BFS Advisory Group | Our Quarterly Market Report

The Price of Growth: Competing Market Forces Whether You Are a Business Owner, an Executive, or Successfully Retired
If you run a business or sit in the executive suite, you've felt this economy from both sides. Demand may be strong and your team may be growing. Then the rate on your line of credit resets, a supplier passes along another fuel surcharge, and long-term interest rates climb to levels we haven't seen in nearly two decades.

That tension is the theme of our third-quarter Risks & Opportunities report: The Price of Growth. The economy is strong enough that its strength now carries a price, paid in stubborn inflation and rising interest rates. This fall, the Federal Reserve raised rates for the first time in three years, and central banks around the world are moving in the same direction.

For business owners and executives, the price of growth isn't just a market headline. It changes the math on decisions that may already be on your calendar. Here are three we're talking through with the families we serve.

1. For Business Owners: Exit Timeline and the Cost of Capital
Most business owners think about selling in terms of their own readiness: the business, the team, and the life they want next. Those come first. But the environment shapes the outcome too. Most buyers finance acquisitions, and when borrowing costs rise, the price a buyer can justify often moves with them. In our view, the economy is in the middle-to-late stage of its cycle: still growing, but with less room for error.

That doesn't mean rushing a sale. It means the planning should start well before the transaction. How will the proceeds be taxed? How does the sale fit your estate plan? Does a charitable strategy belong in the structure? What does your portfolio need to do once the business is no longer your primary asset? Those questions are far easier to answer with years of runway than with a letter of intent on the table.

2. Concentrated Stock in a Concentrated Market
Many executives hold a large share of their net worth in company stock and options. That concentration is a risk in any market. In this one, the market itself is concentrated too. A handful of AI giants account for an outsized share of earnings growth, and the largest AI builders are increasingly funding their expansion with borrowed money and deals with one another.

So when headline earnings look extraordinary, it's worth looking underneath. This year, some of that growth has come from investment gains rather than day-to-day business.

For executives, the real question is how company stock fits the whole plan. When should you exercise options? How can you diversify in a tax-efficient way? Should you harvest losses elsewhere to offset gains? Does giving appreciated shares instead of cash make sense for the causes you support? Each of these is a portfolio decision, but none can be made well without the financial plan behind it.

3. Where Your Cash and Bonds Should Live
Rising rates have been painful for bond investors, and many have watched their statement values fall this year. But the same rates that pushed those values down have raised the income available on every new dollar invested. 

This matters most for business owners and executives in high tax brackets. After a sharp selloff, municipal bonds look inexpensive relative to Treasuries, and for top-bracket investors, their tax-free income is worth considerably more than it was at the start of the year. Whether they belong in your portfolio depends on your tax bracket, your need for liquidity, and your time horizon. Those are planning questions first and investment questions second.

A Note for the CPAs and Attorneys We Work Alongside
Every decision above sits where tax, legal, and investment strategy meet. Loss harvesting, gifting appreciated shares, the tax treatment of sale proceeds, and the tax-equivalent yield of a municipal position for a specific client are the conversations where coordination between advisors makes the biggest difference. When a client's financial plan drives the design of their portfolio, the portfolio should carry out the strategy you've built with them, not work against it.

The Full Picture
Our full Q3 report walks through the global landscape, the US economy, and the bond and stock markets, with the risks and opportunities we see in each. It also explains why the midterm elections didn't make our list of risks. We encourage you to read Risks and Opportunities, and we welcome any feedback or questions you have.

Read the Full 2026 Q3 Market Report Here