Rise Advisors Market Update March 2026

Transcript Below 

Hi everybody, this is Zach Harrington from Rise Advisors. And on behalf of all of us here at Rise Advisors, I want to thank you for taking the moment to watch our market update for what is March of 2026. As we sit here in mid-March of 2026, the world is perceived to have tipped over on its head. Last time we recorded, 24 hours later, US invades Iran and things have been tumultuous ever since. So we're dealing with war we're dealing with stagflation concerns as oil prices sky skyrocket, we're dealing with tariffs. Are they legal? Are they illegal? What motives or what's going to take place when it comes to tariff law moving forward? And then from a geopolitical standpoint, there seems to be a lot of unrest that isn't necessarily getting clarified. If you had just looked at all of those factors in a vacuum, you would think the markets have corrected massively.

As of the time of this recording, you're looking at a market that is down year to date on an equal weight basis, little under 3% with dividends reinvested. Today in the market on Monday, March 16th you have a really positive up day and so it's just a really important reminder to block out the noise. That's a consistent theme that we talk about. When you look at this year so far, that's 2026, the defensive sectors that performed really well. So energy's leading the charge on a year to date basis up over 28%, followed by consumer staples, utilities, materials, industrials. A lot of these kind of names have rotated into favor and tech has rotated out of favor over the last six months or so. With that, I think it's an interesting thing that shifted when it comes to energy markets specifically.

So energy has dominated over the last four months, like I said, up close to 30% during that time period and up until the last couple of weeks. One of the concerning things when it came to the energy sector was the only industry in the S&P 500 where you had earnings contraction. There wasn't actually growth of earnings. I say this kind of tongue in cheek, but one of the things that really helps earnings growth is oil being at a hundred dollars a barrel. So some of those concerns over profitability and earnings contraction in the energy space have kind of gone to the wayside here, at least temporarily. One of the important things with this, and we talked about this a little bit in a previous video, is the importance of not going chasing. So one of the consistent themes throughout the fourth quarter in the start of 2026 was this whole equal weight versus market cap weighted when it came to the stock market.

So, if you look at the S&P 500, you have an index that is market cap weighted. So you take the 500 largest companies, you take them and basically rank them by market cap as what their weighting is, in the index itself, if you looked at things on an equal weight basis versus a market cap weight basis of taking each company equally versus market cap. About four to six weeks ago you had this theme that equal weight was kicking market cap weight, butt. How quickly has the tide turned on that? So this is through what is Friday the 13th of March, market close. You have a equal cap that basically for the month is down 5.6, the market cap weight, it's down 3.5 and those returns are starting to tighten down. So if you went chasing and wanted to get more widespread when it came to an equal cap weighted, you probably got your butt kicked over the last four to six weeks.

So once again, just be consistent and remain basically convicted in whatever you do own. Don't go chasing returns at this point. One of the other things I think is interesting, and we were on a call myself and our advisor team, and my partners were on a call with Janice Henderson about two or three weeks ago, and they had this really interesting chart that you're going to see up here to the right hand side. And what this does is it takes a look at the major indices globally, including the US, Europe, Asia, things like that. And it basically looks at what drove performance in 2025. And one of the things we hear a lot from clients is, oh, I have concerns over valuations. I have concerns over the market, and the market keeps going higher. If you look at what drove in contributed to total returns in 2025 in the US market, so we're looking at the Nasdaq, the S&P, the Russells, almost a very significant portion of the growth was actually earnings growth.

And so, earnings growing and sales growing are what drove the performance in 2025. And when you look abroad where those markets had performed pretty decently in 2025, a lot of that performance was actually driven by valuation, stretching and things becoming more expensive. Keep in mind that you have a market that yes, it's 5% or so off the all time highs, 3% down year to date. Yes, there's all of this uncertainty, but you do have a market that is objectively healthier as long as the earnings keep coming in the way they have.

One of the other things I wanted to talk through was the oil market broadly. So ever since the US invaded Iran, you've seen shocks to oil prices, which has stoked these stagflation concerns, stagnant growth, persistent inflation and oil driving, you know, some of that risk. One of the things that I thought was really interesting is there's this great chart deck that I follow and get emails from. So it's this account called Chart Kit Matt, and you'll see a copy of the chart right here. And so what this chart shows is the S&P 500 performance after two big updates for crude. So right after the US invades Iran, you have these massive spikes in oil prices. And so in my lifetime, so going back to 1990, you've had now 13 instances of these occurrences. Once again, the charts right here. What I found fascinating that is of those instances in the 12 months following that oil shock, what would be perceived as a bearish thing. Oil prices are going up, gas prices are going up, consumers are spending less and less on other things because their core needs are not being met. The market was up on average 21.9% in the 12 months following an oil shock like that. The other thing that's interesting is it has an 83% win rate, meaning that 83% of those occurrences in the 12 month period following the market was higher.

Now, there are two really unique outliers that I think are worth noting. The first is 2008. So the oil shock took place September of 2008, this is post 9/11. This is going into the global financial crisis. There's a lot of issues with that one. But even then, in the 12 months following the September of 08’ oil shock, the market was only down 11%, 12 months following. The other was in March of 2022 where the market was down 9% in the 12 months following. But keep in mind that was coinciding with Russia invading Ukraine and one of the most aggressive rate hiking environments that we've experienced. The vast majority of these other instances are positive and positive, very, very highly. You can't be panicking and making rush decisions.

One of the other charts I wanted to show was just kind of how oil futures are moving. So if you looked at, and it'll show you basically on the chart where things sit today as far as expectations as of March 16th, one week into the war and before the war, you can see that the futures curve was flat to negative prior to the invasion. They moved up aggressively on the shorter part of the curve and the expectation was that a lot of this was going to settle out during the fourth quarter. Basically, the shock to supply would normalize and kind of move forward. The future's market is at least telling us that the market is starting to prepare for these prices to be higher for longer and this conflict to drag on. So it's definitely something we're keeping an eye on, is the market has remained stable and resilient, but if the expectation is that these prices are going to push higher, the likelihood of the Fed cutting rates regardless of who's in charge is probably going to go away in 2026. And there's definitely some things you'll want to consider when it comes to your allocation.

On that note things that we're looking at and likely to do in the coming month have nothing really to do with the Iran conflict or oil prices or things like that. We're looking beyond that at this point. And so one of the things we've been working on internally at Rise is basically thinking through those secondary and tertiary bounces of the AI trade. So you had the AI infrastructure and build out the CapEx, spending, the hyperscalers, all of those things you've heard me talk about at nauseum. We already own healthcare exposure because we expect that that industry is going to benefit from AI efficiencies and we're looking more broadly now. And so we are going to be increasing our small and mid-cap exposure with the expectation that as interest rates gradually move lower, small and mid-cap companies who don't have the access to the level of kind of corporate financing large cap companies do will benefit, but also smaller and mid-sized companies can become more profitable implementing AI efficiencies.

So anybody who's played around with some of these AI agent tools and things like that, they're only going to get better and the expectation that should drive better profitability for small to mid-cap companies. So we're going to look to increase our exposure there. Once again, these portfolio changes have nothing to do with Iran or geopolitics, it's just a further look down the road. The other thing we're going to be looking to do is increasing yield. So as kind of rates gradually push lower and yields become less and less abundant, we're looking at ways that we can increase that yield. And so we have some things that we'll be implementing that will bring more securitized assets into the portfolio. So with that, we're taking on more securitized debt, a little bit shorter duration, but a little bit higher yield given the nature of the products.

So, we'll be looking to make those changes in the next month or so. We're just waiting for opportunities to present themselves from a rebalancing standpoint. So with that being said, our takeaway here in March of 2026 is just be patient. Let things sort themselves out, and don't go chasing any sort of returns based on what you think is going to happen. Have conviction in your allocation, remain invested and let time sort itself out. As always, if you have any questions about what's taking place in markets or what's going on in your portfolio, don't hesitate to reach out to myself or any of us here at Rise Advisors. Thank you for watching and have a wonderful day.