The Brew: Navigating Volatility and Geopolitical Headwinds

Brew

| Mar 2026

NAVIGATING VOLATILITY AND GEOPOLITICAL HEADWINDS

The start of 2026 has brought a mix of robust economic growth and renewed geopolitical tension. Last year’s rally was famously narrow, driven by the “Magnificent 7.” This year, we are seeing a healthy broadening of growth. Manufacturing sentiment is rising and jobless claims remain low. Despite the S&P 500 being essentially flat YTD, the underlying resilience of the US economy remains a key takeaway.

Keep Perspective During Conflicts

While the conflict in Iran is a sobering development, it is important to maintain perspective on how markets historically digest such events. Fortunately, past US-involved conflicts haven’t come at the expense of patient investors. The table below shows every armed conflict the US has participated in since the Vietnam War. We also include the forward return for the S&P 500, and the change in the 10-year yield. On average, the S&P 500 was up 12.8% in the 12 months after conflict broke out (better than long-term averages), and the 10-year yield was higher by 2bps. Crude Oil recently broke above $100/barrel as the Strait of Hormuz faced disruptions. While high energy prices can put pressure on risk assets, the duration and market impact of geopolitical events remain uncertain.

Portfolio Strategy in 2026

The Mid-Term Cycle: Keep in mind that mid-term years tend to see more modest returns for the S&P 500, particularly in the first half of the year. Historically, market behavior around election cycles has varied. While some periods have shown stronger performance later in the year, past patterns are not a guarantee of future market results (see chart below).

The Bottom Line

While headlines are heavy, your diversified portfolio is designed to mitigate these rotations. Our team continues to monitor labor, credit, and other economic indicators. Market conditions can change quickly, and periods of weakness may occur. We continue to monitor economic and market developments closely as part of our ongoing investment process. If you have questions about how current market conditions may affect your portfolio, please contact your advisor.

MARKET BACKDROP

ASSET CLASS SUMMARY
As of 03/18/2026

Asset Class	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
U.S. Stock	-3.81%	-1.90%	-2.76%	+19.34%	+20.29%	+11.38%	+13.93%
Global Ex U.S.	-4.76%	+5.99%	+3.96%	+26.65%	+18.86%	+8.17%	+9.42%
U.S. Bond	-1.11%	+0.07%	+0.04%	+4.91%	+3.68%	+0.39%	+1.77%
Global Bond	-2.09%	-0.35%	-0.50%	+4.85%	+2.91%	-1.45%	+0.68%
U.S. Real Estate	-2.68%	+4.56%	+3.89%	+4.47%	+9.71%	+4.42%	+5.89%

SECTOR SUMMARY
As of 03/18/2026

Cyclical	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Consumer Cyclical	-4.08%	-9.51%	-7.92%	+15.79%	+18.23%	+6.95%	+12.22%
Financials	-6.88%	-9.87%	-10.56%	+1.32%	+18.52%	+9.13%	+12.39%
Materials	-8.55%	+7.35%	+6.27%	+13.64%	+10.78%	+6.42%	+10.08%
Real Estate¹	-2.83%	+5.73%	+4.95%	+5.01%	+9.28%	+5.25%	+6.67%

Sensitive	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Comm. Services	+0.36%	-0.51%	-2.32%	+37.58%	+35.39%	+14.07%	+12.24%
Energy	+6.50%	+33.92%	+30.82%	+33.19%	+19.12%	+23.76%	+10.58%
Industrials	-5.63%	+7.30%	+6.53%	+27.05%	+21.50%	+12.99%	+13.17%
Technology	-2.90%	-4.19%	-6.30%	+30.10%	+29.50%	+19.42%	+23.40%

Defensive	1 Month	3 Month	YTD	1 Year	3 Year	5 Year	10 Year
Consumer Defensive	-5.42%	+6.21%	+7.35%	+9.18%	+9.98%	+9.27%	+8.42%
Health Care	-6.66%	-3.93%	-4.89%	+2.04%	+7.20%	+6.91%	+10.12%
Utilities	+2.51%	+9.05%	+9.53%	+22.26%	+15.36%	+11.99%	+10.23%

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Consumer Cyclical (S&P 500 Consumer Discretionary (Sector) Total Return), Financials (S&P 500 Financials (Sector) Total Return), Materials (S&P 500 Materials (Sector) Total Return), Real Estate (S&P 500 Real Estate (Sector) Total Return¹), Comm. Services (S&P 500 Communication Services (Sector) Total Return), Energy (S&P 500 Energy (Sector) Total Return), Industrials (S&P 500 Industrials (Sector) Total Return), Technology (S&P 500 Information Technology (Sector) Total Return), Consumer Defensive (S&P 500 Consumer Staples (Sector) Total Return), Health Care (S&P 500 Health Care (Sector) Total Return), Utilities (S&P 500 Utilities (Sector) Total Return).

1) The index Launch Date is Sep 19, 2016. All information for an index prior to its Launch Date is hypothetical back-tested, not actual performance, based on the index methodology in effect on the Launch Date. Back-tested performance reflects application of an index methodology and selection of index constituents with the benefit of hindsight and knowledge of factors that may have positively affected its performance, cannot account for all financial risk that may affect results and may be considered to reflect survivor/look ahead bias. Actual returns may differ significantly from, and be lower than, back-tested returns. Past performance is not an indication or guarantee of future results. This back-tested data may have been created using a “Backward Data Assumption”. For more information on “Backward Data Assumption” and back-testing in general, please see the Performance Disclosure.

This article is for informational purposes only and is not intended as individual investment advice or as a recommendation of any particular security, strategy or investment product. Investing involves risk including the potential loss of principal. SEIA is not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas. Past performance is not indicative of future results. Signature Investment Advisors, LLC (SIA) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Securities offered through Signature Estate Securities, LLC member FINRA/SIPC. Investment advisory services offered through SIA, LLC, 2121 Avenue of the Stars, Suite 1600, Los Angeles, CA 90067, (310) 712-2323. The information provided in this article is for general informational purposes only and does not constitute professional advice. Individual results may vary, and it is important to consult with a qualified professional before making any financial or legal decisions. For details on the professional designations displayed herein, including descriptions, minimum requirements, and ongoing education requirements, please visit seia.com/disclosures. SIA does not accept time-sensitive, action‐oriented messages or transaction orders, including orders to purchase or sell securities, via electronic mail.

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