Hear No Opinions, Read No Opinions, Think No Opinions
Torsten Sløk, Chief Economist at Apollo Global Management, observed on March 27: “Markets are overreacting to what will likely be a 4- to 6-week period of volatility, which will ultimately result in 50 years of stability in oil markets, supply chains, and geopolitics.”
Edward Dowd, a former BlackRock portfolio manager, warned in late March interviews of a potential 40-50% stock market decline and a roughly 30% drop in home prices, citing fragility in private credit, an AI bubble at risk of bursting, and broader systemic stresses.
Equities have delivered strong long-term gains for patient investors, but short-term noise can test even the steadiest nerves. Each of these experts makes a compelling case grounded in rigorous analysis, but the conclusions are so extreme as to appear naïve. “Fifty years of stability in oil markets, supply chains, and geopolitics”? Really?
When investment decisions are driven by others’ opinions, a single headline-grabbing idea can cause significant damage, especially if it later gets qualified or retracted. Be careful what you read and to whom you give credence. We prefer an investment approach that forms its own opinions through research, and we are grateful to deliver that process to our wonderful clients.
March Madness, Market Reality
The first two months of 2026 felt constructive. Equity gains were reasonably broad, with improved participation from small- and mid-cap stocks. March brought a different tone: developments tied to the Middle East conflict, including higher oil prices, renewed supply chain concerns, and geopolitical uncertainty, triggered a pullback. For the quarter, the S&P 500 posted a -4.3% return. As always, we view any single quarter through the lens of multi-year purchasing power growth.
Crude Realities
Valuations remain elevated by historical standards. The cyclically adjusted price-to-earnings ratio and other valuation metrics sit near levels that have typically preceded periods of limited upside and, occasionally, large declines.
Lagged effects from global disruptions are also on the horizon. The Middle East conflict continues to influence energy costs and trade flows, with impacts likely to surface later in corporate margins and investment decisions. Changes in crude oil prices take roughly nine months to filter through the broader economy, and the effects touch nearly everything.
Credit markets also reflect growing caution. Spreads have widened modestly from recent lows, and the expanded private credit universe is showing late-cycle strains, including selective stress and maturing debt pressures. Some redemption requests from private credit investors are now subject to caps on quarterly withdrawals. If those requests represent cash-flow needs for mandatory spending by pensions or other entities, the demand will shift to more liquid holdings, including publicly traded debt or even equities. It is a development worth watching.
The chart on the next page illustrates the relationship between the cost of credit and stock market valuations, plotting the S&P 500 (green line, left axis) against the ICE BofA U.S. High Yield Option-Adjusted Spread (blue line, right axis). Note the recent widening in credit spreads as equity momentum moderated during March’s volatility.
A Purchasing Power Protocol
Healthy gains over the past three years have been welcome, yet strong appreciation tends to drive higher valuations and raise the prospect of a meaningful shift toward uncertainty. Our Wealth of Nations® approach, detailed at www.robinsonvalue.com, remains unchanged. It offers a distinctive way to build a diversified portfolio using a four-asset-class framework (equities, fixed income, real/hard assets, and cash) rather than the traditional two-asset-class approach.
Within Wealth of Nations®, allocations to fixed income and real/hard assets are deliberately concentrated rather than broadly diversified. Individual holdings are selected for their low correlation with other asset classes, particularly during periods of crisis. For fixed income, the strategy primarily uses long-term US Treasuries, on the grounds that shorter maturities are essentially cash substitutes and that higher-yielding bonds increasingly behave like stocks. Long-duration sovereign bonds typically benefit from recession fears and “flight-to-safety” behavior. For real/hard assets, Wealth of Nations® uses precious metals, which offer solid protection against excessive cash positions and local-currency debasement.
Wealth of Nations® holds strategic positions across the four asset classes over the long term while also making incremental tactical adjustments, particularly when governments shift their focus among policy objectives. It is built around what clients actually have to live with: purchasing power, or inflation-adjusted returns. That focus leads to different answers than a traditional emphasis on nominal returns.
Please reach out if you would like to discuss growth and protection of purchasing power, or any other details regarding your portfolio. We will continue to navigate these crosscurrents with the same risk-aware discipline that has guided clients across market cycles. With sincere appreciation for your continued trust.
