Donnelly Investments

02/18/2026

“While the broader stock market has been relatively muted in recent weeks, there have been dramatic changes under the surface. Software stocks have been hit hard, with the iShares Expanded Tech-Software ETF down as much as –32% since October. To put that in context, that is the fourth-worst drawdown in that ETF’s 25-year history, outdone only by the 2022 bear market, the 2008 financial crisis, and the 2000 dot-com crash. But those were all broadly felt market events. This time, the broader market has been holding up pretty well, as capital flowing out of software stocks has rotated directly into other sectors of the stock market, such as consumer staples. As a student of market history, I think this is one of the most interesting dynamics we’ve ever seen.

“In this commentary, I want to do more than just explain this massive sell-off in software stocks. I think what’s happening in software is the market’s first serious attempt to price in widespread AI disruption, and while it’s getting the direction broadly right, it’s getting many of the details wrong. But more importantly, the capital that’s fleeing software stocks has to go somewhere, and where it’s going may be creating a problem just as dangerous as the one investors think they’re avoiding. I’ll walk through all of it, but let me start with my usual market update. . . “

While the broader stock market has been relatively muted in recent weeks, there have been dramatic changes under the surface.

01/02/2026

While calendar years are an arbitrary measure for markets, they can be a good cadence for investors to pause and reflect on where things are going.

10/01/2025

News about the government shutdown is understandably causing concern.

09/23/2025

Everywhere you turn, the headlines are unsettling.

06/15/2023

“The most recent Consumer Price Index (CPI) report was released this week, showing a year-over-year rate of 4%, down by 55% from the inflation peak eleven months ago, and the lowest inflation reading in more than two years. Importantly, the 4% figure is over a 12-month period, which still includes the massive 1% month-over-month jump from last June. When that is stripped out, as it will be with the next CPI release, the headline rate will be close to 3%, which aligns with long-term historical averages for inflation.

“Yet even with that, I expect the official CPI inflation numbers to continue declining through the year's end. As I have written about in the past, several individual CPI components, such as housing, use lagging data, which have yet to catch up and reflect the current pricing conditions in the economy. An alternative measure, Truflation, which attempts to calculate inflation using real-time data, currently pegs the U.S. inflation rate at just 2.34% as of June 15th. This is ever closer to the Fed’s 2% target. . . .”

The past year and a half has been a challenging time in the market, especially for growth-oriented investors. Indeed, it was one of the most difficult periods in modern market history. But recent signals indicate that the sun is starting to shine again after a long, harsh winter.

04/28/2023

Economic downturns can temporarily be rough on stocks, but history shows that handsome returns can pile up anyway — if you are patient and don’t let negative emotions lead to impulsive mistakes

Economic downturns are rough on stocks, but history shows that handsome returns can pile up anyway if you stick with it, our columnist says.

12/09/2022

“Apple’s Tim Cook celebrates a ‘new era of advanced manufacturing’ and says the company will use U.S.-made chips for the first time in a decade.”

The Apple CEO announced that chips powering Apple devices would be manufactured at a chip-making factory in Phoenix

12/08/2022

A visible symbol of inflation for much of the year, prices at the pump have been driven down by reduced global demand and tumbling oil prices.

11/10/2022

Consumer prices rose 7.7 percent in the year through October, slower than economists anticipated. Stocks jumped at the sign that the Federal Reserve’s campaign to tame inflation was taking effect.

10/13/2022

Social Security on Thursday announced an 8.7 percent cost of living adjustment for retirees, the largest inflation adjustment to benefits in four decades — a welcome development for millions of older Americans struggling to keep up with fast-rising living costs.

Inflation dictates the annual benefit adjustment, known as the COLA, for retired Americans. The latest boost of 8.7 percent for 2023 is the highest since 1981.

10/05/2022

To put the current technological moment in context, we are now seeing the emergence of several of what economic historians have referred to as General Purpose Technologies (GPTs). As the name suggests, GPTs are technologies that can be used for a broad range of purposes. Historical examples of GPTs include the steam engine, the internal combustion engine, electricity, computers, and the Internet. Today’s advances in artificial intelligence (AI) and machine learning (ML), biotechnology, energy storage, and robotics have similarly broad use cases, and in the case of developments in AI/ML, even broader. The Founder and Chairman of the World Economic Forum, Klaus Schwab, coined the confluence of these new GPTs all developing at the same time as The Fourth Industrial Revolution. . .

Greetings everyone. For those who subscribe to my commentaries but are not clients, I’m happy to formally announce that earlier this summer, I transitioned to private practice with my own firm, Donnelly Investments. One of my motivations for making this change was to give added focus to positionin...