Market Volatility in 2026: Why Executives Are Rethinking Concentrated Positions

The first half of 2026 has presented shareholders with a market environment more complex than most anticipated entering the year. Geopolitical developments — including the U.S.-Iran military conflict in late February and its subsequent ripple effects through energy markets and investor sentiment — contributed to meaningful volatility across global equities. Simultaneously, the Federal Reserve's shift toward a rate pause after six cuts totaling 175 basis points since 2024 has introduced uncertainty about the trajectory of financing costs. And a meaningful slowdown in private equity deal activity in Q1 2026 has created pressure on shareholders who had anticipated near-term liquidity events that have not materialized on schedule.

Against this backdrop, a specific category of shareholder — executives, founders, and family offices holding concentrated positions in publicly traded securities — faces a distinctive set of pressures and considerations.

The IPO Market and Its Implications

2025 saw a meaningful uptick in IPO activity, with Q3 2025 representing the strongest quarter for new issuances since 2021. This created genuine optimism that the liquidity drought experienced by many founders and early investors since 2022 was coming to an end. Entering 2026, that optimism has been tempered. Deal volume headwinds have slowed both M&A activity and the pace at which new liquidity events are reaching shareholders who had been waiting for them.

For a founder who anticipated a secondary offering or a strategic transaction in early 2026, the delay is not merely an inconvenience. Capital that was expected to become available — for reinvestment, for real estate, for estate planning, for charitable giving — remains locked in a position that cannot easily be exited without market impact.

Concentration Risk in a Volatile Market

Concentration risk is a persistent feature of the wealth profiles of the most successful founders and executives. It is not a failure of financial planning. It is the natural consequence of building something valuable and retaining a meaningful stake in it. But the risk profile of a concentrated position looks different when market volatility increases.

A twenty percent decline in a diversified portfolio is a correction to be managed. A twenty percent decline in a position that represents eighty percent of a founder's net worth is a material deterioration of their financial security. In the current environment, with equity markets subject to rapid sentiment shifts driven by geopolitical developments, AI-driven reassessments of technology sector valuations, and macroeconomic uncertainty, the case for finding ways to reduce concentration risk without simply selling has become more compelling.

Why Selling Remains the Wrong Answer for Many

The instinctive response to concentration risk is to sell. In many situations, selling is the right answer. But for a significant number of executives and founders, selling is complicated by factors that have nothing to do with their view of the company's future prospects.

Trading window restrictions prevent executives from selling during the periods when they might most want to — precisely when volatility is highest and concentration risk feels most acute. Rule 144 limitations on the volume and timing of insider sales constrain the pace at which a large position can be liquidated without regulatory complexity. And for shareholders who have held appreciated positions for many years, the tax cost of realizing those gains remains a powerful disincentive, regardless of market conditions.

In 2026, with the Federal estate tax exemption permanently set at $15 million per person following legislative changes at the start of the year, multigenerational wealth planning has become a more prominent consideration for UHNW families. Selling appreciated securities to fund current liquidity needs — rather than transferring them through more tax-efficient structures — can permanently reduce the wealth available for estate planning purposes.

The Role of Non-Recourse Stock Loans in the Current Environment

For shareholders who cannot or choose not to sell, a non-recourse stock loan offers a way to access the liquidity that a concentrated position represents without exiting it. The structure is particularly well-suited to the current environment for several reasons.

First, a non-recourse loan does not trigger a taxable event. The capital accessed through the loan is available for reinvestment, real estate acquisition, or other purposes without the tax cost that would accompany a sale. Second, the non-recourse structure means that if market conditions deteriorate significantly during the loan term, the borrower's exposure is limited to the pledged shares. There is no margin call, no forced liquidation at an inopportune time, and no personal liability beyond the collateral. Third, the loan is private. Unlike an insider sale, which must be disclosed, a stock loan arrangement does not create a public signal about the shareholder's view of the company.

For executives, founders, and family offices navigating the current environment, the question is not whether to manage concentration risk — it is how to do so in a way that preserves optionality, minimizes tax exposure, and avoids the signals and constraints that accompany a conventional sale.

Stone Creek Global has arranged non-recourse stock loan facilities across 195 countries and 80+ exchanges since 2007, with transactions ranging from $1,000,000 to over $1,000,000,000. All engagements are conducted with complete confidentiality.