Staying the Course in Uncertain Markets
We hope this note finds you and your family doing well.
It has been a volatile start to the year in the markets, driven in part by the Iranian conflict and rising oil prices. Despite this turbulence, most major indices have rebounded and are now at or near their highs for 2026. This serves as a valuable reminder of the importance of staying invested and riding through periods of uncertainty.
We remain cautiously optimistic about the economy and corporate earnings. While earnings and forward estimates increased in the first quarter, market returns were negative—an uncommon divergence that could present opportunity for the remainder of the year. Additionally, we are in a midterm election year. Historically, when looking at market returns from January 1, 1926, through March 31, 2026, the first three quarters tend to be more subdued, often followed by a stronger fourth quarter.
Of course, there is no crystal ball. However, with strong earnings trends and anticipated economic stimulus from tax cuts, we believe there is a supportive backdrop for both the market and the broader economy.
Recently, our partners at BlackRock shared an insightful chart highlighting past geopolitical events and subsequent market performance, reinforcing the importance of maintaining a long-term perspective.
About a month ago, we rebalanced most of our investment models. Key takeaways from those changes include:
1. We maintained a modest 3% overweight to equities, while redistributing risk more intentionally—taking profits in outperforming areas and reducing certain factor concentrations.
2. We slightly reduced our overweight positions in U.S. stocks and emerging markets, while remaining underweight in developed international markets.
3. We continue to have strong conviction in artificial intelligence and enhanced our exposure, focusing on both core technology builders and companies leveraging AI for competitive advantage.
4. We increased our allocation to defense stocks, shifting from a U.S. aerospace-heavy approach to a more globally diversified strategy to capture what we believe is a multi-year global spending cycle. The exception to this strategy are those of you in our ESG (formerly socially responsible) investment models.
5. We strengthened the bond portion of portfolios to improve downside protection by reducing credit-heavy exposures and increasing allocations to high-quality, longer-duration government bonds.
Horst & Graben News
We’re excited to share a few updates as our team continues to grow and evolve to better serve you.
Mieke (Mee-Kah) Wright has joined us to support forms processing and account updates. Her role will help streamline administrative workflows and improve efficiency across account maintenance and documentation.
In the near future, Sonia will transition into a role within our planning and rollover team. This move reflects both her experience and the growing demand in that area, and we are confident she will further strengthen our planning capabilities.
Additionally, Becca will be stepping into a more client-facing role, meeting directly with clients to review accounts, discuss updates, and ensure plans remain aligned with goals. We are excited for her to deepen those relationships.
These positive developments—and our continued growth—would not be possible without you.
We greatly appreciate your trust and the relationship we share. Please don’t hesitate to reach out with any questions.