Temperament Trumps IQ: Lessons from a Volatile Market

To the Clients of Resilient Asset Management:

Greetings from World HQ in Memphis. I trust all of you had a Happy Easter with friends and family. The candy was flowing in Memphis (and that other gem of a city Little Rock) for sure.

On a bit more somber note, the tax filing deadline is approaching. If you have any last minute questions about your own return, please contact me soonest. Otherwise, please ensure your returns are filed on-time and with all the necessary administrative items complete.

Wow, world events certainly dominate the news these days - and the cycle is so short it makes my head spin just reading the headlines.

A brief timeout to commend our Armed Forces. As a Fighter Pilot (it's true, I have the mistakenly evaluated landing grades to prove it), ejecting over enemy territory is truly a harrowing scenario for sure. Seeing all our aircrew return home is a testament to our entire Armed Forces team. I followed that situation closely and was elated to learn all returned home safely.

Not surprisingly, the same theater of operations had all investors' attention as well.

As I am revising this letter, we have just completed the first day of the cease fire and the equity markets reacted similarly to when the tariffs were suspended - powerfully up. All of this has resulted in a very flat S&P 500 for the year thus far.

On that, if you recall a few years back, S&P 500 investing was all the rage. The "Mag 7" propelled markets ever higher leaving investments of almost any other stripe in its wake.

Well, 2025 was the year that thesis turned. One of the core international holdings in Client portfolios - the Dimensional International Value ETF (DFIV) - was one of many international standouts last year, here are the specifics for 2025:

VOO (S&P 500 ETF): +17.82%

DFIV: +45.34%

For 2026, the saga continues...year to date performance (As of 4/8/26) for the same ETFs is as follows:

VOO (S&P 500 ETF): -0.92%

DFIV: +10.34%

Note: Past Performance guarantees nothing about future performance

I share this with you not to brag....trust me, it took more than a little fortitude to stick with the international thesis at times. Rather, I point this out to emphasize that capital markets are tricky beasts. And what works today may be way out of favor tomorrow. Diversification - sensibly done - is an investor's friend. What's also important is having the fortitude to stay with your investment plan through thick and thin. Temperament trumps IQ in capital market investing for sure.

The last year or so has afforded ample opportunity to succumb to market-wide fears - tariffs and the Iranian War being the primary examples. Looking back, it is much easier now to see that tariffs had a much more muted impact than predicted. Of course, it wasn't so easy to see that at the time. The lasting impact of the war in Iran remains very much in question, though today's market activity suggests hostilities may end soon at least.

Putting all this into perspective, my suggestion to you is to not be reactive to any market activity, or even worse, to world events. Making "macro" calls is a fool's errand for the vast majority of us, myself included. Putting one's faith in capital markets and riding the wave, circuitous as it may seem at times, affords the investor a superior chance at a satisfactory result.

Giving in to fuzzy thinking, the latest fad, or market pundits who never seem to publish the contents of their own portfolios (or their performance) typically leads to disappointing long-term results. Keep it simple...the best investment stories are usually remarkably terse. For example, "I bought an iPod, loved it, and then bought Apple stock"....I have yet to hear an equivalent story about an esoteric macro insight that bore similar fruit over the long term. If you have one, please share it.

My general guidance to everyone remains the same - control what you control. Worrying about things you cannot influence is remarkably unproductive, and even worse, stress-inducing.

As always, if your circumstances have changed and you'd like to discuss them, please contact us to set up an appointment — the door is always open.

Thank you for your continued trust in Resilient Asset Management...I look forward to writing to you again next quarter.

All the best,

Christopher Flis, CFP®

President

Resilient Asset Management