Issue #20: February 2026

Congratulations to this month's sponsored giveaway winners:
Sue K., Hannah P., Sam K., and Samantha C.

Life

Two Birthdays and Two Florida Trips

We celebrated my son’s 11th birthday last week, and my wife turns 40 next week, so it’s been a fun run of family celebrations. February is always a busy month, but having these moments mixed in with the early spring real estate rush has made it feel like a good kind of busy.

We took a Disney cruise last month, and we’re heading back to Florida next week to check out Discovery Cove and spend some time in Orlando. Two Florida trips in two months has definitely added some sunshine to winter.

Most days kick off around 5 a.m. for me and stay busy right through bedtime. Juggling the patent job, real estate, and three kids is a lot, but I’m grateful to do all of it—even when it feels like a sprint.

Personal Finance

The personal finance part is a bit detailed this month. I wanted to dig into the numbers, but if it feels heavy, I’d love to hear your thoughts. Just hit reply and tell me what you prefer.

A Simple Case for Adding Small-Cap Value to Your Portfolio

Investor educator Paul Merriman often points to small-cap value as one of the most reliable long-term return engines. Decades of market data show that smaller, undervalued, and profitable companies have historically outperformed the overall market—not every year, but very consistently over long time horizons.

Why it works:

• Smaller companies have more room to grow
• Value stocks tend to be priced more conservatively, creating opportunity
• It diversifies away from today’s mega-cap tech concentration
• It historically improves long-term risk-adjusted returns when paired with broad market exposure

In Merriman’s simple Four-Fund Portfolio, small-cap value is the key tilt:

• Large-Cap Blend: VTI, VOO
• Large-Cap Value: VTV, SCHV
• Small-Cap Blend: VB, IJR
• Small-Cap Value: AVUV (his favorite), VBR, IJS

A quick note on AVUV (if you like numbers)

AVUV (Avantis U.S. Small-Cap Value) has become a popular option because it doesn’t just track an index—it actively screens for:

• smaller companies
• strong profitability
• attractive valuations

This gives it a “truer” small-cap value tilt than many traditional index funds, which is exactly the type of exposure Merriman’s research focuses on.

AVUV (small cap value) vs. VOO (S&P 500) — Year-by-Year Returns
(Since AVUV Inception in 2019)

VOO (S&P 500):​
2019: +31.36%
2020: +18.32%
2021: +28.79%
2022: −18.17%
2023: +26.32%
2024: +24.98%
2025: +17.82%
2026 YTD: +1.29%

AVUV (Small-Cap Value):​
2019: +8.50%
2020: +6.43%
2021: +42.20%
2022: −4.91%
2023: +22.82%
2024: +9.29%
2025: +7.44%
2026 YTD: +12.95%

Total Return Since Inception (Sept 2019)
​VOO: ~+153%
AVUV: ~+154%
(Despite very different holdings, they’ve delivered nearly identical cumulative returns.)

Annualized Return Since Inception
​VOO: ~15.6% per year
AVUV: ~15.7% per year

Decade-by-Decade Comparison
​(Small-cap value uses widely cited Fama–French research summaries)

1970s:​
Small-Cap Value ~12–13%
S&P 500: 5.9%

1980s:​
Small-Cap Value ~15–16%
S&P 500: 17.6%

1990s:​
Small-Cap Value ~11–12%
S&P 500: 18.2%

2000s:​
Small-Cap Value ~10–13%
S&P 500: –0.9%

2010s:​
Small-Cap Value ~10–11%
S&P 500: 13.6%

Volatility Snapshot (Quick Takeaways)

• AVUV swings more — bigger positive spikes in value-driven years and smaller losses in down years.
• VOO is smoother, but can suffer deeper drawdowns when large-cap growth sells off.
• They zig and zag differently, which is why small-cap value can actually improve diversification.
• With AVUV, expect wider year-to-year variation — both up and down.

If you’re looking to balance out a portfolio that’s heavy in large-cap growth, a modest small-cap value allocation can meaningfully boost diversification and long-term resilience.

This content is for educational purposes only and is not financial advice. Please consult a licensed financial professional before making any investment decisions.

Real Estate

A Busy Start to the Spring Market in Northern Virginia

It’s been a busy stretch lately—with new contracts, closings, and more clients reaching out—and that’s usually the first sign that the spring market is kicking into gear. Activity is building across Northern Virginia, and I expect momentum to keep growing as more homes hit the market.

Here’s what I have going on so far in 2026:

Closed​
• Buyer — $654,000 townhome in Chantilly
• Buyer — $801,000 townhome in Herndon

Under Contract​
• Buyer — $1,350,000 condo in Arlington
• Buyer — $1,275,000 single-family home in Ashburn
• Buyer — $615,000 condo in Chantilly

Coming Soon​
• Seller — $750,000 townhome in Springfield (West Springfield HS)
• Seller — ~$515,000 condo in Arlington (Pentagon City; not in MLS yet)

On top of these, even more people are reaching out about buying and selling. Buyers seem to have fully adjusted to today’s rate environment—most have accepted that the 2.5–3% days aren’t returning anytime soon, and 6% feels much more “normal” now. That mindset shift is helping fuel a more active spring market.

One thing I’m continuing to help a lot of buyers with right now is assumable loans. They’ve become a bit of a niche for me—I’ve closed five assumable-loan transactions so far—and they’re still one of the best ways to secure a significantly lower interest rate in today’s market. If you’re open to the idea of taking over a seller’s existing loan (sometimes in the 2–3% range), these opportunities are still out there, and I’m tracking them closely for clients who want to explore this route.

Here's a $775,000 SFH in Springfield with a 2.25% interest rate assumable loan. You'd have to have enough cash to cover the gap between sales price and loan amount remaining, but investors can assume this one (VA entitlement not required).
​7039 Calamo St., Springfield, VA 22150​

If you have questions about real estate, reach out to me at realtordannylee@gmail.com. Follow me on IG @realtordannylee.