The Market Beneath the Market—and the Power of Sleep & Light

Sometimes what matters most is hiding in plain sight.

In this week’s Wealth Advisory, we look beyond the familiar S&P 500 and Nasdaq headlines to what’s happening underneath them. After years dominated by mega-cap growth and technology, value stocks, small caps, and international markets have been quietly asserting themselves—an important reminder that market leadership changes, valuations matter, and diversification still earns its keep.

Next, our Wellness Navigator Christine Despres turns our attention to two of the most powerful—and wonderfully free—tools for restoring body and brain: sleep and light. She explores how the rhythms of darkness, daylight, and restorative sleep work together to help our bodies reset, repair, and rejuvenate. It may leave you thinking differently about both your bedtime and your first few minutes of morning.

Two very different subjects, but perhaps a common lesson: we tend to focus on what’s loudest and most obvious, when some of the things that matter most are happening beneath the surface.

As always, we hope you’ll enjoy, share, and subscribe to Advice for the Good Life. And, more importantly, that you’ll find something here that helps you live a little happier, healthier, wealthier, and wiser.

Enjoy!

Wealth Advisory:  Exploring the Stock Market…Size, Style, Regional Differences

Many investors rely on major indices such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average to gauge how financial markets are performing. While these benchmarks offer a useful starting point, the stock market encompasses thousands of companies, each responding to economic and market forces in its own distinct way. To better understand these dynamics, stocks are frequently grouped by sector, geography, company size, and investment style. Each of these categories can serve an important function within long-term portfolios.

Headlines about the S&P 500 setting new records or the Nasdaq being propelled by artificial intelligence can give the impression that all stocks move in lockstep. In reality, a great deal is happening beneath the surface. This is particularly meaningful today, as key drivers such as AI, oil prices, interest rates, and tariffs influence all corners of the market, not just large cap stocks. Developing an awareness of these drivers can help investors maintain balance and keep their portfolios aligned with long-term objectives.

Over the past year, segments including small caps, value stocks, and international equities have outperformed, and their valuations have generally remained more attractive. Understanding how different sizes and styles have performed can help investors preserve that balance. What is taking place beneath the surface of broad market indices, and what does it mean for investors?

Different sizes and styles respond to market conditions in distinct ways

Although the overall market has posted double-digit returns this year, at least two notable trends have been unfolding beneath the surface.¹ The first is that value stocks have outperformed over the past year, representing a reversal of the pattern seen since 2022, when growth stocks delivered strong returns on the back of technology and AI investment.²

The distinction between value and growth is meaningful for investors, and has been the subject of considerable academic research over the past 50 years.³ Value typically refers to companies with compelling valuation ratios, where share prices are low relative to fundamentals such as earnings or sales. Growth, by contrast, describes stocks with higher valuations that reflect anticipated gains in earnings and market share, often associated with trends that investors find compelling. The specific companies that fall into each category can shift over time, as seen with dot-com stocks in the late 1990s and AI stocks today.

Value stocks have outperformed this year for a number of reasons, including uncertainty surrounding interest rates and strength in the Energy sector driven by elevated oil prices.⁴ Interest rates remain near multi-decade highs, a condition that tends to weigh more heavily on growth stocks. This is because growth stock prices are anchored to future earnings potential, and higher rates reduce the present value of those future cash flows.

The second notable trend is that small cap stocks have outperformed large caps this year, reversing a pattern that had persisted for well over a decade. In fact, prior to this year, small cap stocks had trailed the S&P 500 since 2020.⁵

Small caps have performed well this year for many of the same reasons driving the broader market. AI, for example, is frequently seen as a large cap opportunity, yet many smaller industrial and technology companies supply the equipment, components, and services required to build data centers and other infrastructure. As a result, these businesses are seeing healthy revenue and earnings growth that compares favorably with many other parts of the market.

One challenge is that small caps tend to be more sensitive to interest rates, as they have less access to financing than their large cap counterparts. This has introduced uncertainty across the group more recently, with long-term rates remaining elevated and the possibility of Fed rate hikes increasing. However, history suggests this relationship is not always straightforward. Two of the strongest periods for small cap relative performance occurred in the late 1970s and the mid 2000s, both of which featured higher interest rates and inflation.⁶ Part of the explanation is that smaller businesses can sometimes pass along price increases more readily, which helps to support their operating margins.

Valuations play an important role in long-term investing

The significance of different stock market styles extends beyond past returns to encompass valuations. Over the long run, lower valuations have historically been associated with stronger forward returns, making it worthwhile to consider all parts of the market.

The stock market is often described as moving through “regimes,” or extended periods when certain investment styles lead. These regimes can span months, years, or even decades. Among the most well-documented is the dominance of value stocks through much of the 20th century, which gave way to growth during the dot-com era.

The accompanying chart illustrates the gap between growth and value valuations using the price-to-book ratio. Growth stocks, particularly the largest technology companies, are trading near historically elevated levels.⁷ By comparison, value stocks and smaller companies appear more attractively priced. As always, past performance does not guarantee future results, so these valuation differences do not ensure that value or small caps will continue to lead. However, they do help explain the recent shift in market leadership and underscore why investors should consider a broad range of market segments in their portfolios.

The key takeaway is not to attempt to time these transitions, but to recognize that no single trend lasts indefinitely. Maintaining an appropriate balance across styles and sizes, rather than pursuing whatever has recently outperformed, has historically served investors well.

International markets offer an additional source of diversification

The same logic that applies within the U.S. market extends across geographies as well. Just as different sizes and styles respond differently to economic conditions, so too do markets around the world. This is why international diversification can be a valuable tool for long-term investors.

Emerging market stocks, for instance, have performed well this year as earnings growth expectations have improved and valuations have grown more attractive.⁸ The accompanying chart shows that valuations for emerging market and developed market stocks remain well below those of the U.S. across a range of measures. While U.S. stocks outpaced international peers for much of the past decade, returns since the start of last year demonstrate that this dynamic can shift in unexpected ways.

Of course, international investing introduces its own set of considerations, including geopolitical, currency, and regulatory risks. These factors are precisely what causes international stocks to behave differently from U.S. stocks over time. That said, many U.S. multinational companies already generate substantial revenues abroad, which provides a degree of natural geographic diversification. When combined thoughtfully with domestic holdings, international exposure can improve the overall balance of a portfolio.

Ultimately, which parts of the market belong in a given portfolio depends on each investor’s individual needs, goals, and risk tolerance. The objective is not to forecast whether small caps will continue to lead or whether value stocks will keep outperforming. Rather, it is to appreciate that the stock market is far broader than the small number of companies that dominate financial headlines.

The bottom line? While major indices are a helpful starting point, not all segments of the market behave the same way. Maintaining balance across sizes, styles, and geographies is an important step toward building a portfolio that supports long-term financial goals.

References

1. S&P 500 Index as of September 11, 2026
2. Clearnomics research and the Russell 3000 Value and Growth indexes, as of September 11, 2026
3. Fama and French, 1992, “The Cross-Section of Expected Stock Returns,” https://www.jstor.org/stable/2329112
4. Clearnomics research, LSEG and FTSE Russell, as of September 11, 2026
5. Clearnomics research and the Russell 2000 Index, as of September 11, 2026
6. Banz, 1981, “The Relationship Between Return and Market Value of Common Stock,” https://www.sciencedirect.com/science/article/abs/pii/0304405X81900180
7. Clearnomics research, LSEG and FTSE Russell, as of September 11, 2026
8. Clearnomics research and the MSCI Emerging Markets Index, as of September 11, 2026

Wellness Navigator and Brain and Metabolic Health Coach, Christine Despres, RN, NBC-HWC, CDP

 Sleep Is Where Your Brain Cleans House

September is World Alzheimer’s Month, and if I could get every woman I know to change one thing in September, it would be sleep. If it were only that easy- right?

Here is why. During deep sleep, your brain runs a rinse cycle. Fluid flushes through the tissue and clears out the waste that builds up during the day, including the proteins linked to Alzheimer’s. That system works best when you sleep long enough and soundly enough, and there is no shortcut for it.

Why It Matters More Now

Midlife is when sleep starts to slip. Hormones shift, night sweats show up, the mind races at 3 a.m. And it is also when the changes that lead to Alzheimer’s are quietly beginning, twenty years before any symptom. Those two things landing at the same time is exactly why sleep deserves more attention now than it did at 30. Poor sleep also drives up blood sugar and cravings the next day, so it drags your metabolic health down with it.

This Week

Pick one of these, not all six. Do it every day for 7 days, then add another.

• Get outside in the early morning light. Ten minutes within an hour of waking resets your circadian rhythm and sets up tonight’s sleep.
• Aim for 7 to 9 hours. Count backward from when you need to be up.
• Keep a consistent bedtime, within about half an hour. Your brain likes a schedule.
• Finish eating 2 to 3 hours before bed so your body is not digesting when it should be repairing.
• Take a walk after dinner. Ten or fifteen minutes helps your body process dinner and signals the wind down.
• Dim the lights and kill the screens for the last 30 minutes. Light after dark keeps your brain on daytime.

Tell me which one you chose. Reply to this email, I read each one.

If sleep has been a struggle for a while and you want help figuring out why, book a free 30 minute brain strategy call with me here. Brain Strategy Call

Sleep well,

Christine

The Wellness Navigator | Brain & Metabolic Health Coach | RN, NBC-HWC, CDP

Here’s the link to my weekly newsletter: Newsletter — Christine Despres