Uncertainty and Financial Markets

Brett Lozowski

The first few months of 2026 has certainly been a rollercoaster for financial markets.

The US Stock market (S&P 500 index) started the year down 4.3%. International stocks (Vanguard Total International Stock Index) gained 1.75% in the first quarter. Bonds held their value to start the year.

The geopolitical conflict in Iran adversely affected US stocks in the first quarter. Higher oil prices and fears of sustained inflation caused a 9% decline in US stocks in just a few weeks.

As pessimism grew about the outlook for financial markets, plans for a proposed peace deal rallied financial markets last week and allowed US stocks to re-enter positive territory for the year.

It just goes to show how quickly things can change with financial markets. As Sir John Templeton famously stated, “The four most dangerous words in investing are: 'This time it's different’”. The slightest bit of good news can go a long way for financial markets.

Diversification remains key to being prepared for an uncertain future, and this recent market pullback is no different. We saw this same story play out in 2025. International stocks and bonds served as a ballast for portfolios as US stocks tumbled. Diversification in other asset classes has always cushioned volatility in financial markets and remains an important part of our investment approach.

Unfortunately, these market pullbacks remain unpredictable and unavoidable. That’s why we place such a strong emphasis on diversification and make sure your investment portfolios match the level of risk you can take financially and psychologically. The long-term investor who sticks with their investment policy has historically been rewarded.

What’s going on in the world isn’t easy to digest. Geopolitical conflicts can certainly cause angst about the future of the world and your financial well-being. We will get through this and see better days.

We are just a phone call away if there is anything on your mind you want to discuss.