Last Friday, we held our Coffee & Capital event in Auckland.

It was a delight to catch up with our clients and readers.

We had a satisfying hour, where we discussed the state of the global economy — as well as where we’re seeing value and opportunity.

I noticed that one theme, above all, seemed to resonate strongly in our discussion.

Yes, the media headlines continue to be negative (as they always have been).

Nevertheless, the human spirit remains resilient. Buoyant. Unstoppable.

 

Source: Brian Feroldi / X

 

You will find that entrepreneurs are always working. Always finding solutions to real-world problems. They do this by creating new businesses. By launching new products. By offering new services.

Well, no great surprise here. We human beings are problem-solvers by nature, aren’t we? That instinct for progress is hardwired into our DNA.

We are built to move. To hunt. To excel.

 

Source: Morgan Housel / X

 

I believe the stock market is a reflection of this. It’s not just the engine of commerce. It’s actually the sum total of our civilisation. I’m talking about human courage. Diligence. Ingenuity.

This means that investors who participate in this marketplace are not just buying stocks. They are really buying into businesses, becoming part-owners themselves. And in doing so, they capture a slice of the future. Indeed, that’s how prosperity snowballs and compounds.

So, as a bonus, I thought it would be a good idea to share some historical material here. To give you a sense of perspective.

Even if you didn’t have the chance to make it to our latest Coffee & Capital event, I hope you can take away some great insights from this…

 

Here are five important observations about the stock market

 

Source: Ben Carlson / A Wealth of Common Sense

 

Since 1928, the S&P 500 has experienced only 12 calendar years where the American market ended up declining more than 10%.

Such double-digit drops are rare, but they’re part of the investment process.

This journey is all about stamina and resilience.

 

Source: Ben Carlson / LinkedIn

 

 

American large-cap tech stocks — particularly the Magnificent 7 — have outperformed over the past decade and a half.

It’s easy enough to take this bull run for granted.

But should you consider diversifying beyond American large-caps?

Well, there’s compelling reason to. History can serve as our guide here.

When the dot-com bubble burst, from 2000 to 2009, we experienced a period in which other asset classes outperformed.

Emerging markets and REITs (real estate investment trusts) did exceptionally well during this time, scoring the biggest gains.

Could we see a repeat of this cycle?

 

Source: Fidelity International

 

Historically, there’s been an inverse relationship between the US dollar and non-US markets. The last 35 years demonstrates this.

When the US dollar displayed strength against other currencies, emerging markets tended to underperform.

However, when the US dollar displayed weakness, emerging markets tended to outperform.

As we look ahead at the rest of 2026, could this pattern still hold true?

 

Source: MSCI country indexes — 1 March 2026

 

At the moment, we’re specifically targeting European stocks because they meet our strict criteria: securing high-quality assets at a considerable discount.

For example, in terms of forward price-to-earnings, the Italian market is 45% cheaper than the United States.

We are betting that Europe has been unloved and unappreciated for far too long.

The Continent could be set for a turnaround as investors begin to re-calibrate their expectations.

 

Source: Charles-Henry Monchau / LinkedIn

  

Finally, here’s some bonus information.

Right now, tensions have boiled over into another conflict with Iran. This is creating scary headlines.

Historically speaking, markets tend to fall when war breaks out. However, they recover once the initial shock melts away.

This might create an opportunity for courageous investors to buy the dip.

 

Regards,

John Ling

Analyst, Wealth Morning

(This article is the author’s personal opinion and commentary only. It is general in nature and should not be construed as any financial or investment advice. Wealth Morning offers Managed Account Services for Wholesale or Eligible investors as defined in the Financial Markets Conduct Act 2013.)