April 2026 Client Letter

As the Iran conflict enters its second month, geopolitical stress continues to test investors. Historical stock market performance during periods of conflict reminds us that markets are often more resilient than the moment may suggest. As we assess today’s environment and the uncertainties surrounding ongoing military operations in Iran, we look to past periods that may offer useful context, though past performance does not guarantee future results.

The two periods we reference offer important contrasts. In 1990, at the start of the first Gulf War, the U.S. economy was slipping into recession. Corporate profits were flattening, inflation remained elevated, and consumer confidence was fragile. With limited fundamental support, markets initially struggled. Yet even then, equities began recovering well before the conflict formally ended, anticipating eventual stabilization.

By contrast, in 2003, when the Iraq War began, the economy had already recovered from the dotcom bust and corporate accounting scandals of the early 2000s. Earnings were rebounding, monetary policy was supportive, and valuations were more reasonable. With stronger fundamentals in place, markets responded positively after hostilities began and went on to support a multi-year bull market.

Today, we see elements of both periods. Importantly, however, we do not see evidence that the long-term economic or earnings outlook has been meaningfully impaired. While geopolitical uncertainty can weigh on sentiment, history suggests that markets are primarily driven by underlying fundamentals over time.

Key risks remain, including the potential for energy supply disruptions given Iran’s proximity to the Strait of Hormuz, which may contribute to continued volatility in the near term. However, history also shows that markets often begin to recover well before geopolitical tensions are fully resolved, frequently with strength once clarity begins to emerge.

While no one can predict the duration of this period of volatility, the underlying economic foundation and corporate earnings power remain intact. We continue to believe it is appropriate to maintain portfolio risk at long-term target levels and remain well diversified. Periods like this are uncomfortable, but they are also when long-term investors are most often rewarded for staying disciplined.

As always, thank you for your continued trust. Please let me know if there is anything I can do for you or for someone you care about.

Sincerely,

Ed

^{Important Information}

^{This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.}

^{References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.}

^{All data is provided as of March 31, 2026.}

^{All index data from FactSet.}

^{There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.}

^{Past performance does not guarantee future results.}

^{Asset allocation does not ensure a profit or protect against a loss.}