Halfway Through the Year: Your Portfolio Deserves a Second Look

August 5, 2026

CNBC's Darla Mercado recently asked our President & CEO, Kristen Jackson, CFA, what investors should be paying attention to with the year about half over. Her short answer was that a lot has shifted since January, and the people who haven't revisited their portfolios since then are looking at a very different picture than they think.

We wanted to expand on that here, both the points Darla included and a few that didn't make the article.

The picture changed, and most people haven't looked

The S&P 500 is up almost 8% so far this year, even with inflation worries, geopolitical tension, and a lot of back-and-forth over interest rate policy. That resilience is easy to take comfort in. It's also a reason people leave their portfolios alone, which can be a mistake.

At the start of the year, investors expected rate cuts. Now Fed funds futures point to a potential chance of a hike in September. As Kristen put it to Darla, "Certainly, a lot has changed since January, and if you haven't touched things since then, we now have a much different picture today than it was then."

That's not a reason to panic. It's a reason to check in.

Fixed income, and the trap of chasing yield

This is where Kristen spent most of her conversation with Darla, and it's an area we think a lot about for clients.

Short-duration instruments are paying tempting yields right now without much interest rate risk, and it's easy to see why people park money there. But going too short can cost you in other ways, and going too long exposes you to price declines if rates rise. Here at Grant Street, we have kept client duration in the mid-range for much of this year, but that’s a moving target we address weekly as the environment shifts. This approach gives you room to benefit from income and some price appreciation without reaching so far out that you get hurt in a rising rate environment.

One point Kristen raised that's easy to overlook: yield is only part of the story. If you chase a high headline number and ignore price risk, you can end up worse off than you would've been sitting in cash. We look at total return, which is the yield plus price movement of a bond to evaluate the contribution to the portfolio.

She also talked with Darla about using equity-linked derivative strategies as a fixed income substitute in certain situations. Our philosophy on fixed income is that it should be defensive relative to the swings of the stock market. That philosophy enables us to think outside the box on other "defensive” positions like the equity-linked derivative strategies to capture more upside return with a strong downside protection built in. It's a more nuanced approach than most investors hear about, and it's a good example of why the fixed income conversation rarely has a one-size answer. The right structure depends on the client and the best risk-reward returns we can capture for their long-term goals

Rebalancing, before the gains rebalance you

If you've held the AI names this year, some of them have run up enormous gains. Names like Sandisk and Micron are up several hundred percent in 2026. That's great, until those positions quietly become a much larger share of your portfolio than you intended.

When a handful of names dominate your equity allocation, your downside risk is concentrated in a way that's easy to ignore on the way up and painful on the way down. Trimming some of those winners and redeploying into less-crowded parts of the market, midcaps, small caps, companies outside the U.S., gives you diversification that helps when the market leadership shifts.

Taxes aren't just a December problem

Tax-loss harvesting tends to get pushed to Q4, but that leaves money on the table. If you're sitting on losses from the volatility earlier this year, those can be used now to offset gains realized elsewhere.

One caution worth keeping in mind is the wash-sale rule. If you sell something at a loss and buy back something substantially identical within 30 days on either side, the IRS can disallow the deduction. And for anyone in a lower-income year, there can be a case for harvesting gains rather than losses, sometimes at a 0% rate. These are the kinds of details we work through with clients individually, because the right move depends entirely on your situation.

The thread running through all of it

None of this is about timing the market or reacting to headlines. It's about making sure your portfolio still reflects your goals and your risk appetite after six months of change. That's the work we do with clients all year, not just when something prompts a news story.

🔗To read the full CNBC article, click here