Resources/Weekly Insights

Volume 15, Edition 9 | March 16 - March 22, 2026

Betting on Upside

Doug Walters, CFA

Markets can feel unsettling when headlines turn negative, but uncertainty is a permanent feature of investing, not a signal to retreat. In this week’s Insights, we explain why staying disciplined, fully invested, and opportunistically rebalancing has historically been a more reliable path than trying to bet on short‑term market declines.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

Recent market weakness tied to escalating conflict in the Middle East has understandably made some investors uneasy. When headlines are unsettling and markets pull back, a natural question follows: What should I be doing right now, and what is my investment team doing on my behalf?

Our answer starts with two simple but powerful truths…

First, the future is unknowable.
Markets react to an endless stream of information, geopolitics, economic data, policy decisions, investor psychology. Some risks are visible, many are not. History shows that trying to predict short‑term market moves, especially during periods of uncertainty, is extraordinarily difficult. Those claiming success, are more likely experiencing luck. Even when risks feel obvious in hindsight, they are rarely obvious in real time.

Second, markets tend to rise over time.
Despite wars, recessions, political turmoil, and countless “reasons” to get out, long‑term investors have been rewarded for staying invested. This upward bias is why stocks exist in the first place. It’s also why betting on market declines, trying to sidestep downturns, is such a dangerous game. Miss just a handful of strong recovery days, and long‑term results can suffer meaningfully.

For these reasons, an investor’s default posture should be to remain fully invested in a well-diversified portfolio designed around their long‑term goals, not headlines. That doesn’t mean ignoring risk. It means acknowledging that consistently betting against markets has historically been far less reliable than participating in their long‑term growth.

Betting on upside, not downside

Importantly, periods of weakness can create opportunity, but often in the opposite direction investors expect. If markets were to fall meaningfully, that may actually be a time to take on risk, not flee from it. Think about the markets during the worst of the Covid crisis. Markets fell sharply, only to go on a multi-year rally. Those that held tight throughout, did very well. Anyone who added risk after significant declines, did even better. In other words, we prefer to take opportunities to invest in upside rather than making bets on timing downside.

Much of this happens quietly through our opportunistic rebalancing approach. As markets move, portfolios naturally drift. Rebalancing allows us to trim assets that have held up relatively well and add to those that have become cheaper, systematically buying low and selling high without trying to predict what comes next. This disciplined process does much of the work without requiring bold tactical calls or emotional decisions.

Periods like these can be uncomfortable. But they are also normal, and often necessary for a well-functioning market. Our focus remains on what we can control: diversification, discipline, and a long‑term plan built to weather uncertainty and capture growth over time.

As always, if you have questions or want to talk through what this means for your portfolio, we’re here.

3.75%

Fed funds rate left on hold

The Fed left rates on hold last week at 3.50-3.75%. Forecasts from the Fed called for one more cut this year, and one next year, with inflation concerns associated with the Middle East conflict cited.

Headline of the Week

The Fed Pauses, Markets Reprice

The Federal Reserve left policy unchanged this week, but uncertainty remains front and center. While the continued pause was widely expected, updated projections and the tone of the discussion reinforced a familiar but uncomfortable reality: inflation remains stubborn, even as parts of the labor market show signs of fatigue.

It was not a shift in policy, but a shift in emphasis. Inflation forecasts edged higher, and policymakers appeared less inclined to tilt toward modest labor market softness. Energy prices, re‑elevated by geopolitical tensions, are back in the conversation in a meaningful way, complicating the narrative that disinflation is on a slow but steady path.

Markets reacted accordingly. Rate‑sensitive assets stumbled as expectations for near‑term easing were pushed further out. Short‑term yields moved higher and equities lost momentum. Even traditional hedges behaved differently than some might expect, with gold declines arguably a large standout.

The Fed did not close the door on eventual easing, but it reinforced that patience cuts both ways. For now, markets appear to be adjusting not to what the Fed did, but to what it is no longer willing to assume. In that sense, this week was less about action and more about recalibration.

The Week Ahead

Heading into the quarter end, we find the economic and news calendar light. Earnings season is behind us and Central Bank meetings too. This leaves macroeconomics standing on its own but clouded by rising energy prices.

Strait Up!

While disruption in the oil infrastructure in the Strait of Hormuz may take a little longer to show in the data, for now we get consumer price index from Japan and the United Kingdom, as well as U.S. import and export price data.

Lagging data will not reflect the impact of the war, but it will put inflation predications in the spotlight and flame inflation anxiety.
The Flash Purchasing Manger Index (PMI) for March will allow investors to dig in on the most recent impact on economic activity, the War. And by extension higher energy prices are weighing on the various regions.
The prices paid component of the PMI will serve up insight into how quickly higher energy costs are being passed on to businesses.
This will be particularly important for Europe, which depends more on oil and gas imports than the U.S.
There is a CERAWeek in Houston this week, labeled as the “Davos of Energy,” which will give a venue for global energy functionaries and CEOs of energy giants Chevron, ExxonMobil, Shell, and Total amongst others to share their views.
Lastly, Friday’s March consumer sentiment index from the University of Michigan should offer some view on U.S. consumer’s reaction to geopolitical developments.

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