2026 Q1 Commentary
By Jason@vigilarewealth.com on April 11, 2026 in Investor Lounge
Market volatility was on full display in the first quarter. We had mentioned that 2026 would be a tumultuous year and certainly the first quarter was an example of this. This pattern is all too familiar of late, especially reminiscent of later stage cycles of maturing bull markets.
Our view for 2026 remains that markets can move higher, but not in a straight line and we are expecting at least one severe correction, even in the most of optimistic cases. The markets did decline in the first quarter, but not enough to classify as a severe decline.
We have mentioned recently that portfolios will see more rebalancing than historically. This is by design. Today’s market environment is such that the range of probable outcomes is as broad as we can remember.
This means that there will be whipsaw (meaning market signals might fluctuate faster than usual leading to multiple changing directions) volatility in portfolios. And we reserve the right to “pivot” based on evolving data. The future is uncertain and forecasting in this environment is a fool’s errand. We are not in the prediction business; we are managers of risk and probabilities. Again, our view is that the prevailing economic data is supportive of markets grinding higher, but the backdrop can shift quickly. Hence our Sherpa analogy for 2026.
As risk managers our duty to you is to participate and to be on the right side of the market as much as possible (meaning benefit from markets when they move higher and limit losses when markets are trending lower). Sometimes we might find ourselves being out-of-synch with markets over the very-short term (aka the whipsaw). However, we strongly believe that this is a small price to pay to avoid taking the blunt of a major market decline or conversely missing a long upward trend. The goal is not to try to “time” a market peak or a market bottom. That is next to impossible and only looks obvious/easy after the fact. And most importantly it leads to poor investment results. The proper approach is to wait for data to confirm shifts in market outcomes, and then to systematically make the appropriate adjustment to your portfolio.
Again, we do remain optimistic this year and do believe in markets generally moving higher over the long term. But there are instances when the market hits a secular “peak” and then it taking years to recapture that prior peak. For example, it took the Nasdaq 15 years to recover from the 1999 peak, and 16 years for the Dow to recover from the 1966 peak. More recently, it took the S&P 500 six years to recover from the 2007 peak. In each of these cases, the strategy of managing the downside risk would not only preserve your wealth, but also better position us for the opportunities to benefit from the inevitable recovery. Keep in mind it takes years for the markets to recover, but the bulk of the actual market losses happen in the first year or two. Some of you remember this, having been with us (in a different capacity) during the 2008 financial crisis. This is not our first rodeo.
In summary, our view is not imminent doom and gloom, but history does point to the possibility of a peak in the not-so-distant future. More than ever, this is not the time to be complacent and assume that each sell-off will lead to a “V” shaped rally. We want to continue to ride this market bull but at the same time take precautions to not get violently bucked off.
Thank you for your trust.
The Vigilare Wealth Management Team
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