To our clients and investors,

Spring has officially arrived in the Northeast. As April showers (hopefully) turn to May flowers, we have seen a similar theme in the financial markets, as they have bounced back just as the weather has. This quarter, our team met with PIMCO, Thornburg Investment Management, and Congress Asset Management. As part of our investment process, we aim to meet with a diverse group of asset managers and thought leaders across the financial industry to hear their views on the economy, markets, and investment ideas that may help us better allocate our clients’ capital. As always, we want to share some of our takeaways with you.

Equities

In many ways, 2026 has felt a lot like 2025. Last year, markets moved higher early in the year before volatility returned in a big way as winter turned to spring. While the reasons are different (trade and tariffs in 2025, the war in Iran this year), the pattern has been remarkably similar. As we often remind clients, it is incredibly difficult to time the markets and predict what direction they will go next.

Let’s do a quick thought exercise to reinforce this point:

What if we told you in January that a war in Iran would begin and eventually spread to other Gulf States? The Strait of Hormuz, where more than 20% of the global oil supply flows through, would be closed indefinitely. Oil prices would spike well above $100 per barrel, and there would still be no formal agreement in place to stop the conflict.

Most investors would reasonably assume that stocks would sell off sharply and U.S. government bonds would rally as investors sought safety. Yet as of this writing, the S&P 500 is up more than 7% year to date, while bond markets have experienced volatility as investors assess government debt levels, concerns around Federal Reserve independence, and broader policy uncertainty.

It is another reminder that headlines and market outcomes often do not move in tandem in the short term. Markets are forward-looking and constantly trying to price in what may happen next, not simply what is happening today.

While U.S. large-cap stocks have continued to move higher, we believe international markets, small-cap stocks, and other overlooked areas of the market remain attractive places to allocate long-term capital as well.

Fixed Income

Fixed income remains a very interesting area of the market right now. Lesser-known areas of the bond market have shown resilience, while government bonds have become an area investors are watching much more closely. As inflation concerns continue to weigh on central bankers, interest rate cuts are less of a certainty than they appeared to be just a few months ago.

While bonds are often viewed as “safe,” that can be misleading. Interest rate risk and credit risk still need to be weighed carefully for investors looking to generate income and reduce volatility within a portfolio.

One of the more interesting themes discussed this quarter centered around the growing tension between elevated government debt levels, persistent inflation concerns, and slowing economic growth. Several of our discussions considered that markets may continue experiencing periods where both stocks and bonds become volatile at the same time, which has historically been less common. In short, we need to prepare for an investment environment moving forward that may look different than the one investors have become accustomed to.

Conclusion

One theme we continue coming back to is that successful investing is not about predicting every headline correctly, timing every market move, or finding an investment product that removes uncertainty from the equation. Markets seem to be hanging on every press conference or news release, but there have been countless head fakes along the way.

Long-term success comes from building a thoughtful process and sticking with it through periods of uncertainty and volatility. Most importantly, it also means recognizing that volatility is often the price of admission for long-term growth, not necessarily a signal that something is broken.

Markets will always give investors reasons to feel anxious in the short term. There will always be geopolitical concerns, recession fears, inflation worries, and policy uncertainty just around the corner. Our process remains focused on proactive planning, disciplined diversification, and allocating capital based on each client’s unique situation, goals, and time horizon. Rather than trying to predict every twist and turn in the markets, we believe the better approach is building a strategy designed to withstand a wide range of outcomes over time.

As always, thank you for your continued partnership. Please do not hesitate to reach out to any member of your relationship team with questions.

Disclosure: It is important to remember that investments in securities involve risk, including the potential loss of principal invested. Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against loss in a declining financial market. Alliance also does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party mentioned in this communication and takes no responsibility. Federal taxes; states may differ. This is not intended to be individual tax advice. Please consult your tax professional. Alliance Wealth Advisors, LLC is independently owned and operated and not affiliated with PIMCO, Thornburg Investment Management, or Congress Asset Management. Additional disclosures can be found by visiting alliancewealthadvisors.com/legal-disclosures.