By late February, geopolitical tensions escalated sharply. On February 28, during Operation Epic Fury, the United States conducted approximately 900 strikes within a 12-hour period. These developments occurred against an economic backdrop that was already showing signs of strain: rising unemployment reflected in downward job revisions, declining personal savings rates, elevated consumer debt levels, and a housing market that remains largely frozen due to higher interest rates. Adding to uncertainty, policy tensions between the administration and the Federal Reserve have further complicated the economic outlook.
 

We believe the conclusion of U.S. military operations involving Iran does not necessarily mark the end of economic repercussions. The Strait of Hormuz remains one of the world’s most critical strategic chokepoints, essential to energy flows serving Europe and Asia. Even if the United States maintains relative energy independence, global supply chains ensure that rising input and transportation costs ultimately affect the prices of goods and services domestically. In today’s interconnected economy, the U.S. is not insulated from global disruptions.
 

In response, we have positioned portfolios more defensively, emphasizing resilience amid heightened geopolitical and economic uncertainty. We have also moderated our exposure to gold following its strong performance. Much of the short-term, momentum-driven capital that entered the market seeking quick gains appears to have exited, and recent price movements have shown increasing correlation with broader market trends.  We seek to balance risk management with long-term opportunity.

As always, our focus remains on disciplined portfolio construction, price sensitivity, risk management, and maintaining flexibility as conditions evolve.

Cheers, Brian