Experience is simply the name we give our mistakes

“Experience is simply the name we give our mistakes”

–Oscar Wilde

The first quarter of 2026 was a reminder that markets rarely move in a straight line. The year began with investors balancing solid underlying corporate earnings against a growing list of macroeconomic concerns. Trade policy uncertainty resurfaced early in the quarter, inflation remained somewhat elevated, and the Federal Reserve chose to keep interest rates unchanged as it waited for clearer evidence that price pressures were moving lower. At the same time, enthusiasm around artificial intelligence and data center spending, which drove so much of the market’s advance in 2025, became more selective as investors reassessed valuations and the timing of returns on the enormous capital being committed across the technology ecosystem.

As the quarter progressed, volatility increased. Markets were unsettled by renewed tariff uncertainty, concerns about whether artificial intelligence could disrupt parts of the economy more quickly than expected, and by late quarter a rise in geopolitical tensions that pushed oil prices higher. As of the final week of March, the S&P 500 was down about 5% for the year, the Nasdaq had moved into correction territory, and the Dow also confirmed a correction. Even so, the pullback has moderated valuations, with the S&P 500’s forward price to earnings multiple falling from above 22 times at the start of the year to below 20 times by quarter end. In our view, that does not eliminate risk, but it does improve the opportunity set for patient long-term investors.

Against that backdrop, our focus remained on risk management and on upgrading portfolio quality where we believed the prospective return was most attractive. During the quarter we sold our positions in Abbott Laboratories (ABT) and Roper Technologies (ROP). We initiated new positions in Ametek (AME), S&P Global (SPGI), Flowserve (FLS), and GE HealthCare (GEHC). Each of these companies operates in areas where we believe durable demand, strong management teams, and solid cash flow generation can support attractive returns over time. As always, we continue to favor businesses that can fund their own growth, maintain pricing power, and allocate capital in shareholder-friendly ways.

Looking ahead, we expect the investment environment to remain fluid. The market is still digesting the implications of trade policy, energy prices, and the path of monetary policy, while also weighing the powerful long-term benefits of technology investment against near-term valuation and execution risks. We are comfortable being patient in this environment. Periods of uncertainty often create opportunities to add to quality businesses at more attractive prices, and we believe disciplined portfolio management is especially important when headlines are shifting quickly.

Thank you for entrusting Ayrshire Capital Management LLC with the management of your money. We look forward to speaking with you in the coming weeks.

Sincerely,

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