Peter Lynch, arguably one of the most successful mutual fund managers of our time, once famously said: “If you could follow only one bit of data, you should follow the earnings.”

Earnings estimates among tech stocks are currently surging at a rate that could keep propelling growth in that sector for the rest of this year and into 2027. That is why I remain optimistic about positive returns for this year, even under the pressure of the ongoing war in Iran, the change in our Fed Chair position, and a midterm election cycle approaching. Historically speaking, if we look at each of these political events on their own, we’ve seen them cause noteworthy downward pressure on the US stock market, and in a less healthy earnings environment, my outlook would be different.

At the start of this year, I was in agreement with several market analysts who were placing a year-end target for the S&P 500 index at 7800. Today, I’m looking at two potential targets. If the Strait of Hormuz remains closed, keeping oil prices elevated, my year-end target would be around 7600. Still a healthy gain. If the Strait opens, my target shifts upward toward 8000.

Our Mainsail Equity Portfolio Model aims to outperform the S&P 500 index by concentrating assets into the best stocks in the index, according to our research, as well as high-quality growth opportunities we’ve identified outside of the index, all while avoiding the stocks that are dangerously overvalued. It’s impossible to guarantee any of this will go as planned. All we can do is make the most informed decisions based on the data we have and the historical patterns of previous markets.

Regardless of the status of the Strait of Hormuz or the war, the pressure caused by the uncertainty of a midterm election and the potential for economic sentiment shifting under a new Fed Chairman should stir up market volatility in the second half of this year. That is why we intend to trim shares to raise a small amount of cash (no more than 10%) in the Mainsail Equity Portfolio Model around the month of July, which historically brings us a seasonal market high point. Then we will aim to deploy that cash to pick up shares during what should be a seasonal low in October. From there, we would anticipate a strong rally through the end of the year, bringing us close to one of our targets in the broad market index.

90% of the portfolio model will remain in our carefully selected stocks, and I will ask investors in that model to calmly and bravely ride out the volatility that could be on the horizon in the coming months. Remember that we will be strategically aiming to capitalize on that volatility by buying the dip to further boost the performance of the model, which is currently earning its investors a 14.09% return, year-to-date, net of fees. The only thing we can ever guarantee in the stock market is volatility, so we designed our flagship portfolio model to strategically capitalize on it. By retaining the flexibility to deploy cash at opportune times, we can adjust our sails as winds change.

Please know that I’m always monitoring and working on our portfolio models, and I’m invested in them right alongside you. You are always welcome to reach out if you have additional questions or if you’d like reassurance as winds shift.

This forecast is a collaboration of my views and those of the multiple experienced market analysts I regularly consult with to ensure my clients have the benefit of multiple minds contributing to the success of our investment strategies.