HPWG Podcast May 2026: Market Resilience Amid Geopolitical Tensions

Todd:
Hello and welcome to the May edition of the Hoffman Private Wealth Group Podcast. I’m Todd Hoffman, Certified Portfolio Manager and CFP®, Founder and Managing Director at Hoffman Private Wealth Group at Steward Partners. Thanks for joining us today.

Jenna:
And I’m Jenna Makras, a Wealth Advisor with the Hoffman Private Wealth Group. We hope your year is off to a strong start. There has been a lot going on in markets, geopolitics, and with interest rates, so we have a timely update we think you’ll find helpful and informative.

Jenna:
Before we dive into markets and everything happening overseas, I know a lot of our listeners are starting to think about summer. Todd, what are you looking forward to over the next few months?

Todd:
I’m excited to spend some time out in Colorado this summer. It’s always been a special place for my family with cooler air and mountain views.  It’s a chance to work “on” the business while not working “in” the business. I find this very helpful. slow down a bit and recharge. I’m hoping to get in some hiking, bike riding and Golf, and maybe a few mornings doing my research with a cup of coffee on the porch.

Jenna:
That sounds amazing. I’m going in a slightly different direction — I’m getting ready for a mission trip with my church to the Dominican Republic. We’ll be working with local communities, helping with some small building projects, and supporting a few outreach programs. I’m really looking forward to the opportunity to serve, to learn, and to step outside my normal routine for a little while. Also, of course some quality time with my daughter Cloe, summers are so fun with her.  

Todd:
I love that. It’s a great reminder that life is about more than markets and headlines. Whether it’s time in the mountains, a mission trip, or just a little extra time with family and friends, those are the things that really matter.

Jenna:
Exactly. And with that in mind, let’s turn to what’s happening in the world and in markets, and how we’re helping clients stay on track so they can enjoy those kinds of moments, no matter what the news flow looks like.

Todd:
Before we do, I’ll start us off with a quick riddle — you know I like to sneak one or two in each episode.
“I can run but not walk, I have a mouth but never talk, I have a bed but never sleep. What am I?”
I’ll give everyone a second to think.

The answer is: a river.
A river is always moving forward, whether we’re watching it every second or not — and markets work a lot like that. Time in the market is what matters for long term wealth accumulation. 

Jenna:
That’s a good way to frame it, Todd, let’s start with what’s still dominating the headlines — the conflict with Iran and the broader tensions in the Middle East. Can you walk us through where things stand now and what it means for investors?

Todd:
The situation in the Middle East has evolved from a sudden shock earlier in the year into an extended conflict that markets are trying to digest as part of the backdrop rather than a one-time event. We’ve seen repeated disruptions and partial blockades around the Strait of Hormuz, the key waterway where a very large share of global oil and LNG flows. That’s kept energy prices elevated and volatility high.

The market response has been more nuanced than a simple “risk off” scenario. Oil and energy-related assets have been the most directly affected, with prices reflecting worries about supply and shipping routes. At the same time, U.S. equities have shown resilience — we’ve had headline-driven pullbacks, but markets have repeatedly found support and, at times, traded not far from prior highs as investors refocus on earnings, AI spending, and the economic data. Instead of a straight-line selloff, we’re getting a pattern of short-term shocks layered over a still-growing but uneven economic environment.

When we talk about the numbers today — whether it’s earnings, energy prices, or sector performance — we’re drawing on data from sources like FactSet, Bloomberg, Reuters, and various government and central-bank releases, which we review regularly in our investment process.

Jenna:
Why does all of this still matter for the broader economy and for portfolios in May?

Todd:
Higher oil and gas prices act like a hidden tax on the economy. They increase transportation and production costs, which can slow progress on inflation. While growth remains positive and the labor market is cooling gradually—not weakening sharply—rising energy costs add pressure for both consumers and businesses.

At the start of the year, markets expected inflation to continue to ease. Now, as we discussed on last month’s Podcast, with energy prices moving higher and supply uncertainty lingering, that outlook has become less certain. Many economists believe the Federal Reserve may keep rates higher for longer and some are suggesting further tightening may be necessary due to a pickup in oil related inflation. Further, the longer this last in Iran, the more analyst move into the raise interest rates camp. 

It looks like after a lot of political wrangling Kevin Warst will be the new Fed Chief in May. With all of this going on he will be walking into a storm of decisions.  

This combination of policy uncertainty and geopolitical risk reinforces why I have taken a more tactical approach to investing this year.  First and foremost, to focus on managing risk, but also to take advantage of opportunities during the market’s swings, we have added to investments in Energy, then we moved to beaten up technology companies, particularly in the AI space. Finally, we have been utilizing tax swaps to try to mitigate some of the taxable gains this year. I know many people don’t understand when there is a lot of trading, but this year we have been able to add a lot of return compared to our benchmarks in all of our portfolios.   

Jenna:
Can you comment more on Energy and Oil? Where do things stand today, and what are you watching?

Todd:
Oil has been on a roller coaster since the conflict escalated. According to Bloomberg, prices surged from the low-70s per barrel before the war to roughly the 120-dollar area at the height of the panic. Since then, with announcements about partial reopenings and temporary ceasefires Oil has pulled prices back and is trading in the 100 range and markets remain extremely sensitive to any news headlines about inventory drawdowns of refined products like diesel and jet fuel.

Jenna:
So for someone listening who has big travel plans later this year, what’s the practical takeaway?

Todd:
The airline industry is one of the first to feel rising oil prices. Jet fuel costs have jumped sharply due to supply disruptions in the Middle East, making fuel both more expensive and harder to get.

As a result, airlines are adjusting. Some are cutting flights, especially in Europe, while others are grounding older planes, reducing less profitable routes, and raising ticket prices to cover higher costs. I would book your tickets sooner than later, even if the Iran situation improves quickly, it could take time for Jet Fuel inventories to get back to normal. 

Jenna:
So when people hear the word “embargo,” what does that mean for the global energy market?

Todd:
The U.S. and its allies have tightened sanctions and enforcement on Iranian exports and placed new sanctions and targeting Iran’s shipping and oil-transportation infrastructure. The idea is to choke off Iran’s ability to pay for their war efforts and sponsor proxies, but the ripple effect is fewer barrels on the market and increased volatility in global energy prices. 

Jenna:
Let’s zoom back out. Beyond the conflict and energy markets, what are you watching most closely as we head through May?

Todd:
The macro backdrop is not perfect, but it’s still constructive: according to FactSet, economic growth is positive, the labor market is cooling but not collapsing, and inflation — while sticky — is well below the peak we saw a couple of years ago.

What’s really changing is where investors see future growth and are piling into AI and Technology creating powerful momentum. 

Let me throw out one more quick riddle:

“I’m not a single thing, but together I make you strong. The more different pieces you add, the better I work. What am I?”

The answer is: a team — and in our world, a diversified portfolio. No single stock, or sector should carry everything. It’s the mix that gives you resilience when the world gets volatile.

Jenna:
And with that in mind, let’s talk about how that diversified approach has translated into positive results this year.

Jenna:
Strong performance is obviously good news, but in taxable accounts it usually comes with another side of the coin: taxes. How are you thinking about that for clients?

Todd:
You’re right — when portfolios perform well we realize gains from successful positions and taxable accounts naturally can accumulate significant realized and unrealized gains over the course of the year, as our accounts have. 

To address that, we’ve been vigilant about implementing tax-aware strategies throughout the year — not just at year-end. That includes ongoing tax-loss harvesting and tax swaps where appropriate: realizing losses in positions that no longer fit or that have lagged and reinvesting the proceeds into similar but not substantially identical securities to maintain market exposure while capturing those losses. 

Our philosophy is straightforward: we don’t let the tax tail wag the investment dog, but we do everything we reasonably can to reduce or mitigate taxes without compromising the quality and positioning of the portfolio. Over time, this has made a meaningful difference in net, after-tax results for our clients.

Jenna:
Let’s talk briefly about interest rates. What is your current view on Fed policy as of May?

Todd:
We will have to see how Mr. Warst, the incoming Fed chair responds to the recent events but I expect we will have a small rate cut before the end of the year, not much more. 

Jenna:
How have bonds been doing in the portfolios?

Todd:
The bond markets have been a little choppy but broadly good. Private Credit has experienced liquidity concerns and a lot of news but not a lot of actual changes in prices. Public market bonds like we own have been steady and yields are attractive. We have shortened the maturities a bit based on the expectation of fewer rate cuts, to reduce potential volatility, but overall our bonds look very attractive relative to other fixed income investments. 

Jenna:
Todd, if you had to sum it up for listeners, what’s your big takeaway right now?

Todd:
This year is a reminder that volatility is part of the normal investing experience — especially when you combine geopolitical shocks, changing leadership, and shifting rate expectations. We’ve already seen several pullbacks, and we’re likely to see more. Historically, even strong market years often include one or two meaningful corrections along the way.

The key is not to let short-term headlines get in the way of your long-term investments and to be opportunistic when opportunities present themselves. We’re focused on staying disciplined: continuously reassessing risks, trimming where prices and expectations have outrun fundamentals, and leaning into areas where we believe the next wave of durable growth and income will come from. Our goal at Hoffman Private Wealth Group is to help high-net-worth families, executives, business owners, and physicians navigate these shifts with discipline and clarity, so you can stay on track toward your long-term goals even when the world feels uncertain.

Jenna:
Thank you for listening to the May edition of the Hoffman Private Wealth Group Podcast. If you find this conversation helpful, please share it with someone who might benefit from a thoughtful, research-driven perspective on today’s markets.