Market Commentary | July 20, 2026

Forecasting Future Growth

The broader stock market performed well in the first six months of 2026. More importantly, for the first time in a long time, REITs (VNQ) delivered in equal measure with the NASDAQ Composite, S&P 500, and the Dow Jones Industrial.

While the past does not predict the future, our disciplined efforts in trading and portfolio structure help us prepare for whatever geopolitical or macroeconomic factors may come.

The Cashflow Flywheel

The flywheel concept in business is a strategic approach where small, consistent actions build momentum, leading to significant long-term growth.

One focused action of our total return strategy is trading to reduce carrying costs (increase appreciation potential) and to improve yield. The yield improvement is often small and incremental, but cumulatively it creates steady growth in portfolio cashflow.

Another focused action is asset selection. Whitestone REIT still paid the same $0.57 dividend when it was taken private at $19 (3.0% yield) as it did when it was a $13 value play (4.4% yield). Reinvesting the $19 buyout proceeds into a new value play can capture significantly more cashflow.

While our total returns in the first half of the year peaked in the low teens, another measure showed our composite cashflow was up more than 20%. Because we are always busy finding the next value play, we take comfort in knowing our growing dividend stream will afford our participation regardless of the macroeconomic or deal calendar.

Notes and Disclosure

Articles are provided for informational purposes only. They are not recommendations to buy or sell any security and are strictly the opinion of the writer. The information contained in these articles is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person.

Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. The reader must determine whether any investment is suitable and accepts responsibility for their investment decisions.

Commentary may contain forward-looking statements that are by definition uncertain. Actual results may differ materially from our forecasts or estimations, and 2MCAC and its affiliates cannot be held liable for the use of and reliance upon the opinions, estimates, forecasts, and findings in this article.

Past performance does not guarantee future results. Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. Historical returns should not be used as the primary basis for investment decisions. Although the statements of fact and data in this report have been obtained from sources believed to be reliable, 2MCAC does not guarantee their accuracy and assumes no liability or responsibility for any omissions/errors.

We routinely own and trade the same securities purchased or sold for advisory clients of 2MCAC. This circumstance is communicated to clients on an ongoing basis. As fiduciaries, we prioritize our clients’ interests above those of our corporate and personal accounts to avoid conflict and adverse selection in trading these commonly held interests.

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