The PRO File - Issue No. 2 - Same Market, Different Answers

The PRO File

On markets, portfolios, and the discipline behind them.

ISSUE NO. 2   ·  MONDAY, NOVEMBER 2, 2026   ·   MONTH ENDED OCTOBER 30

Same Market, Different Answers

The S&P 500 barely moved in October. Beneath the headline, almost nothing else stood still.

October 2026 price returns, excluding dividends. *Measured by a fund that tracks the index. Past performance is not indicative of future results.

October’s headline number was small. What happened under it was not.

Artificial intelligence spending drove the split. Five of the largest technology companies are on track to spend more than $800 billion on capital projects this year, and investors pressed a harder question: how much cash goes out before the returns come in? Technology fell about 8%. Energy rose nearly 14%, and consumer staples nearly 11%.

Rates told a second story. The 10-year Treasury yield reached 5.31% on October 5, then finished the month at 4.94% as investors moved toward government bonds. The Federal Reserve held its policy rate steady in a 10–2 vote, with both dissenters preferring an increase.

Inflation is why that debate is alive. The Fed’s preferred measure ran 3.6% over twelve months in September, lifted by energy, and Brent crude ended October near $113 a barrel. Growth stayed firm, with third-quarter GDP advancing at a 3.4% annual rate.

Three parts of your portfolio sat in the middle of that month.

• Technology. AI-linked companies are the largest equity block in most PRO Elite portfolios, and PRO ETF carries related exposure through its growth and technology holdings. When that group sells off, these portfolios feel it.

• Staples and energy. PRO Elite portfolios also own consumer staples and energy companies, largely through our dividend strategy’s rules. In the Conservative and Equity Income designs, staples are the larger block. We own no utilities or real estate in PRO Elite, so not every defensive corner is represented.

• Bonds. Where a portfolio holds bonds, a meaningful share is built to feel a move in longer-term rates. Rising yields worked against that exposure in September, and falling yields worked for it in October. Sensitivity runs both ways, which is part of why we also hold floating-rate bonds.

Why ten companies get ten equal shares.

Most stock indexes weight companies by size, so the largest names drive the result. Our rules-based PRO Elite sleeves work differently. Each holds ten companies at equal weight, so the tenth-ranked company counts as much as the first. A position is not large simply because its price has climbed.

Equal weight has real costs. When the largest companies lead, it can trail. Ten positions are also far more concentrated than a 500-stock index.

A fund tracking the equal-weighted S&P 500 trailed its market-cap-weighted counterpart by about 4.6 percentage points in September, then beat it by nearly 6 in October. Those are index proxies, not our results. Together they show the trade-off we accept: position size comes from the process, not from recent price moves.

PRO — Proactive Risk Optimization. Rules first, opinions second.

When the headline hides the market.

The S&P 500 closed May 29 at 7,580 and October 30 at 7,580. Five months, essentially no change. In between, it fell to about 7,267 in June and set a record near 7,819 in October.

An index is a summary, and a summary can leave out what matters to you. When a headline says “the market” did something, three questions help:

• Which market? October gave a different answer depending on how the index was built.

• Over what period? One month can look very different from the five around it.

• Compared with what? The useful yardstick is your objective and the risk you agreed to accept.

FUN FACT

“Sell in May and go away” is usually traced to London’s financial district, where the full version told investors to come back on St. Leger’s Day, after a September horse race first run in 1776. This year, anyone who left at the end of May and returned at the end of October would have found the S&P 500 within pennies of where they left it, and would have given up the dividends. A good story, but not how we build portfolios.

— Rich Tegge

Index, sector-fund and equal-weight-fund data, Brent crude: Financial Modeling Prep, closes of September 30 and October 30, 2026. Treasury yields: U.S. Department of the Treasury daily par yield curve, via Financial Modeling Prep. Inflation: Bureau of Economic Analysis, Personal Income and Outlays, September 2026, released October 29, 2026. GDP: Bureau of Economic Analysis, advance estimate, released October 29, 2026. Federal Reserve: FOMC statement, October 28, 2026. Rate-hike pricing: CME FedWatch, as reported by Opening Bell Daily, November 2, 2026. Capital spending: Business Insider tally of company guidance, range of $803 billion to $828 billion for calendar 2026, covering all capital spending, not only AI. Release dates: agency calendars.

DISCLOSURES

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. Wealth Strategy Group and LPL Financial are separate entities.

This material is for informational purposes only and is not a recommendation, an offer or solicitation to buy or sell any security, or personalized investment advice. References to portfolio construction describe the strategies generally, reflect the August 2026 reconstitution, are subject to change, and do not reflect any individual account. Equal-weight and index figures are shown for market context only and do not represent the performance of any WSG strategy or client account. The strategies described may not be suitable for all investors. All investing involves risk including the possible loss of principal, and no strategy assures success or protects against loss. Asset allocation and diversification do not guarantee a profit or protect against loss in declining markets. Portfolios concentrated in a limited number of holdings or sectors may be more volatile than the broad market. Equal-weighted approaches may lag market-cap-weighted approaches and may involve higher turnover. Bond values will decline as interest rates rise, and high-yield and floating-rate bonds carry credit risk. Energy and commodity-related investments can be volatile. Past performance is not indicative of future results. There is no guarantee that any stated objective will be achieved. Economic forecasts set forth may not develop as predicted. Market and economic data referenced is as of October 30, 2026, unless noted. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average are unmanaged indexes and cannot be invested in directly. Please consult your financial professional before investing.

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