February 2026 Newsletter

February 1, 2025

By: Ted Irwin, CFP®

Why Fundamental Indexing Matters

in a Magnificent 7 Market

One of the quiet risks in today’s market is how concentrated traditional market-cap weighted indexes have become. A small group of mega-cap technology stocks, the “Magnificent 7,” now drives a disproportionate share of index performance. That has worked well on the way up, but it also means many investors are unknowingly making a narrow bet on a single leadership cohort and a single style factor.

Market-cap weighting has an inherent flaw: it allocates more capital to whatever has already gone up the most. When leadership narrows, diversification shrinks just when investors assume they’re most diversified. There is no valuation discipline built into the process, crowded trades simply get bigger.

Fundamental indexing approaches the problem differently. Instead of weighting companies by market price, it weighs them by measures of economic scale such as revenues, cash flow, dividends, and book value. The result is an index that reflects business size rather than market enthusiasm.

This change has two important effects. First, it introduces a built-in rebalancing mechanism: companies whose prices outrun their fundamentals are systematically trimmed, while those whose fundamentals remain strong but prices lag are added to the portfolio.

Second, it reduces dependence on a small group of expensive leaders without requiring market timing or stock selection.

In an environment where cap-weighted benchmarks are increasingly top-heavy, fundamental indexing helps anchor portfolios to the broader economy rather than the most popular trades. It doesn’t require predicting when leadership will change, it simply prepares for the possibility.

That’s why the Reliable Portfolio models combine traditional cap-weighted exposure with fundamentally weighted strategies. The goal isn’t to avoid successful companies; it’s to avoid letting a handful of them determine the entire outcome.

In markets shaped by concentration, diversification isn’t about owning more stocks - it’s about owning them more thoughtfully.

Stock Portfolio Update: Improving Risk and Return with a Network Upgrade

In this issue, I’m making a modest but intentional portfolio adjustment designed to improve long-term performance while reducing overall risk.

I’ve decided to exit AT&T (T) and Rogers Communications (RCI) and reallocate the proceeds between T-Mobile (TMUS) and Arista Networks (ANET).

While AT&T has been a long-time holding, it has gradually become clear that it no longer contributes meaningfully to either side of the risk–return equation. The business generates cash flow, but it lacks the characteristics I look for in durable compounders: improving economics, embedded optionality, and a clear path to growing intrinsic value per share. Following the WarnerMedia spinoff, AT&T is simpler, but it is also more capital-intensive and more constrained, with limited upside to offset those risks.

I’m also exiting Rogers Communications. RCI has been a reasonable holding within Canada’s telecom oligopoly, but it shares many of the same structural constraints as U.S. telecom: heavy capital requirements, limited organic growth, and a return profile that increasingly depends on incremental price actions rather than compounding business economics. At this point, I would rather redeploy that capital into network businesses with clearer long-term runway and stronger per-share value creation.

The replacement improves the portfolio by consolidating telecom exposure and reinvesting the freed-up capital across two complementary network businesses with stronger trajectories.

T-Mobile (TMUS) maintains exposure to U.S. wireless infrastructure, but with significantly better economics. Since the Sprint integration, T-Mobile has emerged as the lowest-cost national carrier, continues to gain share, and is transitioning from a period of heavy investment to sustained free-cash-flow generation. That cash flow is now being directed toward balance-sheet improvement and share repurchases, supporting per-share value growth. I’ve used T-Mobile’s service for many years, remain neutral on the customer experience, and am comfortable owning the business as its financial profile continues to strengthen.

Arista Networks (ANET) adds a different form of network exposure - one that operates behind the scenes of modern data centers. As AI workloads expand, data increasingly moves laterally between servers, making high-speed, low latency networking a critical constraint. Arista provides the switching infrastructure that enables this traffic and serves many of the same hyperscale customers that are driving demand for advanced computing. This is not a speculative AI investment, but a high-quality infrastructure business that benefits if digital and AI-driven workloads continue to scale.

Together, these changes replace two capital-intensive telecom positions with a blend of improved wireless economics and long-term digital infrastructure optionality. This modestly increases the portfolio’s growth potential while reducing exposure to businesses with declining strategic flexibility and limited upside.

Just as importantly, I believe it’s important for subscribers to know that this portfolio is actively monitored and thoughtfully optimized over time. Changes are infrequent, but they are made when the balance between risk, return, and opportunity shifts. The goal is not to trade, but to ensure that every holding continues to earn its place as conditions evolve.

As always, this is an evolutionary adjustment (not a reaction to short-term market moves) made with the same long-term discipline that guides the portfolio.

Reliable Portfolios Deliver Strong Performance Amid Market Leadership Shift

The Reliable Portfolio ETF and Mutual Fund models delivered exceptional results this month, reinforcing the value of disciplined diversification and risk-aware portfolio construction. Across all eight risk profiles - from Conservative to Aggressive Growth - returns remained strong, with higher-growth models capturing upside while conservative allocations continued to provide stability.

A key driver of performance was diversification beyond U.S. mega-cap equities. Exposure to gold, mid- and small-cap stocks, and international markets proved particularly effective as market leadership broadened. After an extended period dominated by a narrow group of large-cap stocks, capital rotated into underrepresented areas of the market, benefiting portfolios that were positioned ahead of the shift.

Gold allocations provided ballast and diversification benefits, while mid- and small-cap holdings participated meaningfully as investors sought value and earnings growth outside the mega-cap space. International equities also contributed positively, reflecting improving relative valuations and expanding global opportunity sets.

Importantly, these gains were achieved without abandoning risk controls. Defensive strategies, volatility-managed funds, and fixed-income allocations continued to play a stabilizing role, especially within conservative and balanced portfolios.

While short-term leadership shifts can be temporary, the broader theme of market diversification may persist. Reliable Portfolios are designed precisely for these environments - seeking consistent, risk-adjusted returns by remaining diversified, flexible, and forward-looking rather than dependent on any single market segment.

Credit Card Rate Caps:

Good Intentions, Hard Tradeoffs

A proposal gaining attention would cap credit card interest rates at 10% for one year. It polls well for an obvious reason: credit card APRs are high, and many households feel trapped. But rate caps are a form of price control, and price controls tend to produce the same unintended consequence: less supply.

Credit cards aren’t priced like mortgages. Issuers set rates based largely on risk (credit score, income stability, utilization, delinquency history) and expected losses. A blanket cap limits lenders’ ability to price for that risk - especially for borrowers on the margin. The likely response is not “banks earn less and everything stays the same.” The likely response is tighter underwriting: lower credit limits, fewer approvals, reduced promotional offers, and a shift toward fee-based products.

That matters because millions of Americans rely on revolving credit for everyday cash- flow gaps - car repairs, medical bills, seasonal expenses, and short-term emergencies. If access tightens, the people the cap is meant to help could be hit the hardest: borrowers with thin credit files, lower incomes, or higher utilization. Some may be pushed to more expensive alternatives - overdrafts, late fees, Buy Now, Pay Later delinquency cycles, or non-bank lenders - each with its own risks.

None of this is a defense of high APRs. It’s an acknowledgment of how credit markets work. A better policy focus is usually competition, transparency, and consumer protections that reduce traps (hidden fees, penalty pricing surprises) while preserving access to responsible credit.

The financial planning takeaway is simple: if your budget requires a rolling credit card balance, the goal isn’t to hope for legislation, it’s to reduce the balance systematically, build a modest emergency fund, and restructure higher-rate debt when possible.

Sources: coverage of the proposal and banking-industry warnings; bill text for the Senate proposal (S.381); background on credit-card rate caps and credit access.

Portfolio Inception Date: 11/02/2015 Performance as of 1/31/2026

Investment

Symbol

Conservative Allocation

Moderately Conservative Allocation

Moderate Allocation

Balanced Allocation

Growth & Income Allocation

Moderate Growth Allocation

Growth Allocation

Aggressive Growth Allocation

SPDR S&P 500 ETF

SPY

7.50%

10.50%

13.50%

16.50%

INVESCO RAFI US 1000 ETF

PRF

7.50%

10.50%

13.50%

16.50%

19.50%

22.50%

25.50%

28.50%

MOTLEY FOOL 100 INDEX ETF

TMFC

0.00%

1.50%

3.00%

4.50%

6.00%

ISHARES CORE S&P MID CAPETF

IJH

2.50%

3.50%

4.50%

5.50%

6.50%

7.50%

8.50%

9.50%

INVSC RAFI US 1500 SML MID ETF

PRFZ

2.50%

3.50%

4.50%

5.50%

6.50%

7.50%

8.50%

9.50%

Vanguard FTSE All World ex-US ETF

VEU

2.50%

3.50%

4.50%

5.50%

6.50%

7.50%

8.50%

9.50%

Invesco RAFI Developed Markets ex US ETF

PXF

2.50%

3.50%

4.50%

5.50%

6.50%

7.50%

8.50%

9.50%

ISHARES GOLD ETF

IAU

5.00%

AMPLIFY BLOCKCHAIN TECHNOLOGY ETF

BLOK

0.00%

1.50%

3.00%

4.50%

6.00%

ARBITRAGE R

ARBFX

12.50%

10.00%

7.50%

5.00%

2.50%

0.00%

GLENMEDE QUANT US LONG/SHORT EQUITY ADV

GTAPX

13.50%

12.00%

10.50%

9.00%

7.50%

5.00%

0.00%

MAI MANAGED VOLATILITY INVESTOR

DIVPX

9.00%

8.00%

7.00%

6.00%

5.00%

0.00%

ISHARES TIPS BOND ETF

TIP

8.75%

7.50%

6.25%

5.00%

3.75%

2.50%

1.25%

0.00%

ISHARES IBONDS DEC 2026 TERM CORPORATE ETF

IBDR

5.25%

4.50%

3.75%

3.00%

2.25%

1.50%

0.75%

0.00%

ISHARES IBONDS DEC 2027 TERM CORPORATE ETF

IBDS

5.25%

4.50%

3.75%

3.00%

2.25%

1.50%

0.75%

0.00%

ISHARES IBONDS DEC 2028 TERM CORPORATE ETF

IBDT

5.25%

4.50%

3.75%

3.00%

2.25%

1.50%

0.75%

0.00%

ISHARES IBONDS DEC 2029 TERM CORPORATE ETF

IBDU

5.25%

4.50%

3.75%

3.00%

2.25%

1.50%

0.75%

0.00%

SCHWAB PRIME ADVANTAGE MONEY INVESTOR

SWVXX

5.25%

4.50%

3.75%

3.00%

2.25%

1.50%

0.75%

0.00%

Returns

Metric

Conservative Allocation Returns

Moderately Conservative Allocation Returns

Moderate Allocation Returns

Balanced Allocation Returns

Growth & Income Allocation Returns

Moderate Growth Allocation Returns

Growth Allocation Returns

Aggressive Growth Allocation Returns

Total Return

88.76%

105.62%

123.67%

142.90%

162.54%

183.58%

204.46%

225.12%

Annualized Since Inception

6.39%

7.29%

8.17%

9.04%

9.87%

10.70%

11.47%

12.19%

Ten Year Annualized Return

6.87%

7.86%

8.85%

9.82%

10.75%

11.69%

12.56%

13.38%

Five Year Annualized Return

7.10%

8.12%

9.13%

10.13%

11.04%

11.91%

12.61%

13.45%

Three Year Annualized Return

10.44%

11.60%

12.76%

13.91%

14.92%

15.91%

16.77%

17.74%

One Year Return

14.23%

15.48%

16.76%

18.00%

18.83%

19.60%

20.28%

21.17%

Three Month Return

4.08%

4.50%

4.93%

5.34%

5.38%

5.35%

5.25%

5.41%

One Month Return

1.98%

2.30%

2.62%

2.93%

3.26%

3.56%

3.81%

4.18%

YTD Return

1.98%

2.30%

2.62%

2.93%

3.26%

3.56%

3.81%

4.18%

2025 Return

14.49%

15.62%

16.78%

17.90%

18.60%

19.25%

19.82%

20.53%

2024 Return

8.78%

9.97%

11.16%

12.35%

13.54%

14.69%

15.56%

16.69%

2023 Return

9.55%

10.95%

12.35%

13.76%

15.16%

16.62%

18.12%

19.33%

2022 Return

-7.85%

-8.51%

-9.18%

-9.84%

-10.51%

-11.24%

-12.08%

-12.58%

2021 Return

10.23%

12.33%

14.43%

16.53%

18.63%

20.69%

22.31%

24.20%

2020 Return

7.65%

8.28%

8.92%

9.55%

10.19%

10.92%

11.91%

12.44%

2019 Return

12.81%

14.72%

16.62%

18.53%

20.43%

22.46%

24.50%

25.91%

2018 Return

-3.77%

-4.54%

-5.32%

-6.09%

-6.87%

-7.58%

-8.03%

-8.77%

2017 Return

8.95%

10.45%

11.96%

13.46%

14.96%

16.47%

17.81%

19.18%

2016 Return

6.15%

7.33%

8.51%

9.69%

10.88%

12.08%

13.17%

14.22%

Reliable Portfolio and ValueFirst Planning LLC are separate and independent entities. The Reliable Portfolio Newsletter is an educational publication only. It provides general investment research, commentary, and analysis and does not take into account your personal financial situation, objectives, or risk tolerance.

ValueFirst Planning LLC is a registered investment adviser offering individualized advisory services only through a written agreement after determining suitability.

Nothing in this publication should be interpreted as:Personalized investment adviceAn offer to buy or sell any securityA recommendation tailored to any specific individual

All investing involves risk, including the possible loss of principal. Portfolio allocations, model results, and performance tables are illustrative and may not be appropriate for all investors.Model results and allocation tables assume annual rebalancing unless otherwise noted. Individual results may vary.

If you would like individualized advice or a review of your personal financial situation, you may schedule a meeting with a licensed advisor at ValueFirst Planning LLC.

Schedule a Meeting with Ted:https://scheduler.zoom.us/ted-irwin

Download as PDF

Reliable Portfolio

Stock Allocation and Returns

Portfolio Inception Date: 11/02/2015Performance as of 1/31/2026

Symbol

Description

Allocation

GOOGL

ALPHABET INC CLASS CLASS A

3.94%

WMT

WALMART INC

3.78%

GEV

GE VERNOVA INC

3.76%

SCHW

CHARLES SCHWAB CORP

3.72%

META

META PLATFORMS INC CLASS A

3.71%

THE COCA-COLA CO

3.58%

AMZN

AMAZON.COM INC

3.56%

AAPL

APPLE INC

3.53%

MCD

MCDONALDS CORP

3.30%

MAIN

MAIN STR CAP CORP

3.22%

BRK/B

BERKSHIRE HATHAWAY CLASS B

3.11%

JNJ

JOHNSON & JOHNSON

3.11%

NVDA

NVIDIA CORP

3.09%

KROGER CO

3.06%

TSLA

TESLA INC

3.06%

SBHGF

SBI HOLDINGS INC ORDF

3.03%

HOME DEPOT INC

2.92%

MSFT

MICROSOFT CORP

2.79%

GE AEROSPACE

2.58%

SOUTHERN CO

2.39%

CEG

CONSTELLATION ENERGY COR

2.36%

EXC

EXELON CORP

2.19%

INTC

INTEL CORP

2.04%

MMM

3M CO

1.99%

CVX

CHEVRON CORP NEW

1.85%

XOM

EXXON MOBIL CORP

1.84%

ASML

ASML HLDG N V FSPONSORED ADR 1 ADR REPS 1 ORD SHS

1.84%

PROCTER & GAMBLE CO

1.78%

AT&T INC

0.00%

GEHC

GE HEALTHCARE TECHNOLOGI

1.33%

UNH

UNITEDHEALTH GROUP INC

1.33%

CAT

CATERPILLAR INC

1.28%

TMUS

T-MOBILE US INC

1.26%

ANET

ARISTA NETWORKS INC

1.26%

PARKER-HANNIFIN CORP

1.21%

PFE

PFIZER INC

1.20%

NSRGY

NESTLE S A FSPONSORED ADR 1 ADR REPS 1 ORD SHS

1.17%

FRFHF

FAIRFAX FINL HLDGS LTD F

1.07%

FICO

FAIR ISAAC CORP

0.95%

RCI

ROGERS COMMUNICATIONS FCLASS CLASS B

0.00%

CTVA

CORTEVA INC

0.80%

IBM

IBM CORP

0.80%

CPRX

CATALYST PHARMACEUTICALS

0.79%

INTU

INTUIT

0.65%

HOOD

ROBINHOOD MKTS INC CLASS CLASS A

0.64%

RIOT

RIOT PLATFORMS INC

0.58%

PLTR

PALANTIR TECHNOLOGIES INCLASS CLASS A

0.57%

WDAY

WORKDAY INC CLASS A

0.57%

COIN

COINBASE GLOBAL INC CLASS CLASS A

0.38%

MARA

MARA HLDGS INC

0.35%

SOLV

SOLVENTUM CORP

0.30%

DUPONT DE NEMOURS INC

0.20%

QNITY ELECTRONICS INC

0.19%

Reliable Portfolio - Returns Summary

Metric

Relaible Portfolio Stock Returns

Total Return

244.65%

Annualized Since Inception

12.83%

Ten Year Annualized Return

13.28%

Five Year Annualized Return

13.72%

Three Year Annualized Return

16.76%

One Year Return

16.17%

Three Month Return

0.62%

One Month Return

2.40%

YTD Return

2.40%

2025 Return

16.98%

2024 Return

18.10%

2023 Return

13.27%

2022 Return

-8.95%

2021 Return

30.03%

2020 Return

11.77%

2019 Return

21.93%

2018 Return

-3.12%

2017 Return

19.96%

2016 Return

13.07%

ValueFirst Planning LLC is a registered investment adviser offering individualized advisory services only through a written agreement after determining suitability.

Nothing in this publication should be interpreted as:

Personalized investment advice

An offer to buy or sell any security

A recommendation tailored to any specific individual

Stock Portfolio Methodology Disclosure (Final Version)

The Reliable Portfolio stock allocation is built on a long-term, buy-and-hold investment philosophy.While the portfolio is designed to remain largely stable over time, individual stock weights may be adjusted periodically in response to changes in company fundamentals, broader market conditions, or to manage overall portfolio risk.

Allocations are updated each month to reflect the growth or relative performance of the existing model portfolio since the most recent rebalance.These monthly updates are not trading signals but simply show how the model has evolved over time as positions appreciate or decline at different rates.

Reallocations do not follow a predetermined schedule.Adjustments occur only when warranted by material changes in valuation, business quality, sector dynamics, or risk considerations. As such, stock allocation changes may be infrequent and should not be interpreted as recommendations to buy, sell, or rebalance at a specific time.

Portfolio allocations and performance tables are illustrative, intended for educational purposes, and may not be appropriate for all investors. Actual investor results will vary depending on personal investment decisions, rebalancing frequency, cash flows, expenses, and tax considerations.

If you would like individualized advice or a review of your personal financial situation, you may schedule a meeting with a licensed advisor at ValueFirst Planning LLC.

Schedule a Meeting with Ted:https://scheduler.zoom.us/ted-irwin

Download as PDF

Important Disclosures

Reliable Portfolio and ValueFirst Planning LLC are separate and independent entities.

The Reliable Portfolio Newsletter is an educational publication only. It provides general investment research, commentary, and analysis and does not take into account your personal financial situation, objectives, or risk tolerance.

Nothing in this publication should be interpreted as:

Personalized investment advice
An offer to buy or sell any security
A recommendation tailored to any specific individual

All investing involves risk, including the possible loss of principal. Portfolio allocations, model results, and performance tables are illustrative and may not be appropriate for all investors. Past performance is not indicative of future results.

If you would like individualized advice or a review of your personal financial situation, you may schedule a meeting with a licensed advisor at ValueFirst Planning LLC.

This publication is for informational and educational purposes only and does not constitute personalized investment advice. ValueFirst Planning LLC is a registered investment adviser offering individualized advisory services only through a written agreement after determining suitability.

Past performance is not indicative of future results.

Schedule a Meeting with Ted:

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