“Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.” — John Allen Paulos

We didn’t have “war with Iran” or “closure of the Strait of Hormuz” on our 2026 bingo card, but with markets at all-time highs, we entered the year prepared. While our accounts have pulled back from recent peaks, they have declined less than the broader market due to our higher cash levels and extensive use of covered calls heading into March. This wasn’t a matter of foresight so much as discipline. We took a cautious approach, focusing on capital preservation as valuations appeared somewhat stretched. We don’t know how this situation will unfold. The conflict could become prolonged or resolve quickly. Either way, we will remain cautious while continuing to identify long-term growth opportunities for investment.

From an economic perspective, the U.S. economy remains on relatively solid footing. Corporate earnings are still projected to grow in 2026, despite higher energy costs. Unemployment has edged up to 4.3%. The recent rise in inflation is largely driven by higher oil prices following the closure of the Strait of Hormuz. Because interest rate hikes are generally ineffective against inflation caused by a supply shock, we expect the Federal Reserve to keep rates steady and tolerate moderately elevated inflation until conditions stabilize.

As a client, you have access to eMoney, a comprehensive financial planning and budgeting tool. Owned by Fidelity, it integrates seamlessly with your investment accounts to provide a complete financial picture. The platform includes budgeting features that help you better understand your cash flow and spending patterns, and it can automatically sync with your bank and credit card accounts to stay current.

In addition, eMoney offers powerful planning tools that allow us to model your long-term financial outlook, including retirement scenarios. If you are not currently using eMoney and would like access, please let us know. This is a complimentary service included as part of your relationship with us, and we encourage you to take full advantage of it.

Very truly yours,

Michael F Cantlon
Thomas E Guyett
Robert T Gephart