Commentary and Research Papers
2026
2026
January saw a broadening of performance for the Pinnacle Small Capitalization Value portfolio. We used the strength in AI-related stocks this month to reduce our exposure, both direct and indirect, to the space. We believe a lot of good news and expectations are being priced into these stocks, and we do not want to be overexposed to one (very popular) part of the economy.
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2026
2026
For much of the past decade, large-capitalization stocks, particularly the Magnificent Seven mega-cap technology companies, have dominated investment returns. Yet as market dynamics evolve and secular growth trends accelerate across multiple industries, small-capitalization companies may increasingly gain investor attention. For sophisticated investors seeking meaningful, long-term out performance, active management of small to mid-sized companies by a manager with a proven track record across multiple market cycles remains one of the most effective paths to superior returns.
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2026
2026
2025 was a miserable year for most active managers; it turns out many of them were not actually straying very far from the most popular stocks. Our strategy is to look for unique (as much as is possible), mispriced stocks/companies that generate attractive returns and have solid balance sheets with experienced management teams. We also want the potential to grow. We believe this approach will probably be more important over the next few years than it has been over the recent past.
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2026
2026
Economic conditions in the fourth quarter remained broadly constructive, even as growth moderated from the very strong 4.3% pace recorded in the third quarter. U.S. economic activity continued to expand, consumer spending remained resilient, and inflation pressures eased. Although job growth slowed from earlier periods, unemployment remained relatively low and weekly jobless claims were contained. The Federal Reserve cut rates for the third consecutive month in December, by 25 basis points, but signaled a more mixed outlook for future cuts.
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2026
2026
U.S. equity markets closed December on a mixed and choppy note, as strong year-to-date gains gave way to profit-taking and thin holiday trading. Investor sentiment during the month was shaped by expectations for Federal Reserve rate cuts in 2026 and ongoing sector rotation following a powerful multi-year rally in 2023, 2024 and 2025. While short-term market volatility picked up late in the month, the broader backdrop remained constructive, supported by resilient corporate earnings and economic data overall, moderating inflation, and optimism that continued easing of monetary policy could help extend the economic expansion into 2026.
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Founded in 1984, Pinnacle Associates, Ltd. is a forward thinking, multi-billion dollar investment advisory firm focused on transparency and putting clients first. We provide advice to individuals and families, institutional investors and other financial institutions.
