MRB Theme What Cant Be Sustained Wont Be Five Charts Highlighting Unsustainable US Trends July 28 2026

INVESTMENT THEME Independent Investment Strategy July 28, 2026

What Can’t Be Sustained Won’t Be: Five Charts Highlighting Unsustainable U.S. Trends Some of the historically strong increases in U.S. stock prices and corporate profits over the past few decades has been driven by unique forces that are inherently unsustainable. Investors should expect much lower returns in the coming decade. U.S. capital markets have had an extraordinary run since the early-1980s as inflation and interest rates declined steadily, assets got revalued and corporate profits soared. The run was interrupted for a time by the bursting of the technology bubble in the early-2000s, the collapse of the housing bubble and related banking crisis in 2008-2009, and the pandemic in 2020-2021, but has been recharged by the current A.I. boom1.

To many investors, A.I. holds the promise of sustained, strong U.S. and global economic growth for many years coinciding with well-behaved inflation that Prudence will enable corporate profits and stock prices to continue to trend higher for the warrants a more foreseeable future. conservative investment While we share investors’ view that A.I. will have a profound impact on the U.S. and stance than the global economies in the coming years, it is dangerous to assume it will translate top-down outlook into historically strong U.S. earnings growth and stock price gains2. The ultimate implies impact could be disinflationary, but the outcome is uncertain at this point.

Below we present five charts highlighting U.S. trends that will prove ultimately unsustainable and will fade sooner rather than later. While a catalyst to reverse the current trends is not yet apparent, prudence warrants a more conservative investment stance than the currently favorable top-down U.S. macro outlook implies over the next 6-12 months3.

1 MRB "How Stretched Is The Secular U.S. Equity Bull Market?", November 7, 2025

2 MRB "Long-Term Returns: This Time Is NOT Different", June 10, 2026

3 MRB "The Investment Cycle: Timing The End Game", April 28, 2026

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INVESTMENT THEME l July 28, 2026

Chart 1 Extraordinary U.S. Net Wealth Accumulation U.S. net wealth has risen dramatically over the U.S. Net Wealth* (% Of GDP) past 15 years, rising from approximately 390% 550 – – 550 Poised to to 520% of GDP. Past major increases in the reverse? net wealth-to-GDP ratio have been followed by significant declines, drawn out in the 1960s and 1970s, and abrupt in the early-2000s and again 450 – – 450 following the global financial crisis. There is no defined equilibrium or stable level that implies a reversion to mean looms, but the ratio is high by post-war standards. Indeed, Thomas Picketty estimates the ratio ranged between 300% and 350 – – 350 © 2026 500% between 1770 and 19504, underscoring

that the rise since the early-1990s is unusual and * Sources: Federal Reserve and U.S. Bureau of Economic Analysis is perhaps more likely to decline in the coming Note: Shaded for NBER-designated U.S. recessions years than continue to rise.

Chart 2 Equities Increasingly Discount A Very Optimistic Future The value of domestically-listed U.S. equities U.S. Domestic Equity Market Capitalization* (% Of GDP) has surged in recent years, with the ratio relative 250 250 to GDP rising by approximately 100 percentage Much higher than points since the end of 2019. At 250%, the ratio in 1990s’ bubble!

is some 80% higher than at the height of the 200 200

1990s’ equity bubble and reflects substantial optimism about the future economic and profit 150 150 outlook. Like all financial assets, equities are a claim on future real goods and services and there 100 100 is no definitive guide as to what the correct or sustainable ratio should be. That said, the ratio 50 50 cannot rise indefinitely and appears increasingly © 2026

prone to a significant decline at some point in the * Domestic publicly listed; sources: Federal Reserve and U.S. Bureau of coming years. Economic Analysis Note: Shaded for…