Savvy Portfolio Perspectives | March 2026

Market views and portfolio insights from Savvy Wealth Investment Management

Executive Snapshot

The Verdict

This month, we implemented one tactical refinement inside U.S. Large Cap equities: we reallocated 25% of our S&P 500 exposure to the S&P 500 Equal Weight Index (RSP). Outside of that change, we reaffirmed our broader portfolio stance. (Equities remain the primary opportunity set in our view, while fixed income still offers a less attractive risk-reward tradeoff at current yields and spreads.)

Core Driver

We continue to see a market that is demanding broader participation and higher-quality earnings delivery. Q4 earnings results remain constructive – 73% of S&P 500 companies have reported positive EPS surprises – but markets are simultaneously grappling with valuation sensitivity, rate volatility, and fast-moving geopolitical headlines.

Geopolitics update: Iran escalation and the new energy shock

Over the past 48 hours, the Iran conflict has deteriorated materially, with markets now reacting less to “headline risk” and more to a potential energy supply shock. Oil prices have spiked above $100 per barrel, with reports of disruptions across key regional export routes and infrastructure.

At this stage, the key transmission channel remains energy: if oil stays elevated, the impact can extend beyond short-term volatility into inflation expectations, central bank policy, and financial conditions. The most important swing factor is the duration and scope of the disruption, including constraints on flows through the Strait of Hormuz and knock-on effects to regional production and exports.

While markets are repricing risk quickly, our framework stays the same; we focus on the variables that can change the investing backdrop (energy, inflation, policy, credit).

Portfolio Stance

• Overweight Equities, with a continued emphasis on U.S. Large Cap exposure and Emerging Markets as a diversification complement.
• Underweight Fixed Income, with a preference for higher-quality, shorter-to-intermediate duration exposures.
• Within U.S. Large Cap, we are now pairing market-cap weight (S&P 500) with equal-weight (RSP) to reduce concentration risk and increase breadth exposure.

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Macro Thoughts

Why we added Equal Weight exposure (RSP) inside U.S. Large Cap

Over the past few years, the S&P 500 has become historically concentrated. When a small group of mega-cap stocks drive an outsized share of index returns, headline index performance can mask what is happening underneath the surface. Adding equal-weight exposure is our way of expressing a simple view:

• We want to keep exposure to high-quality U.S. franchises, but
• We also want to participate if leadership broadens beyond the largest names.

This matters because, so far this year, market performance has shown signs of broader participation: multiple sources have highlighted that equal-weight performance has outpaced cap-weighted performance in 2026 to date.

The Software “watch list” (and what we’re monitoring)

We are not making a new sector call this month, but we are actively monitoring the Software segment of Technology as investor narratives around AI evolve. Recent market action has reinforced that even large, entrenched enterprise software providers have not been immune to the market repricing the potential impact of AI on their business models, and that even strong prints can be met with skepticism when investors are debating durability of pricing power, seat expansion, and the capex-heavy path to AI monetization.

What would get our attention (and what it could mean for positioning):

• Earnings revisions trend (not one-off guidance). A sustained downgrade cycle would increase the case for trimming software exposure via a reduction to our Tech overweight.
• Enterprise AI spending mix. If spend shifts meaningfully from build-out to optimization faster than expected, that would be a headwind for growth expectations and would also argue for reducing exposure.
• Financial conditions. A clear tightening that pressures long-duration cash flows would likely reinforce a more defensive posture in software-heavy exposures.

On the other hand, we would consider moving overweight Software if:

• Valuations reset to compelling levels relative to the sector’s own history and to broader equities, and we see stabilization in forward expectations.
• Fundamentals remain intact (revenue durability, renewal rates, and margin discipline) even as the market reprices AI-related competitive risk.
• We begin to see evidence that incumbents are integrating AI in a monetizable way (AI-enabled tier adoption, successful price/packaging changes, and customer ROI) that protects their core franchises and supports durable earnings growth.
• Market internals improve (breadth and relative performance stabilize), suggesting the selloff has shifted from “repricing” to “overshoot.”

Geopolitics: what we’re watching next‍

We laid out our core framework in the Executive Snapshot. At this point, the goal is to monitor whether the current episode becomes a persistent energy shock that changes inflation and policy expectations.

What we’re watching most closely (next 1–3 weeks):

• Oil persistence: whether prices remain elevated long enough to influence inflation expectations and policy pricing.
• Flow constraints through Hormuz: any sustained disruption that materially reduces exports/transits.
• Real supply loss vs. rerouting: evidence that production/export reductions are persistent (not just logistics delays).
• Policy response: steps to stabilize supply or mitigate the inflation impulse (e.g., SPR releases).
• Financial conditions: whether credit spreads and rate volatility begin to tighten conditions enough to matter for risk assets.

For the time being, we are treating this episode as a potential volatility catalyst that can change short-term market pricing, but not necessarily the medium-term fundamental trajectory unless it materially affects energy, inflation, or credit.

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The Savvy Macro Dashboard

Data as of March 6, 2026 unless otherwise noted.

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Current Portfolio Positioning

Question(s) of the Month

Question 1: “Why did Savvy shift part of the S&P 500 exposure into Equal Weight?”

Traditionally, owning the S&P 500 means owning a market-cap-weighted index, where the largest companies can dominate performance. We made this change for three reasons:

1. Concentration risk is real. When the top holdings become too large, index returns can become overly dependent on a small set of outcomes.
2. Breadth can matter more than headlines. Equal weight tilts toward the “average stock” and tends to benefit when leadership broadens.
3. It’s a balanced expression, not a regime bet. We kept meaningful S&P 500 exposure, and added RSP as a complement.

Question 2: “Should we change portfolios because of the Iran war?”

We have not changed our portfolio positioning in response to the Iran war. Historically, geopolitical events have tended to create volatility more than lasting structural change in markets. Our approach is to stay disciplined and focus on the variables that can truly change the investing backdrop, namely whether the conflict meaningfully disrupts energy supply routes, keeps oil prices elevated for an extended period, and influences inflation and the path of monetary policy. For now, it warrants monitoring, and we remain anchored to fundamentals and disciplined implementation.

Savvy Total Portfolios: Tactical Asset Allocation Positioning

(Views unchanged this month outside of the S&P 500 → RSP rebalance within U.S. Large Cap.)

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Risks We’re Watching

1. Energy-driven inflation persistence (now the central risk)‍

With oil spiking to multi-year highs, the risk is a sustained energy impulse feeding into inflation expectations and delaying the path to easier policy. If the shock is prolonged, higher energy costs can act like a tax on consumers and businesses, which raises downside growth risk and can increase recession odds at the margin.

2. Supply-route disruption and conflict scope (second-order effects)‍

Markets typically respond more to prolonged disruptions than to the initial shock. Key risks we are monitoring include sustained disruption to energy supply routes (particularly shipping through the Strait of Hormuz), broader regional escalation, and knock-on impacts to production and exports across key suppliers.‍

3. Rates volatility and tightening financial conditions‍

A persistent oil shock increases the odds of higher-for-longer rate pricing, which can spill into equities (particularly long-duration segments) and pressure bonds simultaneously.

4. Narrative risk in Technology, especially Software‍

Given the market’s sensitivity to AI expectations, we are monitoring whether concerns translate into a sustained deterioration in earnings revisions or a tightening in financial conditions that pressures long-duration cash flows.
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Closing Thoughts

This month’s portfolio action was deliberately surgical: we did not shift our overall risk stance, but we did improve how we are expressing our U.S. Large Cap exposure by adding equal-weight breadth. With the geopolitical backdrop deteriorating, we expect volatility to remain elevated. Our goal remains the same: stay disciplined, stay diversified, and adjust portfolios when fundamentals, not headlines, call for it.