Market Commentary · Q1 2026

Risk investments, like stocks, hate uncertainty — especially wars. The more boring the news, the better for businesses, allowing them to focus on improving profits, making long-term capital investments, and thereby improving their stock price.

The following chart (SPY ETF) going back 10 years shows that we have had to deal with several bumps in the generally upward moving price chart. It also puts the current small decline due to the Iran War in perspective compared with the event-related selloffs that have happened in the past.

When events like this occur, we make changes in our Managed Mutual Fund portfolios to reduce risk. Most recently we have moved 15% position in SPY into a less volatile fund (FAUG) which also has a 10% downside buffer. Our Gold position has been particularly helpful in cushioning market declines and improving overall returns, and we are maintaining that position during the current period of market fear.

Of course, we cannot predict the future. The current Iran War could be prolonged and oil prices could get out of control. This means that we may have to employ stronger protections to prevent excess declines in the portfolios. This may include deeper buffered vehicles or even money market (cash) positions.

Our basic method of management is to discern shorter term changes in relative strength and make changes in response to what the components of the stock market tell us about the future direction. Of course, each of our clients has different needs and therefore a mix of different investments in cash, fixed income (bonds and annuities) and equities (stocks). Please contact us with any concerns or questions you may have regarding your investments.

— With regards, John, Peter & Jack
CFP® · ChFC® · Series 65

Past performance success is not a predictor and cannot guarantee future investment results.