Auour Quick Note

Yesterday’s sharp market decline was unsettling, and the selling appeared to reflect a degree of panic, particularly among companies tied to the AI investment boom. Over the past several months, we have written about our increasingly defensive positioning, including the move to a 20% cash allocation. That followed a process we began roughly a year ago of diversifying away from AI’s earliest beneficiaries. These steps cannot eliminate losses, but they are intended to reduce vulnerability during periods like this.

We do not yet know whether yesterday’s decline represents the first domino in a broader adjustment or a correction that releases some of the excess built into momentum-driven stocks. At this time, our signals are not indicating a need for additional defensiveness. We continue to monitor whether the stress is spreading or remaining concentrated in the areas that had attracted the most enthusiasm.

Our current positioning gives us room to be patient and capital to invest as opportunities emerge. We will let the evidence guide our next steps, with the same focus on managing downside risk and participating in long-term growth that informed our preparations before yesterday’s decline.