There is a saying that smooth seas do not make skillful sailors. When it comes to investing, at no time has this been more true than during the first half of the year. Investors faced major events including the war in Iran, oil prices pushing inflation higher, and questions around artificial intelligence (AI). And yet, markets have climbed to new all-time highs, corporate earnings have grown at a double-digit pace, and many asset classes have performed well. The first six months have been a reminder of the importance of staying invested and maintaining a longer time horizon.

That resilience shows up clearly across the numbers. A variety of global asset classes have contributed to portfolio returns so far this year, continuing last year’s trend. This includes not only large cap stocks, but also small caps, emerging markets, and commodities, with the second quarter standing out as one of the strongest on record.

Several themes are driving these returns: the underlying strength of the economy, hopes for a peace deal in Iran, and enthusiasm around AI. Together, these factors have fueled corporate earnings growth. This strong environment has also sparked a wave of high-profile IPOs, including SpaceX in the second quarter, with listings from OpenAI and Anthropic — both AI companies — anticipated to follow.

None of this happened without turbulence along the way. Investors have grown accustomed to brief bouts of volatility triggered by macroeconomic events. Between tariffs, the Middle East conflict, and uncertainty around the Fed, the past year alone has delivered several short-lived market swings. This pattern also underscores a key point: periods of volatility are often when market opportunity is greatest.

That volatility has been closely tied to the broader economic picture. How is the economy doing today? Inflation remains elevated, though it could improve if oil prices stay low. The job market has begun to heat up again, reversing last year’s concerns over the slow pace of hiring. The dollar has stabilized and rebounded more recently, trade remains uncertain but has settled down, and business investment has accelerated. Consumers are feeling pessimistic, yet they continue to spend on both necessities and discretionary items. Taken together, the economy appears healthy despite some mixed signals — a backdrop that has historically been positive for financial markets over the long run.

Looking ahead, there will no doubt be unexpected events in the second half of the year, including developments in the ongoing Middle East conflict, the upcoming midterm election, and new market activity such as initial public offerings. History suggests the investors best positioned to benefit from these events are not those who try to predict them, but those who remain disciplined through them. The first half of 2026 has rewarded investors who stayed diversified and maintained a long-term perspective — and that discipline will likely matter just as much in the second half.