A Pronounced Lack of Clarity…
April 4, 2026
The markets closed yesterday for Good Friday. Without the distractions of market activity, it would seem to be a good time to think about the investment landscape, possibly gain some useful insights. That, however, is a lot of wishful thinking. Getting meaningful insights at the moment would require interpreting the puzzling, and often contradictory, statements from Trump and his team and the current state of the war. For the time being, the markets’ future course will remain a function of the current hostilities. Every suggestion of a cessation sending averages higher…and every subsequent indication of an increasing likelihood of prolonged conflict leading averages back down. The volatility will continue to be pronounced.
Further complicating matters is the administration’s complete lack of clarity in its statements. Within almost the same paragraph, Trump has suggested that we have achieved our objectives and simultaneously threatened further significant bombing because the Iranians are not agreeing to our terms for a ceasefire.
There seemed to be good reasons to take action against Iran, a terrorist supporter on many fronts, a dangerous wannabe nuclear weapons power. Unfortunately, as noted on the editorial pages of the Wall Street Journal, the administration never made the case to the American people much less to our putative allies that we are now calling on. Instead, it resorted to ‘intemperate, incontinent, infantilizing verbiage’ that is more a sign of frustration and weakness than any true indication of the current state of matters.
I am not a military strategist, nor do I have meaningful insight into what is happening away from the headlines so consider this next bit accordingly. A disturbing case is increasingly being made by experts on Iran and the Middle East that with each day that Iran does not ‘lose’ the war, it is effectively winning the war. It seems apparent that the US/Israeli plan assumed that if Iranian leadership was sufficiently decapitated and its military infrastructure greatly damaged, that the local discontent with the theocracy would result in a popular uprising and a regime change. Think again. That is not happening, certainly not after the demonstrations of popular Iranian discontent in January were met with the widespread slaughter of many thousands of Iranian civilians. There appears to have been no Plan B.
With apologies to The Who…’Meet the new boss, worse than the old boss.’ Apparently, Iran is now in the control of even harder line military leaders. Moreover, their chokehold over the Straits of Hormuz has given them ever increasing leverage the longer the current hostilities continue. The US is correct that European countries have a greater need to see this chokehold relinquished and yet, after Trump consulted with none of them and has repeatedly dissed them in multiple ways, it is not hard to see why Trump finds his sudden entreaties for assistance falling on deaf ears… momentarily anyway. How this resolves in any meaningful way anytime soon is completely unclear.
The implications for investors are numerous. Higher gas prices are just the most visible impact. Secondary impacts – the rising cost of inputs into manufacturing, the diminished spending power for consumers, the increased likelihood of a recession – will take longer to emerge and could be no less harmful. The risks to the downside, for a further decline, are greater and increasing.
That is not a suggestion to engage in widespread selling. Being mostly out of the market means missing days like this past Tuesday when stocks surged higher. Most Wall Street analysts are still optimistic, preferring to look beyond this crisis which they are assuming must resolve reasonably soon. I am less sanguine that matters will resolve soon and satisfactorily. While there will be bargains, maybe more obvious in hindsight, I would not encourage major new investments.
With worldwide indebtedness high and climbing, rates are likely to remain higher and fixed income will be challenged. High quality companies will last and prosper eventually so keep the good ones. Money market funds and short-term Treasury Notes will be the safest alternative in the short run. Higher energy costs, fertilizer costs, other material costs, and extremely high geopolitical tensions argue against speculating. Speculative investments had their time last year; this is not the time for those.
Clearly the world needs some magic to get a better state of affairs. That desire for magic is also apparent locally as there is a surge in interest in magic shows. The link below is an article on this renewed interest in a craft that cuts across all manner of potential divides (old/young, red/blue, etc.). Check it out.
We’re Living in a Golden Age of Close-Up Magic