Q1 2026 Portfolio Review

During Q1, the Hedge Vision portfolio fell 15.72%. In comparison, the S&P 500 declined 4.54%, while the Nasdaq 100 shed 5.67%.

Total Positions: 27 compared to 25 on December 31, 2025

Top 10 Positions Concentration: 76.9% compared to 78.9% on December 31, 2025

Cash: <0.1% compared to 3.4% on December 31, 2025

2026 has been challenging for many investors, although it ultimately depends on how you view the situation. In my view, Q1 presented the best buying opportunity in several years. I purchased more during Q1 than all of 2025 combined with a focus on software, cloud, and e-commerce. Month-to-date, the portfolio has returned 10.8% as of April 21.

Concerns surrounding the U.S.-Iran war and AI disrupting tech and software companies triggered panic selling among many investors. That impacted my portfolio particularly hard due to its high software exposure.

However, wars have rarely had a lasting impact on the market, while fears of AI leading to lower sales and margins for software companies are completely overblown. AI will definitely impact the industry, although the idea that it will suddenly erode demand doesn’t make much sense when most of these companies are the ones building and monetizing AI in the first place. Indiscriminate selling creates opportunity.

The U.S.-Iran war has resulted in a wave of uncertainty and intimidating headlines, but the market has already priced in that risk and recovered from it. The S&P 500 bottomed on March 30 and has returned 11% since then. That comes despite both sides accusing each other of violating the ceasefire and a failed first round of peace talks.

Meanwhile, Wall Street has continued to lift its S&P 500 earnings growth outlook for 2026, with estimates rising from 14.7% at the end of February to 17.6% today.

The labor market has largely been immune to the effects of the war, with initial jobless claims holding in a tight range since 2022. Consumer spending, which accounts for roughly two-thirds of GDP, has also remained resilient.

However, inflation poses a real issue here and is worth monitoring. Since the start of the war on February 28, traffic through the Strait of Hormuz, which handles roughly 20% of global oil flows, has plummeted by 95%.

The Consumer Price Index (CPI) surged 0.9% month-over-month in March, registering its highest level since June 2022, as prices at the pump skyrocketed. Within the CPI, gas prices surged 21.2%, making up nearly three quarters of the overall monthly increase.

The impact of inflation on the economy hinges on how long Hormuz will remain closed. Even in the event of a reopening, it will take several months for supply to normalize. Still, the economy should be able to absorb a temporary elevation of oil and gas prices given strong employment and spending.

New Positions: ServiceNow (NOW), Fair Isaac (FICO)

Increased Positions: ServiceNow (NOW), Fair Isaac (FICO), MercadoLibre (MELI), Alibaba (BABA), Uber (UBER), Microsoft (MSFT), Zscaler (ZS), Datadog (DDOG), KraneShares CSI China Internet ETF (KWEB)

Exited Positions: None

Reduced Positions: None

My buys and sales in real time, as well as further analysis and commentary, are shared with contributing members on Substack Chat:

As previously stated, Q1 presented a major opportunity to pick up high-quality tech and software names at a discount. Company executives agreed, with insider buying for companies within the State Street Technology ETF (XLK) surging to a 15-year high. Much of the demand was concentrated in software, with insiders from Microsoft, ServiceNow, Salesforce, and Palo Alto Networks snatching up shares during the quarter.

I expect tech stocks to outperform the S&P 500 for the rest of the year. This theme has already materialized, with XLK returning 21% since March 30, outpacing the benchmark index at 11%.

Headlines from the U.S.-Iran war will continue to be at the top of mind for investors. Any resulting dips should be bought, as the worst has already come and gone.

Hedge Vision

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