Q1-2026 Client Commentary

Quarterly Investment Commentary – Q1 2026

Dear Clients and Friends,

The first quarter of 2026 proved to be an eventful period for financial markets. Below is a brief recap.

As is now customary, early January brought the Consumer Electronics Show (CES), where leading technology companies unveil innovations that capture global attention. This year, semiconductor giants—including Nvidia, AMD, Intel, and Qualcomm—once again dominated headlines with advancements in computing power and artificial intelligence. What stood out in 2026, however, was the remarkable progress in robotics, signaling transformative potential across both consumer and industrial applications. These developments contributed to positive market sentiment through the end of January.

February marked the start of corporate earnings season, and market reactions were mixed. While many large companies reported strong results, several also announced increased capital expenditures to fund future growth—particularly in AI and computing infrastructure. Later in the month, geopolitical tensions escalated when the United States and Israel entered into conflict with Iran on February 28. This development pushed oil prices higher and placed downward pressure on most non-energy equities for the remainder of the quarter.

As portfolio managers and stewards of your assets, we continue to identify opportunities in this environment, focusing on high-quality companies that are executing their strategies effectively. For investors with new capital to deploy—particularly within Roth IRAs—we believe the current market presents attractive entry points.

We are carefully monitoring two areas of concern: oil and private credit and two areas of opportunity: aircraft maintenance and technology.

Oil Market

The conflict has introduced a potential long-term risk premium in oil prices, even if hostilities subside. Rising energy costs act as a regressive burden, disproportionately affecting working-class households. For context, federal excise taxes currently amount to 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel, with Wisconsin adding an additional 30.9 cents per gallon.

That said, as a large domestic oil producer with a service-driven economy, the United States is less exposed to these pressures than in the past. Non-energy-producing regions—particularly in Europe and Asia—are more significantly affected and may face near-term economic strain while accelerating investment in renewable energy.

One potential downstream effect is reduced foreign demand for U.S. Treasuries, as oil-importing nations allocate more capital toward energy procurement. Additionally, global oil transportation dynamics introduce delays: tankers typically travel at only 10–12 knots (roughly the speed of a bicycle), meaning shipments dispatched prior to the conflict may not arrive at U.S. Gulf Coast ports until mid-April.

Private Credit Market

We are also monitoring elevated redemption activity in the private credit sector. In recent years, many financial planning clients were allocated to complex alternative products without a full understanding of the underlying risks. This reinforces the importance of working with knowledgeable professionals who rigorously evaluate investments, understand portfolio holdings in detail, and ensure alignment with client objectives. Knowing what you own is a very big deal.

If a financial planner gave you exposure to illiquid private credit and you would like a second opinion, we welcome the opportunity to review your portfolio with you.

Aircraft Maintenance

We are currently seeing compelling opportunities in commercial aircraft service and maintenance. Market conditions have become unusually tight, with even serviceable aircraft—such as flight worthy Boeing 727s that could still fly you around, being dismantled for spare parts due to significant supply shortages.

Technology

We are often asked whether we are in an AI bubble. Our view is that while periods of overvaluation may occur, the broader trend is not a temporary phenomenon. Artificial intelligence is driving productivity gains across industries, and innovation continues at a rapid pace. Advancements in semiconductor technology, quantum computing, and supporting infrastructure, including power generation, represent a long-term secular growth trend.

We remain grateful for the trust you place in us and are committed to the thoughtful stewardship of your assets. We sincerely thank our clients, shareholders, and advocates for referring friends and family—a compliment we hold in the highest regard.

If your circumstances or objectives change, or if you would like to revisit your strategy as the year progresses, we welcome that conversation.

Thank you for your continued confidence. We look forward to navigating the opportunities ahead together.

Sincerely,

The information presented in this newsletter is the opinion of Wisconsin Capital Management, LLC and does not reflect the view of any other person or entity.  The information provided is believed to be from reliable sources, but no liability is accepted for any inaccuracies.  This is for information purposes and should not be construed as an investment recommendation.

 Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.

 Opinions expressed are those of the author and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Past performance is not indicative of future performance, and all investments are subject to risk of loss. See Wisconsin Capital Management’s Form ADV Part 2A and Form CRS at https://www.wiscap.com/ for additional information about our business practices and conflicts identified.

Advisory services offered through Wisconsin Capital Management, LLC, an Investment Advisor registered with the U.S. Securities & Exchange Commission.

All registered investment advisers have the same fiduciary duty as Wisconsin Capital Management, LLC.