Welcome back to the Smart Wealth Newsletter, where our family—Chris, Trip, and Frankie—shares our real-world journey through the stock market and real estate investing.

Trip is currently attending the Freeman Business School at Tulane University, where he continues to build his knowledge of finance, investing, and business strategy. Frankie is a senior at All Saints Academy, and we are incredibly proud to share that he was recently named a National Merit Scholarship Finalist—a major academic accomplishment that reflects his discipline and dedication.

Together, we manage and track our portfolios, share ideas, and learn from both our successes and mistakes. Our goal is simple: build long-term wealth while teaching the principles of disciplined investing.

The week ending February 13, 2026, delivered another reminder that markets rarely move in a straight line. After a strong start to the year, investors were forced to navigate a mix of inflation data, Federal Reserve commentary, earnings reports, and shifting expectations around interest rates. The result was a volatile week where major indices moved in different directions, and leadership rotated across sectors.

By the closing bell on Friday, the Dow Jones Industrial Average finished at 49,500.93, the S&P 500 closed at 6,836.17, and the Nasdaq Composite ended at 22,546.67. While these numbers reflect historically elevated levels for the major indices, the week itself was far from calm. Intraday swings and sector rotations highlighted the market’s sensitivity to economic data and policy expectations.

The biggest driver of market sentiment was the latest round of inflation data. Investors entered the week hoping for continued evidence that inflation was cooling, which would give the Federal Reserve more confidence to begin cutting interest rates later this year. However, some readings came in slightly hotter than expected, reinforcing the Fed’s cautious stance.

This shift in expectations caused Treasury yields to rise early in the week, which in turn pressured high-growth and interest-rate-sensitive stocks. Technology names, which had been leading the rally for months, experienced bouts of profit-taking as investors reassessed valuations in a potentially higher-for-longer rate environment.

Despite the volatility, the broader market showed resilience. The Dow Jones Industrial Average managed to close the week near record territory, supported by strength in industrial, healthcare, and consumer-staples stocks. These sectors tend to perform better when investors grow more cautious, and the rotation into these areas reflected a more defensive tone during parts of the week.

The S&P 500 remained the most stable of the three major indices. Its diversified composition helped offset weakness in certain technology names with strength in financials, energy, and industrials. While the index did not post dramatic gains, its ability to hold near all-time highs demonstrates the underlying strength of corporate earnings and the U.S. economy.

The Nasdaq Composite, heavily weighted toward technology and growth stocks, experienced the most volatility. After leading the market higher for much of the past year, some of the largest tech companies faced selling pressure as investors locked in profits. Even so, the index remains up significantly over the past year, underscoring the continued dominance of the technology sector.

One of the defining themes of the week was the ongoing influence of artificial intelligence on market leadership. AI-related companies—particularly those involved in semiconductors, cloud infrastructure, and data-center power—continue to attract strong investor interest. The belief that AI spending will drive a multi-year capital-expenditure cycle remains one of the most powerful narratives in the market.

Investors see AI not as a short-term trend, but as a transformational shift similar to the rise of the internet or the smartphone. This has created a situation where a relatively small group of technology companies has an outsized influence on overall market performance. While this concentration has raised concerns among some analysts, others argue that these companies deserve premium valuations because of their strong earnings growth and dominant market positions.

Outside of technology, the energy sector provided modest support to the broader market. Oil prices remained relatively stable during the week, trading within a narrow range. While geopolitical tensions continue to influence energy markets, concerns about global demand have prevented a sustained breakout in crude prices.

Financial stocks were mixed. Banks continue to benefit from higher interest rates, which can boost lending margins. However, investors remain cautious about credit quality, especially in areas like commercial real estate and consumer credit. Delinquency trends and loan growth will remain key factors to watch in the coming quarters.

Small-cap stocks once again lagged their large-cap counterparts. The Russell 2000 struggled during the week, reflecting the challenges smaller companies face in a higher-rate environment. Many small-cap firms rely more heavily on debt financing, making them more sensitive to borrowing costs.

Another major focus for investors was the cryptocurrency market, particularly Bitcoin, which traded in the mid-to-upper $60,000 range during the week. Bitcoin has been supported by continued inflows into spot Bitcoin ETFs and growing institutional interest.

The approval of spot Bitcoin ETFs earlier in the year marked a major turning point for the cryptocurrency market. These products have made it easier for institutional investors, retirement accounts, and traditional brokerage clients to gain exposure to Bitcoin without directly holding the asset.

Another factor fueling optimism is the upcoming Bitcoin halving event expected later in the year. Historically, halvings—which reduce the rate at which new Bitcoin is created—have preceded major bull runs. While past performance is not a guarantee of future results, many investors believe the combination of reduced supply and increased institutional demand could support higher prices over time.

Back in the equity markets, earnings season continued to provide a mixed picture. Some companies reported strong results, particularly in technology and certain consumer segments. Others, especially in cyclical industries, warned of slowing demand or margin pressure.

The labor market remains one of the key pillars supporting the economy. Unemployment is still near historic lows, and wage growth, while moderating, continues to support consumer spending. This strength has been a double-edged sword for the market. On one hand, it supports corporate earnings. On the other, it gives the Federal Reserve less urgency to cut interest rates.

Federal Reserve officials reiterated during the week that they want to see sustained evidence of inflation moving toward their 2% target before beginning rate cuts. This message has tempered some of the aggressive easing expectations that were priced into the market at the start of the year.

Another important theme during the week was the debate over valuations. With the S&P 500 trading at elevated multiples compared to historical averages, some investors are concerned that the market may be getting ahead of itself. Others argue that strong earnings growth, particularly in technology, justifies current valuations.

Looking ahead, upcoming inflation reports, employment data, and Federal Reserve meetings will shape interest-rate expectations. Corporate earnings will also remain critical as investors look for confirmation that AI-driven growth is translating into real profits.

In summary, the week ending February 13, 2026, was marked by volatility beneath the surface, even as the major indices held near historic highs. The Dow closed at 49,500.93, the S&P 500 at 6,836.17, and the Nasdaq at 22,546.67. Technology and AI-related stocks remain the primary drivers of market performance, while Bitcoin continues to attract institutional interest.

Alphabet (GOOG) closed at $306.02 and Chris is up 78.29%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Alphabet because it dominates global digital advertising while expanding into AI and cloud computing. Its strong balance sheet and AI leadership make it a long-term compounder.

Amazon (AMZN) closed at $198.79 and Chris is down 4.44%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Amazon for its e-commerce dominance and AWS growth engine. Its AI, logistics, and advertising investments create multiple long-term growth drivers.

Apple (AAPL) closed at $255.78 and Chris is up 70.60%. Average analyst rating: Buy. Chris’s rating: Hold. Chris owns Apple for its powerful ecosystem and consistent free cash flow. Its loyal customer base provides long-term stability.

Costco (COST) closed at $1,018.48 and Chris is up 116.22%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns Costco for its membership model and strong pricing power. Customer loyalty continues to drive consistent growth.

Deere (DE) closed at $602.92 and Chris is up 71.98%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns Deere because of its leadership in precision agriculture technology. Global food demand supports long-term growth.

GE Aerospace (GE) closed at $315.41 and Chris is up 219.09%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns GE Aerospace for its dominant jet engine business and long-term service contracts. Global travel and defense spending create strong tailwinds.

GE HealthCare (GEHC) closed at $80.34 and Chris is down 2.42%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns GE HealthCare for its leadership in medical imaging and diagnostics. Aging populations drive long-term demand.

GE Vernova (GEV) closed at $802.13 and Chris is up 688.36%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns GE Vernova as a pure-play energy transition company. Global electrification trends support its growth.

Kroger (KR) closed at $71.25 and Chris is up 45.46%. Average analyst rating: Hold. Chris’s rating: Hold. Chris owns Kroger as a defensive, dividend-paying consumer staple. Its scale provides stable cash flow.

Meta Platforms (META) closed at $639.77 and Chris is up 10.36%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Meta for its advertising dominance and AI expansion. Strong cash flow supports long-term growth.

Microsoft (MSFT) closed at $401.32 and Chris is up 810.60%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Microsoft for its cloud leadership and AI initiatives. Its recurring revenue model makes it a core holding.

Procter & Gamble (PG) closed at $160.07 and Chris is up 97.75%. Average analyst rating: Buy. Chris’s rating: Hold. Chris owns PG as a defensive, dividend-paying blue chip. Its global brands provide consistent cash flow.

Amazon (AMZN) closed at $198.79 and Chris is up 74.98%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Amazon for its e-commerce dominance and AWS growth. Its multiple growth engines support long-term upside.

American Express (AXP) closed at $337.50 and Chris is up 102.48%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns AXP for its premium customer base and strong brand loyalty. High-spending customers drive consistent margins.

Apple (AAPL) closed at $255.78 and Chris is up 135.78%. Average analyst rating: Buy. Chris’s rating: Hold. Chris owns Apple for its ecosystem strength and recurring services revenue.

Nvidia (NVDA) closed at $182.81 and Chris is up 85.16%. Average analyst rating: Strong Buy. Chris’s rating: Buy. Chris owns Nvidia because it leads the global AI chip market.

Kinder Morgan (KMI) closed at $32.32 and Chris is up 116.71%. Average analyst rating: Hold. Chris’s rating: Hold. Chris owns KMI for stable pipeline cash flows and dividends.

Exxon Mobil (XOM) closed at $148.45 and Chris is up 76.92%. Average analyst rating: Buy. Chris’s rating: Buy. Chris owns Exxon for strong free cash flow and dividend strength.

Tesla (TSLA) closed at $417.44 and Chris is up 31.27%. Average analyst rating: Hold. Chris’s rating: Buy. Chris owns Tesla for its EV leadership and autonomous driving potential.

Palantir (PLTR) closed at $131.41 and Chris is down 13.74%. Average analyst rating: Hold. Chris’s rating: Buy. Chris owns Palantir for its AI-driven data analytics platform and long-term growth potential.

Alibaba (BABA) closed at $155.73 and Trip is up 100.94%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns Alibaba because it is one of the dominant e-commerce and cloud platforms in China. Improving sentiment toward Chinese tech could drive significant upside.

Strategy Inc. (MSTR) closed at $133.88 and Trip is down 22.88%. Average analyst rating: Hold. Trip’s rating: Buy. Trip owns MSTR for its leveraged exposure to Bitcoin. If Bitcoin rises, the stock could see substantial upside.

New Gold (NGD) closed at $11.06 and Trip is down 13.86%. Average analyst rating: Hold. Trip’s rating: Hold. Trip owns NGD as a hedge against inflation and economic uncertainty.

NextEra Energy (NEE) closed at $93.80 and Trip is up 6.93%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns NEE for its leadership in renewable energy and long growth pipeline.

GE Vernova (GEV) closed at $802.13 and Trip is up 700.18%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns GEV as a pure-play energy transition company benefiting from electrification trends.

Rocket Lab (RKLB) closed at $67.44 and Trip is down 22.22%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns RKLB as a long-term play on satellite launches and the space economy.

L3Harris (LHX) closed at $345.50 and Trip is down 3.28%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns LHX for exposure to defense technology and rising global defense budgets.

Apple (AAPL) closed at $255.78 and Trip is up 120.37%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns Apple for its ecosystem strength and consistent cash flow.

AST SpaceMobile (ASTS) closed at $82.51 and Trip is down 27.32%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns ASTS as a speculative play on satellite-to-phone connectivity.

Nvidia (NVDA) closed at $182.81 and Trip is up 56.07%. Average analyst rating: Strong Buy. Trip’s rating: Buy. Trip owns NVDA as the leader in AI chips.

IREN Ltd. (IREN) closed at $42.22 and Trip is down 29.63%. Average analyst rating: Hold. Trip’s rating: Hold. Trip owns IREN for exposure to crypto mining and high-performance computing.

Adobe (ADBE) closed at $263.97 and Trip is down 1.28%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns Adobe for its dominant creative software ecosystem.

Chevron (CVX) closed at $181.96 and Trip is up 9.89%. Average analyst rating: Buy. Trip’s rating: Buy. Trip owns Chevron for its dividend strength and global energy exposure. He believes geopolitical changes in Venezuela could create upside.

Bitmine Immersion Technologies (BMNR) closed at $20.96 and Trip is down 19.38%. Average analyst rating: Hold. Trip’s rating: Hold. Trip owns BMNR as a speculative crypto mining infrastructure play.

Navitas Semiconductor (NVTS) closed at $8.30 and Frankie is up 11.56%. Average analyst rating: Strong Buy. Frankie’s rating: Buy. Frankie owns NVTS for its gallium nitride power chip technology used in EVs and fast charging.

GE Vernova (GEV) closed at $802.13 and Frankie is up 700.18%. Average analyst rating: Buy. Frankie’s rating: Buy. Frankie owns GEV for its role in the global energy transition.

Nebius Group (NBIS) closed at $98.01 and Frankie is up 15.62%. Average analyst rating: Buy. Frankie’s rating: Buy. Frankie owns NBIS for its AI infrastructure growth potential.

Microsoft (MSFT) closed at $401.32 and Frankie is up 258.90%. Average analyst rating: Strong Buy. Frankie’s rating: Buy. Frankie owns MSFT for its cloud and AI leadership.

Tesla (TSLA) closed at $417.44 and Frankie is up 40.37%. Average analyst rating: Hold. Frankie’s rating: Buy. Frankie owns Tesla for its EV and autonomous technology leadership.

Palantir (PLTR) closed at $131.41 and Frankie is down 8.66%. Average analyst rating: Hold. Frankie’s rating: Buy. Frankie owns Palantir for its AI-driven data analytics platforms.

Aurora Innovation (AUR) closed at $4.48 and Frankie is up 14.87%. Average analyst rating: Buy. Frankie’s rating: Buy. Frankie owns Aurora as a long-term autonomous trucking play.

Meta Platforms (META) closed at $639.77 and Frankie is up 10.71%. Average analyst rating: Strong Buy. Frankie’s rating: Buy. Frankie owns Meta for its advertising dominance and AI growth.

One of the simplest and most widely used screening tools in real estate investing is the 1% Rule. This rule states that a rental property should generate monthly rent equal to at least 1% of its purchase price. In other words, if you buy a property for $200,000, the target rent should be around $2,000 per month. While it is not a perfect formula, it is a powerful quick-analysis tool that helps investors determine whether a deal is worth pursuing.

The 1% Rule exists because real estate investing is fundamentally about cash flow. Appreciation, tax benefits, and loan paydown are all important, but without sufficient rental income, a property can quickly become a financial burden. The 1% Rule helps investors avoid overpaying for properties that will struggle to produce positive monthly income.

For example, imagine two properties. The first is priced at $300,000 and rents for $1,500 per month. The second is priced at $200,000 and rents for $2,000 per month. Under the 1% Rule, the first property generates only 0.5% of its value in monthly rent, while the second meets the full 1% threshold. Even though the first property might be in a more desirable neighborhood, the second property is far more likely to produce positive cash flow.

The reason this rule works is that it builds in a margin of safety. Rental properties come with a wide range of expenses, including property taxes, insurance, maintenance, repairs, vacancy, and property management. When rent equals at least 1% of the purchase price, there is a stronger chance that these expenses can be covered while still leaving room for profit.

In many high-cost markets, the 1% Rule is difficult to achieve. Cities with rapidly appreciating home values often see rent growth lag behind property prices. In these markets, investors may rely more on appreciation and tax advantages rather than immediate cash flow. However, this approach carries more risk, especially if home prices stagnate or decline.

In contrast, markets that meet or exceed the 1% Rule tend to be more cash-flow-friendly. These are often found in growing secondary cities or areas with strong job creation, population growth, and affordable housing. For long-term investors, these markets can provide both steady income and appreciation potential.

It is important to remember that the 1% Rule is a screening tool, not a final decision-making formula. Once a property passes the 1% test, investors should perform a more detailed analysis. This includes calculating the cap rate, cash-on-cash return, internal rate of return, and long-term appreciation potential.

Financing also plays a major role. A property that meets the 1% Rule with a 20% down payment may produce excellent cash flow. But the same property with a higher interest rate or a smaller down payment could struggle to break even. That is why it is essential to run the numbers using your actual financing terms.

Another factor to consider is property condition. A property might meet the 1% Rule on paper, but if it requires significant repairs, the initial investment could be much higher than expected. Savvy investors often use the 1% Rule in combination with strategies like BRRRR (Buy, Rehab, Rent, Refinance, Repeat) to create value and improve cash flow.

For example, an investor might purchase a distressed property for $150,000, invest $30,000 in renovations, and then rent it for $1,800 per month. The total investment would be $180,000, and the rent would represent exactly 1% of that amount. If the property then appraises at $220,000, the investor could refinance, pull out cash, and repeat the process with another property.

The 1% Rule also helps investors stay disciplined. In hot markets, it is easy to get caught up in bidding wars or emotional purchases. By sticking to a clear numerical guideline, investors can avoid overpaying and focus only on deals that meet their financial criteria.

However, there are times when it may make sense to accept slightly lower numbers. For example, a property that produces 0.8% monthly rent in a high-growth area with strong appreciation potential could still be a solid investment. The key is understanding why the numbers differ and ensuring the investment still meets your long-term goals.

Ultimately, the 1% Rule is about simplicity and discipline. It provides a quick way to evaluate deals, filter out poor opportunities, and focus on properties that are more likely to produce positive cash flow. For new investors, it is an excellent starting point. For experienced investors, it remains a valuable tool for maintaining consistency and avoiding costly mistakes.

In our family’s real estate journey, we use the 1% Rule as one of our first filters. It does not replace a full financial analysis, but it helps us quickly identify properties worth deeper investigation. Over time, this simple rule has helped us stay focused on cash-flowing assets that support long-term wealth building.

This newsletter is for educational purposes only and should not be considered financial, legal, or tax advice. The information shared reflects the personal opinions and experiences of our family and is not a recommendation to buy or sell any securities or real estate. All investments involve risk, including the potential loss of principal. Always conduct your own research and consult with a qualified financial, legal, or tax professional before making any investment decisions.