Here at TenBridge we have discretionary authority, meaning we manage client investment accounts for long-term success and in alignment with their financial plan on behalf of our clients. We don’t often detail the changes and the shifts we make in portfolios. Truly, we believe focusing on the person, their goals, and their lives is much better than focusing on investments and short-term changes. But we are always behind the scenes challenging our assumptions, monitoring our investments, and making changes where we think they are warranted.
Heading into this year, 2026, we were making small changes to our portfolios. You may or may not have noticed. But here was, and is, our thinking.
Dividends – they matter as a component of your overall return profile. In an S&P 500 up-market, like we have experienced over the previous 3 years (2023 – 2025), they don’t seem as impactful to your returns. But in more challenging markets, the dividends we get can account for a much larger share of your overall return.
In a white paper written by Hartford Funds in 2025, they give explanation to this concept.
“Dividends have played a significant role in the returns investors have received during the last several decades. Going back to 1960, 85% of the cumulative total return of the S&P 500 Index can be attributed to reinvested dividends and the power of compounding.”
At TenBridge we have fundamentally always believed shareholders, the “owners of the business”, deserve to and should get paid. This comes in the form of dividends and, in our view, can be one indication of a company’s financial strength and commitment to returning capital to shareholders.
As such, we have always favored dividend paying investments. But starting in late 2025 we started favoring them much more. Why? Because the S&P 500 has been on a great run of late, and it seems probable that a change is coming. In good times, dividends matter. In turbulent times, they matter vastly more.
Value – hasn’t been chic over the last few years (2023 – 2025). These are the well-run bellwether companies of America. The high-flying “Magnificent 7”, Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, have vastly outshone the value sector stocks, which in the rearview mirror makes value look unattractive.
Again, we believe and have always believed in the power of value stocks to perform well and, I think more importantly, do better in a down market than their high-flying growth stock cousins. In times like this it is tempting to ditch value and chase growth after growth is done.
We stayed true to this philosophy and maintained our value allocation rather than shifting those investments toward the Mag 7 after their strong performance in recent years. One of the value investments we have continued to hold is the Smead Value Fund. So far in 2026, that decision has benefited portfolios: as of August 31st, 2026, the Smead Fund was up 24.79%, compared with 12.97% for the S&P 500 and approximately 4% collectively for the Mag 7 stocks.
Being loyal to value investing isn’t sexy at times, compared to growth stocks that can sometimes shoot to the moon. But we still toe the line sticking with tried and true over fads. Value investing can go through extended periods of underperformance, which is why we believe maintaining a disciplined, long-term approach is important.
Asset Allocation – matters almost all the time. A friend of mine who retired from the business told me once “concentration can make you rich; diversification can keep you rich” and he is right. Asset allocation, spreading your investments over many different sectors and investment types, in comparison to some individual stocks, has not won the day over the previous few years (2023 – 2025), but it sure has helped in 2026.
We always believe in spreading risk around. You can’t predict when the good times will roll and when thunder will echo back into a downturn in the market. That is why we keep things spread out, the proverbial eggs in different baskets.
Early in 2026 our belief was to go even deeper, to spread investments out even more than we normally do. Investing broadly in the markets offers better diversification and reduces exposure to risks associated with concentration and over exposure to narrow bands of the markets. One area of note is that we weighed more heavily into small capitalization stocks late in 2025.
If markets decline, this greater diversification and broader allocation may help reduce certain concentration risks, the bubbles that may pop. It cannot eliminate investment losses or guarantee better performance during a downturn, but it may help to dampen the negative potential results in challenging times.
International – when looking across the investment universe we often judge the value of equity holdings by what is known as the PE Ratio, or price to earnings ratio. In general terms, it can indicate whether a company is overvalued or undervalued relative to their earnings.
For example, the price to earnings ratio for Apple stock, as I type, is currently 37.6. This means for every dollar Apple earns, you are paying roughly $37 to own it. Historically Apple trades between a PE ratio of 23 to 25. We would then say Apple is potentially overvalued right now.
Now take this idea and spread it across the globe. Right now, again as I type, the S&P 500 sits at a PE Ratio of approximately 29.2. Historically it normally hovers roughly between 15 – 20. Again, it appears right now, which should be no surprise to anyone, the S&P 500, an index of the best 500 (American) companies in the world, are potentially overvalued.
Then look across the pond. We use the MSCI EAFE Index as one measure of performance of equities across 21 developed markets outside of the USA and Canada. Right now, the MSCI EAFE reports a PE Ratio of about 18 with a forward-looking PE Ratio of 15.
We started 2025 with the MSCI EAFE sitting at a PE Ratio of 15.5, and we began a small shift from domestic markets over to our international investments. Two of the international funds we utilize have returned approximately 15% and 18% as of August 31, 2026.
As stewards of your wealth our job is not to gamble or take unnecessary risks. Our job is to prudently follow the data and make changes where we see they are necessary. Our job is also to help align your investment strategy with your goals and financial plan. We take all these responsibilities seriously.
We recently attended a half day “Financial Forum” where we heard from some of the best minds on Wall Street. Throughout their presentations, they discussed current economic and investment landscape conditions. They were well spoken and thoughtful, providing us with some incredible information, data, and ideas.
In the end, their recommendations to advisors as we approach the end of 2026 were exactly aligned with what we already knew and have done. Buy dividends. Favor value. Broaden diversification. Buy international.
We’re pleased to say we have been there and done that and will continue doing that.
Our crystal ball isn’t clear; it has never been. All we can do is follow discipline, watch the data, tune out the noise, and focus on your goals and ambitions, your amazing financial plan.
Those are cooler anyway.
Important Disclosures: This commentary reflects TenBridge’s views as of the date written and is subject to change. References to specific securities, funds, indexes, or investment strategies are for illustrative purposes only and are not recommendations to buy or sell any security. Investing involves risk, including possible loss of principal. Diversification and asset allocation do not ensure a profit or protect against loss. Past performance does not guarantee future results. Indexes are unmanaged and cannot be invested in directly.
Hartford Funds
The Power of Dividends: Past, Present, and Future
https://www.hartfordfunds.com/insights/market-perspectives/equity/the-power-of-dividends.html
About TenBridge Partners
TenBridge Partners is an independent financial planning and investment management firm based in Portland, Oregon with a simple focus of honoring the fiduciary responsibility of putting clients first. Guiding with curiosity and trusted expertise, we empower people to live their unique story with financial clarity and confidence.
Planning is central to everything we do. Our focus is on a complete understanding of your needs through the financial planning process, putting your success at the heart of our work.
We strive to create a community where financial planning feels fun, dynamic, and human.
From the desk of
Erik Lawrence CFP®
The information contained in this correspondence is intended for general educational purposes only and as a means for facilitating a conversation. Please consider our door always open to discuss your particular situation and how this information might benefit you and fit your specific needs.