvius and Pompeii: Traditionally dated to August 24, the eruption of Mount Vesuvius buried Pompeii and neighboring communities, preserving an extraordinary snapshot of Roman life for future generations.

🏛️ 1814 — Washington, D.C. Is Burned: British forces entered Washington during the War of 1812 and burned major government buildings, including the White House and Capitol. The city was rebuilt—a reminder of resilience following extraordinary disruption.

📡 1967 — The First U.S. Satellite Broadcast to Multiple Continents: Advances in satellite communications during the 1960s helped usher in an era when information could increasingly travel around the world almost instantaneously.

💻 1995 — Windows 95 Arrives: Microsoft's landmark operating system helped accelerate the mass adoption of personal computing and became one of the defining technology launches of the decade.

🌍 2006 — Pluto's Classification Changes: The International Astronomical Union formally reclassified Pluto as a dwarf planet. Even something generations believed was settled could change when new evidence and definitions emerged.

The connection to investing is fitting: conditions change, classifications change, and leadership changes. What worked yesterday may not dominate tomorrow. The goal isn't to predict every rotation perfectly, but to build a process capable of adapting when the evidence changes.

“It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” — Commonly attributed to Charles Darwin

Sources & Footnotes:

The Wealth Consulting Group — WCG Weekly Input, “Is Momentum Getting a Bad Rap?” (August 20, 2026). Primary source for this week's investment theme, factor analysis, performance comparisons, definitions, and conclusions regarding diversification. The analysis examines momentum, quality, value, and minimum volatility across the Tech Bubble, Global Financial Crisis, and Pandemic/Post-Pandemic Inflation Surge.
Bloomberg Finance L.P. Source of the MSCI USA factor index performance data used throughout the WCG Weekly Input. The historical analysis includes pre-peak returns, peak-to-trough drawdowns, trough-to-peak recoveries, and terminal returns across the three major market periods.
MSCI — USA Factor Indices. Factor framework referenced in the WCG Weekly Input, including Momentum, Quality, Value, and Minimum Volatility. Momentum emphasizes relatively stronger recent price performance; quality emphasizes profitability and financial strength; value emphasizes relatively lower valuations; and minimum volatility seeks lower portfolio volatility.
WCG Factor Analysis — Tech Bubble (1998–2004). Momentum experienced a –44.6% drawdown but ultimately returned +33.4% over the full period, ahead of minimum volatility (+19.8%), value (+14.6%), and quality (+2.6%).
WCG Factor Analysis — Global Financial Crisis (2006–2011). Quality experienced the smallest drawdown among the four factors at –44.6% and ultimately led the full five-year period with a +20.6% return. Momentum finished approximately flat at +0.5%, while value remained negative at –14.9%.
WCG Factor Analysis — Pandemic & Post-Pandemic Inflation Surge (2019–2024). Quality led the full period with a +101.0% return, followed by momentum at +71.9%. Momentum also produced the strongest initial post-pandemic rebound at +114.6%.
WCG Long-Term Factor Analysis (December 31, 1998–August 19, 2026). Although quality outperformed momentum during the most recent period examined, momentum outperformed quality by approximately 302 cumulative percentage points over the entire long-term period—equivalent to just under 1% per year when annualized.
Microsoft — Windows 95. Microsoft launched Windows 95 on August 24, 1995, introducing features such as the Start button and taskbar that became defining elements of the personal-computer experience.
U.S. House of Representatives / Library of Congress — Burning of Washington. On August 24, 1814, British forces captured Washington, D.C., and burned major government buildings, including the U.S. Capitol. The destruction was followed by an extensive rebuilding effort.
International Astronomical Union (IAU) — Pluto Reclassification. On August 24, 2006, the IAU adopted a new definition of a planet and formally classified Pluto as a dwarf planet, leaving the Solar System with eight planets under the new definition.
Quotations. Quotations used throughout this week's commentary are attributed to Harry Markowitz, Benjamin Graham, Shelby Cullom Davis, Sun Tzu, Peter Lynch, and John F. Kennedy. The closing quotation commonly attributed to Charles Darwin should be treated as an attribution rather than a verified direct quotation.
Important Disclosure. Historical factor performance is presented for educational and informational purposes. The exhibits refer to unmanaged indexes and do not represent actual client portfolios. Indexes are not directly investable, and historical results do not guarantee future performance. Diversification does not ensure a profit or protect against loss.

Disclosures:

Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through WCG Wealth Advisors, LLC, a Registered Investment Advisor. WCG Wealth Advisors, LLC is a separate entity from LPL Financial.

Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield. (118-LPL)

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. (102-LPL)

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Indexes are unmanaged and cannot be invested in directly. (112-LPL)

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors. (122-LPL)

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. (26-LPL)

The Russell 2000 Index is generally representative of the 2,000 smallest companies by market capitalization in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Indexes are unmanaged and cannot be invested in directly. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk. The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.

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