Client Newsletter Q1 2026
Dear Friends,
The first quarter tested patience. Markets moved to reflect a higher level of risk, and that was felt across portfolios. There is always something demanding attention and inviting reaction. What matters more is what is changing underneath, and whether it affects the value of what you own.
This quarter, that meant absorbing real pressure on energy markets. The Strait of Hormuz remains one of the world's most critical chokepoints. When it comes under pressure, oil moves, inflation follows, and rates stay higher for longer. Asset prices adjusted. The underlying businesses did not.
Just as important is what did not happen. The economy did not break. People are still spending, and businesses are still investing. Billions continue to flow into the infrastructure required to support AI. Those are long-term commitments. They do not get made unless demand is real. AI is not new. What is new is the scale of capital behind it.
The benefits remain uneven. The labor market has slowed, but it remains stable. People who have jobs are largely keeping them, while hiring has cooled. AI is affecting jobs sooner than it is affecting prices, and higher energy costs and tariffs are keeping inflation stubborn. Rates will likely stay elevated. That shapes the environment, but it does not change our approach.
Markets repriced risk. They did not erase value. That distinction matters. Periods like this move prices more than they change underlying worth. Like every quarter, we review positioning carefully. The businesses and assets we hold were chosen to weather cycles like this one, not because we expected every quarter to be smooth, but because resilience matters.
So what does all this mean for your portfolio? It means staying the course. Markets often move ahead of the news. By the time things feel better, prices have usually already adjusted. When headlines feel most unsettling, the pressure to react is often strongest at exactly the wrong moment. Our job is to stay grounded and not let short-term sentiment drive long-term decisions.
Heading into the second quarter, we are watching how inflation data evolves and how long rates stay elevated. We are positioned for a longer adjustment period and are comfortable with that posture. We remain focused on what we own and why we own it.
Wishing you a good spring and a strong quarter ahead.
Best,
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
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