Capstone – Oct 21 2026
By Bryce Pease CFP® Accredited Investment Fiduciary® Casey Morris CFP® Capstone Pacific Investment Strategies, Inc. California, Colorado, Nebraska
We’ve never been ones to predict markets, and we certainly won’t start now. But between the two of us we’ve been in this business for many years. There’s been good times, bad times, and everything in between.
Right now, we are seeing a ton of excitement and cash spent building AI and all the infrastructure around it. This isn’t the first time a new technology has come along and changed the world. We saw the steam engine and railroads spread throughout the country. From the first glimmer of light in Thomas Edison’s workshop to the modern power grid we have now. Diseases that would have killed you fifty years ago are now nothing more than a mild inconvenience. And of course, the internet and personal computer changed everything too.
All were exciting. All changed the world. All were expensive. And all, at some point, were overbuilt or overexpanded. Each brought change, excitement, capital spending, and yes, fear. That leads us to where we are today. There is more and more fear building around AI. Not just the technology itself, but the capital spent on it and the debt taken on to fund that spending. Debt that has many people wondering: Is this a bubble?
We are often asked that question about various sectors in the markets. “Is this a bubble?” Our answer: We have no idea. We honestly believe no one knows that with any real certainty. Nobody rings a bell at the top.
Here is what we do know. If it does turn out to be overbuilt, history tells us these things tend to unwind over time, not all at once. That doesn’t mean there won’t be sharp movements along the way; there usually are. We watch valuations, debt levels, and how companies are actually spending that capital. That is what active management is for. Not for predicting the future, but paying attention to it.
While we believe active management to be a real advantage, it does not mean we are shielded from a dip. Most of our clients still hold equities (stocks), and they move with the broader market. If stocks fall, we will feel some of that too. What active management gives us is the ability to make decisions during that fall and try to protect principal, not immunity from it.
1 Since 1945, the S&P 500 has fallen an average of 33% during bear markets. Source: CBS News/PBS News, citing market data through 2025. https://www.cbsnews.com/news/what-is-a-bear-market-stocks/
Casey and Bryce
626-915-7006 or
402-207-5383
www.capstonepacificinc.com
Opinions expressed in this newsletter are general in nature, are not intended as investment advice tailored to any individual, do not represent the solicitation of a security, and are subject to change without notice. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s portfolio. Any securities mentioned in this newsletter are not a recommendation to buy, sell or hold.
