Q1 2026 Webinar: Volatility, Trade Policy, and What It Means for Long-Term Investors
The first quarter of 2025 served as a reminder that markets do not move in straight lines. Following the 2024 election, global trade policy quickly became a central focus for investors, leading to heightened volatility and sharp short-term market movements.
In our First Quarter 2026 Client Webinar, we discussed what happened, why it mattered, and how disciplined investors can navigate uncertainty while staying focused on long-term goals.
Below are the key takeaways from the discussion.
Trade Policy Shocks and Market Volatility
Entering the quarter, markets were preparing for a moderate shift toward protectionist trade policies. Expectations centered on tariffs in the range of 10 to 15 percent, levels that investors believed markets could absorb.
Those assumptions changed abruptly in early April when reciprocal tariffs tied to trade deficit figures were announced at levels far above expectations. The announcement triggered a rapid market reaction.
Equity markets declined 5 to 6 percent almost immediately, followed by double-digit losses within days. By the end of the week, markets briefly entered intraday bear market territory, representing a sharp pullback from February highs.
This episode highlights how markets often respond not just to policy changes themselves, but to surprises relative to expectations.
Bonds Are Reclaiming Their Role as a Diversifier
One of the most important themes discussed in the webinar was the evolving relationship between stocks and bonds.
In recent years, rising interest rates caused stocks and bonds to move more closely together, reducing the diversification benefits many investors relied on. In 2022, losses occurred on both sides of portfolios at the same time, limiting diversification when it was needed most.
That dynamic has shifted.
Correlations between stocks and bonds have declined meaningfully. Bonds have once again begun to play their traditional role as a stabilizing force within portfolios.
With yields at current levels, bonds are no longer simply a place to hold cash. They are contributing to total return while helping offset equity volatility during periods of market stress.
Why We Use Conservative Return Assumptions
Over the past decade, the S&P 500 has delivered an annualized return of approximately 12.8 percent. Historically, that level of performance ranks in the 93rd percentile of all rolling 10-year periods dating back to 1935.
While those returns have been exceptional, history shows that periods of unusually strong performance are often followed by more moderate outcomes.
This does not mean negative returns. Rather, it reflects the market’s tendency to balance itself over time.
This pattern is often driven by recency bias, the natural tendency to expect future returns to resemble recent experience. To avoid that trap, our financial planning process is grounded in long-term historical averages rather than recent market outliers.
By planning for more modest returns, we aim to help ensure financial plans remain resilient across a wide range of market conditions.
The Long-Term Investor Advantage
Market volatility is not a flaw in the investing process. It is the price investors pay for long-term growth.
Short-term declines, unsettling headlines, and unexpected events are an inevitable part of investing. The most successful investors are not those who attempt to time the market, but those who remain disciplined and allow time and compounding to work in their favor.
Our goal is to help clients stay focused through today’s noise so they can benefit from tomorrow’s opportunities.
Watch the Full Q1 2026 Client Webinar
If you would like a deeper dive into the charts, data, and discussion behind this update, we invite you to watch the full First Quarter 2026 Client Webinar.
Please reach out if you have questions or would like us to share any of the charts discussed during the presentation.
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