Topsy-Turvy Q1 2026
April 2026
Topsy-turvy is the best way to describe the first quarter of 2026. Renewed tariff concerns, waning enthusiasm for AI-related stocks and war in Iran ultimately became headwinds. Assuming a reasonably swift resolution to Iran (or at least a going from a boil to a simmer), we think many stocks now offer compelling deals. Click below to read our Q1 2026 Stock Market Update.
Why Buy DSCPX Now?
March 2026
Despite the recent small-cap rally being driven largely by lower-quality, more speculative companies, the Davenport Small Cap Focus Fund (DSCPX) continues to distinguish itself with materially higher metrics in quality, profitability, and valuation compared to benchmarks like the Russell 2000 and S&P 600. This reinforces our commitment to owning businesses that prove to be durable throughout market cycles. Click below to read more about DSCPX.
The S&P 500 Over the Next 10 Years
February 2026
Driven in very large part by technology, the S&P 500 Index has posted incredible results over the last decade. Through year end 2025, the index generated annualized 10-year returns of 14%, with returns going into overdrive the last three years (2023-’25) at 23%. This is markedly above historical norms of roughly 10%. We think this will be very difficult to replicate over the next 10-year frame. Click below to read the full report.
VIP: What Happens When AI Goes Mainstream?
January 2026
What happens when Artificial Intelligence (AI) goes mainstream? As we scour the investment landscape for enticing opportunities in the Davenport Value & Income Portfolio, we’re at least as enthusiastic about investing in technology beneficiaries as we are investing in technology pioneers. Click below to read more about how different companies are using AI to further expand their businesses.
Well, That Was Interesting…What Now?
January 2026
This past year brought a dizzying series of events. We had DOGE, tariffs, the Middle East, the “Big Beautiful Bill”, the Fed and all things artificial intelligence (AI) give way to a dramatic swoon and even more dramatic recovery (oh and don’t forget a government shutdown that markets largely ignored). In fact, it’s truly hard to believe we fit everything into one year! Click below to watch our Q4 2025 Stock Market Update video.
Investing Themes for Today & Tomorrow
November 2025
Watch this video as George Smith and other members of the Davenport Asset Management Investment Team discuss investment themes and outlook for now and into the immediate future.
DBALX: The Virtues of Vanilla
October 2025
Who likes vanilla? If we’re talking about ice cream, vanilla is among the world’s most-loved flavors. If we’re talking about investments, so-called “plain vanilla” securities often get a “bah, humbug” reaction. Maybe they shouldn’t. Click below to read more about The Virtues of Vanilla in the Davenport Balanced Income Fund.
The Good, the Bad, and the Overheated
October 2025
Market indices continued to charge higher in the third quarter. After a stunning recovery from tariff-induced hysteria in Q2, stocks added to their gains in impressive fashion. All told, the confluence of a solid economy, fiscal stimulus, monetary stimulus and a generational technology theme provides a powerful backdrop for markets. Click below to watch our Q3 2025 Stock Market Update video.
Quarterly Updates
2026 Q1 Update
It’s hard to write a letter these days. Any attempt to prepare thoughts in advance risks quickly being obsolesced (we hope this letter is still relevant when you read it!). Topsy-turvy is the best way to describe the first quarter of 2026. The year started on a decent note with gains in January. However, renewed tariff concerns, waning enthusiasm for AI-related stocks and war in Iran ultimately became headwinds. The S&P 500® Index finished the quarter down 4.3% while the Russell 2000® Index finished up 0.9% (having been up 9.6% at one point).
2025 Q4 Update
This past year brought a dizzying series of events. We had DOGE, tariffs, the Middle East, the “Big Beautiful Bill”, the Fed and all things artificial intelligence (AI) give way to a dramatic swoon and even more dramatic recovery (oh and don’t forget a government shutdown that markets largely ignored). In fact, it’s truly hard to believe we fit everything into one year! Ultimately, all the action culminated in another year of surprisingly strong returns for the broader equity indices. The S&P 500® Index and Russell 2000® Index finished 2025 up 17.9% and 12.8%, respectively, while the NASDAQ® Composite finished up 21.1%
2025 Q3 Update
Market indices continued to charge higher in the third quarter. After a stunning recovery from tariff-induced hysteria in Q2, stocks added to their gains in impressive fashion. The S&P 500® Index and Russell 2000® Index advanced 8.1% and 12.4%. Year-to-date, the indices finished the quarter up 14.8% and 10.4%, respectively. Recall, the S&P and Russell were down roughly 15% and 21% year-to-date earlier this year (4/8/25) when economic fears peaked. Since then, the S&P has risen for five straight months.
2025 Q2 Update
What a difference a couple months makes! Markets managed a remarkable comeback in the second quarter. While the S&P 500® Index’s 10.9% return for the quarter is very impressive, even more notable is its stunning 24% rally since the closing low on April 8th. The S&P is now up 6.2% year-to-date, which is probably hard for some to believe given widespread investor angst just a few months ago. Remember, it wasn’t long ago we penned an update in response to “Liberation Day” (April 2nd) and the threat of massive tariffs being imposed on trading partners. The market had declined 12% in just four days and was down roughly 18% from its highs at one point. What’s more, the CNN Fear & Greed Index stood at 5 out of 100, suggesting “extreme fear” among market participants. Now, the S&P is sitting at new all-time highs.
2025 Q1 Update
The first quarter was very eventful and brought a change of tone to markets. We started the year on a decent foot, but stocks weakened in mid-February amid political and economic uncertainty. While the S&P 500® Index finished the quarter down only 4.3% year-to-date (worst start to a year since 2020), other indices were worse as evidenced by declines of 9.5% and 10.4%, respectively, for the Russell 2000® Index and NASDAQ Composite® Index. Furthermore, the S&P retreated 8.5% from its highs and temporarily entered “correction” territory (down 10% or more) in early March. According to CNBC, 203 stocks in the S&P 500 were down more than 20% from their highs as of March 10th.
2024 Q4 Update
Let’s start by acknowledging that 2024 was a remarkable year for equity markets. The S&P 500® Index rallied 25.0% and posted its second consecutive year of 20%+ gains. We witnessed one major stumble in the summer and markets closed the year with a bit of a whimper, but the overall outcome was quite impressive. This likely came as a surprise to many investors given geopolitical risks, recession fears, and election anxieties. Over the last two years, the S&P has returned a stunning 58%. Other indices were up in 2024, but not nearly as strong as the tech-fueled S&P. For instance, the small cap-oriented Russell 2000® Index was up 11.5% and the Russell 1000 Value® Index gained 14.4%.
2024 Q3 Update
The third quarter brought more gains to equity investors. The S&P 500® Index returned 5.9% and the Russell 2000® Index advanced 9.3%. Notably, gains broadened to corners of the market other than large cap technology stocks. Year-to-date returns are somewhat staggering in light of persistent calls for economic weakness and market malaise. Incredibly, both the S&P and Dow Jones Industrial Average have been positive for 10 of the last 11 months. The S&P 500 is now up a whopping 22.1% for 2024. Other notable indices are also up nicely, albeit a bit more subdued than the tech-heavy S&P.
2024 Q2 Update
We are halfway through 2024. So far, results for equity markets have been mixed and the lead stories have been the Federal Reserve, artificial intelligence (AI) and “narrow” returns. Many large cap technology leaders have produced stellar returns while other areas of the market have languished a bit. The S&P 500® Index is up an impressive 15.3% while the Dow Jones Industrial Average® Index is well behind with a 4.8% gain and the small cap-oriented Russell 2000® Index is up only 1.7%. What’s more, “growth stocks” have outperformed “value” stocks by an extraordinary margin of 14.1 percentage points. The Russell 1000 Growth® Index is up 20.7% while the Russell 1000 Value® Index is up 6.6%.
2024 Q1 Update
Equity markets continued to be kind to investors as we started 2024. Resilient economic growth and reassuring corporate earnings allowed stocks to build upon last year’s gains. Growth-oriented stocks continued to outperform, although market gains were fairly broad. For the first quarter, the S&P 500® Index gained 10.6% to record highs and the Russell 2000® Index advanced 5.2%. Three primary forces seem to be driving markets: the economy, Fed policy and artificial intelligence (AI).
2023 Q4 Update
Equity markets generated surprisingly robust returns in 2023. The S&P 500® Index gained 26.3% for the year and the Russell 2000® Index returned 16.9%. Much of the gains were fueled by a feverish late-year rally. For the fourth quarter alone, the S&P and Russell returned 11.7% and 14.0%, respectively. As you may recall, we came into 2023 with rampant negativity and widespread calls for a recession. While there were hurdles to surmount along the way, markets largely defied the odds and generated very impressive results.
2023 Q3 Update
Stocks seemed to run out of gas in the third quarter. The S&P 500® Index and Russell 2000® Index lost 3.3% and 5.1%, respectively. Most of the losses were concentrated in September, which historically is the worst month of the year for stocks. It wasn’t surprising to see equity markets stall a bit, especially after a surprising first half rally. Even large cap technology stalwarts cooled off as the artificial intelligence (AI) craze seemed to fade. Year-to-date, the S&P and Russell finished the period up 13.1% and 2.5%, respectively.
2023 Q2 Update
The year is halfway over and equity returns have probably surprised many investors. We came into 2023 with predictions for a recession and rampant negativity; yet, the major indices have managed to post impressive gains so far. For the second quarter, the S&P 500® Index and Russell 2000® Index advanced 8.7% and 5.2%, respectively, bringing year-to-date gains to 16.9% and 8.1%. Even more impressive, the tech-heavy NASDAQ 100® Index is up 39.4% year-to-date, the best start to a year for the index since 1985.