The BTWM Q1 Webinar, held February 12, started with a recap of 2025 — a year that delivered strong returns, record earnings, and continued momentum in equity markets.
The strong returns of 2025 were once again led by the “Magnificent Seven” — mega-cap companies riding the wave of artificial intelligence enthusiasm, efficiency gains, and scalable innovation. These seven stocks accounted for nearly half of the S&P 500's gains, while the other 493 companies accounted for the remaining half.
Ryan O’Connell explained that current valuations might be “priced to perfection.” With prices and valuations at record highs, many investors are asking:
“Should I still be putting money into stocks when they’re at all-time highs?”
The answer, according to Ryan, depends largely on earnings growth moving forward.
With valuations already elevated, investors are unlikely to pay significantly higher multiples for earnings. That means future returns for investors must come from one of two places:
- Continued earnings growth
- Income generation through dividends and strategies like covered call premiums
The encouraging news? Earnings forecasts remain strong. Projections for 2026 are expected to reach record levels, and 2027 forecasts are currently anticipated to surpass even those numbers.
Focus on What You Can Control
One of the central themes of the webinar was discipline. Ryan encouraged attendees to focus on the intersection of two categories:
- What you can control
- What truly matters
This philosophy, often referred to at Blooming Tree as the “Golden Goose Strategy,” emphasizes thoughtful asset allocation, risk management, and long-term discipline over reacting to headlines or short-term volatility.
Special Guest: Ben Cohen of CNL
This quarter’s webinar featured special guest Ben Cohen, who shared insights into private equity investing and how CNL approaches alternative investments.
CNL, which has been focused exclusively on alternative investments for more than 50 years, specializes in areas outside traditional public markets — including real estate, private credit, and private equity. Ben, who has been with CNL for over a decade, provided a closer look at how private equity can complement traditional portfolios.
What Is Private Equity?
At its core, private equity involves investing in privately held businesses rather than publicly traded companies. Unlike publicly traded stocks that fluctuate daily with market sentiment, private companies are typically valued based on balance sheets, cash flow, and operational fundamentals. This often results in lower day-to-day volatility.
Importantly, Ben noted that movements in the S&P 500 don’t necessarily translate to similar movements in private equity investments — offering a potential diversification benefit.
Ownership Mindset Matters
One defining characteristic of CNL’s approach is management ownership. On average, company leadership teams maintain approximately 18% ownership stakes in their businesses.
As Ben put it, “You don’t wash a rental car.” When management has meaningful ownership, incentives align differently. If the team running the company isn’t willing to own part of it themselves, CNL typically won’t invest.
Aiming for Steady, Consistent Returns
Rather than attempting to outperform the S&P 500 during strong bull markets, CNL targets steady returns of approximately 10% annually, which can outperform traditional investments in challenging markets.
The discussion also addressed a common question: How much alternative exposure should investors have? The answer depends on your goals, risk tolerance, liquidity needs, and overall portfolio design.
However, JPMorgan's Alternative Investment Outlook, published in Q1 2026, offers a quick glimpse of how alternatives can reduce volatility while increasing returns.
Preparing for What’s Ahead
Are you prepared for what’s ahead?
While markets remain near all-time highs and risks exist, opportunity remains, but there are no guarantees that returns will match those of the past several years.
While focusing on what you can control, prioritize thoughtful diversification, consider ideal income strategies, and plan for the long-term as you navigate 2026 and beyond.