IFS Insights – March
Market Outlook and Global Events
Frequently Asked Questions
Update from the IFS Team
Dear Friends,
We are closely monitoring the escalating conflict in the Middle East following recent military developments involving the U.S., Israel, and Iran. We offer some thoughts and perspective below, but first, we want to acknowledge the human toll that any war involves. We hope and pray for peace as quickly as possible.
While we recognize the fear present during times like this, and understand that these types of events introduce near-term uncertainty, our focus remains on long-term investing.
Market Outlook
- Geopolitical Conflict: The US is currently targeting the Iranian military and nuclear infrastructure. While military operations may persist for another 4–5 weeks (or longer), the military capabilities of the US and its Gulf allies serve as a significant stabilizer for the region’s long-term trajectory.
- Labor Market Softening: This morning’s Jobs Report showed an unexpected loss of 92,000 jobs in February, with the unemployment rate rising to 4.4%. This cooling in the labor market, while concerning at face value, may prompt a more accommodative stance from the Federal Reserve, potentially providing a tailwind for diversified portfolios.
- Energy & Growth: We anticipate near-term oil volatility, with potential upside of $5–$10. However, structural growth remains robust—driven by AI-related infrastructure and a broadening global economy that we believe can withstand these temporary “cost-driven” pressures.
Our Response
In periods of heightened tension, we lean into our core philosophy to protect and grow your assets. Our strategy is built on the following pillars:
- Diversification: We maintain portfolios diversified across geographies, sectors, and industries. This is designed to take part in whatever is performing well globally.
- Rebalancing: We rebalance the accounts we manage to take advantage of price swings by buying when prices are low and selling when prices rise.
As always, we are available if you have any additional questions at this time, and thank you for the privilege of partnering with you on your financial journey!
The IFS Team
Frequently Asked Questions
What happens if oil prices stay above $100? Should sustained disruptions occur, we could see prices test the $100 mark. Historically, such spikes act as a “tax” on consumers, which can dent GDP growth. However, we anticipate that central banks and policymakers would likely respond by providing targeted stimulus to offset a one-time, cost-driven inflationary shock rather than tightening into a slowdown.
Is my portfolio at risk if one specific sector or region is hit hard? This is why we maintain a globally diversified approach. By spreading investments across various geographies, industries, and sectors (such as Technology, Healthcare, and Industrials), we ensure that a downturn in one area—like oil-sensitive manufacturing—is balanced by areas that may benefit or remain neutral, such as Energy producers or defensive staples.
Why are we rebalancing now instead of moving to cash? Moving to cash often results in missing the “recovery bounce” that typically follows geopolitical shocks. Instead, we use disciplined rebalancing to sell assets that have risen in price and reinvest in areas that haven’t grown as much. This ensures we are always positioned to participate in the next growth cycle.
Does IFS see a risk of a wider global recession? While the risks of a regional war have increased, the underlying global economy remains resilient. Strong investment in AI infrastructure and a steadying, mature company spending cycle continue to provide a meaningful floor for growth. We view the current situation as a volatility event rather than a fundamental shift in the global expansion.
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