Q1 was a wild ride, however despite the Iran War our portfolios significantly outperformed.

Although the S&P500 and the aggregate bond markets were down 3.5% and 0.8%, respectively, our portfolios were generally positive and materially better than the benchmarks due to multiple factors:  1) our advance exposure to energy infrastructure, Small Cap and International stocks, which soundly beat the large company indexes;  2) Structured Notes and Options based ETFs performed as they were designed with healthy stock market expected yields but lower than stock market volatility; and 3) Our fixed income portfolios tactically positioned to limit interest rate risk while keeping expected yields higher than the short and intermediate bond index yields.  In summary, diversified portfolios optimized for risk-adjusted expected returns worked well in Q1.

Artificial Intelligence (AI) – Is it the 3rd Industrial Revolution or Even Better?

The Second Industrial revolution started about 10 yrs after the Civil War and culminated with the start of World War I in 1914.  In just 40 years the world went from burning candles in the dark, traveling by horseback, and sending letters via the Pony Express to electricity, the light bulb, railroads, telephones, automobiles and airplanes.  Can you imagine the rate of change?   The benefits were immense, making the quality of life for most of the developed world infinitely better in a short period of time.

Many believe we could be entering a similar era now with the rapid development of AI. While the pace of change and ultimate impact of these technological advances are unknown, we are committed to being alert to the opportunities and leveraging the full benefit for our clients and advisors.  As a firm, we wanted to share some key tenets as we utilize AI tools to bring the best solutions to bear for clients:

1. Innovation: New tools and efficiencies will be created, and we want to be on the cutting edge of innovation to create best in class solutions and strategies for our client’s financial success.
2. Privacy and Protection: We strive to maintain a keen emphasis on protecting client information and data at all times with both software and communications.
3. Maintaining Human Warmth and Compassion: We deeply believe we are living beings created in God’s image to serve each other with warmth and compassion as we go along life’s path.  This looks like real human interactions.  You may get automated reporting, but our hope and plan is you will never get automated answers to real questions, especially in your time of need.  Recently some professional organizations have tried to implement chat bots instead of humans that try to make you think they are real people.  Our commitment is to always prioritize in-person meetings, video conferences, or phone calls over automated responses and chat bot conversations.

As fiduciaries, we are obligated to put your interests first.  We’re incredibly grateful for the opportunity and committed to living up to those standards.

 2026 Tax Planning

Good news, for 23 counties in Tennessee that were impacted by the Ice Storm in January, the IRS granted an extension until May 22nd to complete your taxes without filing an extension.  As always, please let us know if we can assist you or your CPA.  It is a joy to partner with and serve you on your financial journey!

Regards,

Mitch Anderson                                              Destin Tompkins