Disruptive Stocks Strategy @II-Disruptive: "@II-Disruptive Portfolio Review –..."

Smart Portfolio

@II-Disruptive Portfolio Review – Market Volatility Persists The market environment remains highly volatile. Our II-Disruptive portfolio is down 6.8% year-to-date, while the Nasdaq 100 has declined 15.6% over the same period. We have adjusted the portfolio to be more resilient in a trade war–driven market. However, we cannot entirely eliminate the volatility stemming from the ongoing tensions, as our strategy is focused on technology stocks. These are inherently cyclical and tend to experience above-average price swings in turbulent market conditions. That said, we believe that technology stocks are better positioned to navigate the current trade war environment than traditional cyclical sectors such as materials, industrials, and energy. Notably, many services and software companies remain largely outside the scope of tariffs, giving them a relative advantage. Equity Market Volatility Continues Markets rallied sharply on Wednesday after President Trump announced a 90-day freeze on planned tariff increases for countries that have not retaliated against the original U.S. trade tariffs. Indexes recorded historic one-day gains, driven by several factors: - Reprieve from recession fears: The tariff freeze temporarily removed the imminent threat of a recession, prompting a market repricing. - Short covering: Many investors were forced to close short positions, further fueling the rally. - Surprise factor: The announcement caught markets off guard, amplifying the positive reaction. However, the U.S.–China trade war continues unabated, and the 90-day freeze with other countries remains only a temporary solution. Markets remain uneasy with President Trump’s unpredictable policy shifts, which continue to foster uncertainty. This uncertainty, in turn, elevates risk aversion, which is bad for the stocks. This was evident on Thursday, when stocks pulled back again. We anticipate that volatility will remain elevated in the weeks and months ahead. The upcoming earnings season will provide crucial insights for investors. The focus will not be so much on the reported numbers — unless they disappoint — but rather on management outlooks and commentary regarding the trade war's impact. Additionally, megacap tech companies' AI investments are under close scrutiny. Our largest portfolio positions currently include: $MSFT (Microsoft) $NOW (ServiceNow Inc) $AAPL (Apple) $GOOG (Alphabet) $AMZN (Amazon.com Inc) $CHKP (Check Point Software Technologies)