Q1 2026
Key Takeaways: When Noise Tests Discipline
One client called me in March and said:
“I bet your phone is ringing off the hook with everything going on.”
Truthfully? They were the only one.
I’d like to think that says something—not just about the trust we’ve built, but about the proactive way we prepare clients for quarters like this.
Because if you judged Q1 by headlines alone, you would think the market was on the verge of falling apart.
Inflation flared.Oil surged past $100.Geopolitical tensions escalated.The Federal Reserve stayed put.Stocks got volatile.
It was the kind of quarter that makes investors feel like they should be doing something.
But here is the reality:
Volatility and crisis are not the same thing.
Q1 was a test of discipline—not a reason to abandon it.
What Happened This Quarter
The first quarter delivered no shortage of headlines.
Geopolitical tensions in the Middle East escalated materially, disrupting energy markets and briefly sending oil above $100 per barrel before retracing as de-escalation efforts emerged. It was one of the sharpest short-term oil spikes in recent years.
That pressure flowed directly into inflation data.
March CPI rose 0.9% month-over-month, the largest monthly increase in years, with gasoline prices responsible for the majority of the move.
But core CPI—which strips out food and energy—rose a much more modest 0.2% month-over-month. That distinction matters far more than most headlines acknowledged.
Meanwhile, the Federal Reserve held rates steady in the 3.50%–3.75% range and signaled no rush to begin cutting.
Markets responded with volatility—particularly in richly valued growth and technology stocks.
At the same time:
The U.S. dollar softened modestly at points during the quarter
International equities continued showing signs of relative improvement versus the concentrated U.S. mega-cap trade
In short:
The environment became more complicated.
Not catastrophic. More complicated.
What Actually Mattered
1. The Inflation Spike Was Narrow, Not Broad
Yes, inflation moved higher.
But context matters.
This was not a broad-based resurgence of 2021–2022 style inflation. The vast majority of the increase came from energy—an area heavily influenced by geopolitics and historically prone to sharp, temporary moves.
Temporary price shocks and structural inflation are not the same thing.
One reflects short-term disruption.The other reflects a deeper economic imbalance.
When investors treat every inflation print as if it tells the full story, they often end up reacting to noise instead of signal.
That is a costly mistake to make repeatedly.
2. My Honest Take on the Fed Obsession
Much of Wall Street spent the quarter fixated on one question:
“When will the Fed cut?”
I continue to believe that is the wrong question.
Frankly, the obsession with Fed decisions often exceeds their actual importance.
Yes, the Fed matters. But consider a few realities:
The Fed directly controls only the shortest end of the yield curve
Mid- and long-term rates matter more for much of the real economy
Businesses and consumers have historically adapted to many rate environments
And perhaps most importantly:
If the economy is healthy, why do we need cuts so badly?
The Fed held steady because growth remains resilient and inflation has not fully normalized.
That may frustrate markets in the short run. But it is hardly evidence that something is broken.
3. Leadership Is Starting to Broaden
For much of the past two years, a narrow group of mega-cap U.S. technology stocks drove an outsized share of market returns.
That concentration worked—until it didn’t. Q1 offered an early reminder that leadership does not stay concentrated forever.
We began to see:
Relative softness in crowded growth and AI-related trades
Improved performance from emerging markets, small caps, and developed international equities
Early signs that diversification away from the “AI trade” may be earning its keep again
One quarter does not make a trend. But it reinforces a timeless principle:
Leadership rotates. It always has.
The High Achiever’s Investing Problem
There is a behavioral trap many successful professionals fall into during quarters like this.
The instincts that help you win in your career often work against you in investing.
At work:
A problem arises
You act
You solve
You improve outcomes
That bias toward action is a superpower.
In markets? It can be expensive.
When oil spiked and volatility picked up in March, many investors felt the urge to:
reduce risk
move to cash
“wait for clarity”
do something that felt prudent
But more often than not, that instinct simply locks in temporary fear as permanent damage.
In investing, reacting feels productive far more often than it actually is.
How We Thought About It
Philosophy is easy to claim. Process is what matters.
So when volatility spiked in March, here is how we thought about it:
We did nothing.
Not because we were asleep at the wheel. Because the work had already been done.
Our view was straightforward:
First: Oil shocks tied to geopolitical events are historically sharp—but often temporary.
Second: Even after the spike, oil prices only returned to levels we have seen before in prior cycles.
Third: While geopolitical events create frightening headlines, they have historically been poor predictors of prolonged market declines.
We did not try to guess where oil was going next. We did not try to predict the Fed.
We simply evaluated whether the quarter changed the long-term investment case.
In our view: It did not.
What This Reinforced About Portfolio Strategy
Concentration Risk Still Matters
The past several years rewarded investors who concentrated heavily in a narrow set of U.S. growth stocks. Concentration works—until it doesn’t.
Q1 was another reminder of why we continue emphasizing:
broad diversification
valuation discipline
avoiding overreliance on any single sector, region, or narrative
Quality Still Matters
Periods of volatility tend to remind investors which businesses are durable—and which were simply expensive stories.
Companies with:
strong balance sheets
real cash flows
durable competitive advantages
typically prove more resilient when sentiment shifts.
That remains where we prefer to invest.
The Bigger Lesson
I will admit—even after decades of following markets—I found myself checking headlines more than usual this quarter.
That is human.
The difference is experience has taught me that consuming more headlines rarely improves portfolio decisions.
Q1 did not require prediction. It required calm discipline.
We do not build portfolios around guessing:
where oil goes next
when the first Fed cut arrives
how long geopolitical tensions persist
We build portfolios to withstand environments where no one knows those answers.
Because the goal is not to build a portfolio that only works when conditions are calm.
The goal is to build one that still works when they are not.
Final Thought
Noise did not change the plan this quarter.
It tested it.
And in wealth building, some of the most important decisions you make are the ones you resist making when everyone else feels compelled to act.
If Q1 raised questions about your portfolio, your financial plan, or simply how you felt watching the volatility— That reaction is worth discussing.
Because real 360° planning is not most valuable when markets are calm. It is most valuable when they are not.
Building Wealth is by Choice, not Chance.
Truly Yours,
Jason Blumstein, CFA
CEO & Founder
Julius Wealth Advisors, LLC
Disclosures:
This piece contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov.