February 2026 Newsletter

February 2, 2026

Dear Valued Client:

“…We’ll Be Running with the Bulls of Wall Street”

While the quiet of mid-winter often suggests a period of dormancy, the reality within our office is quite the opposite. January has once again proven to be a whirlwind of activity. Between navigating the transition of a new year, managing required minimum distributions, and preparing for tax season reporting, this month always provides a fresh start to the calendar. It requires a moment for us to ground ourselves in reflection before the year fully accelerates. As active managers, we spend these early weeks deeply immersed in economic analyses and investment reviews.

During these frigid Colorado mornings, staying inside to focus on the momentum of the markets certainly feels like the more prudent and warm choice. Much like preparing for a long winter expedition, our primary focus remains “keeping the train on the track,” ensuring we are making the necessary tactical shifts to meet your long-term financial goals while protecting the portfolios we have worked so hard to build for clients.

Portfolio Performance and Market Outlook

We are pleased to report that the IIM total portfolio has maintained strong momentum as we begin 2026. For the first month of the year, the total aggregate managed portfolio increased by 3.0% (net of fees). Our Domestic Equity category rose by 3.4%*, led by the Columbia Seligman Premium Technology Growth Fund (STK), Royce Micro-Cap Trust (RMT), Royce Small-Cap Trust (RVT), and Source Capital, Inc. (SOR); notably, each of these holdings appreciated by 7.0%* or more during January. We observed even more pronounced strength within our Alternative Equity category, which rose 6.0%*. Within this segment, several positions including Albemarle Corporation (ALB), Franco-Nevada Corporation (FNV), Teck Resources Limited (TECK), Rio Tinto (RIO), Iron Mountain Incorporated (IRM), and Kinder Morgan (KMI) surged by more than 10.0%* in the first month of the year alone.

*Individual holding returns are reported Gross of Fees.

While these gains are encouraging, we continue to monitor labor market data, corporate earnings, and potential interest rate adjustments alongside shifting geopolitical dynamics and trade negotiations. We are currently reviewing positions such as RIO, TECK, ALB, and FNV to identify instances where they exceed our long-term target allocations. In such cases, we are realizing gains where appropriate to ensure the portfolio remains balanced and prepared for evolving market conditions. This disciplined positioning is essential to our portfolio construction as the market rally broadens beyond the technology sector and into traditional value-oriented areas. The current environment offers several encouraging signals:

Resilient Economic Growth: The United States economy entered this year with significant momentum. Recent data shows that consumer spending remains robust, supported by a stable labor market and healthy household balance sheets.
Monetary Policy Tailwinds: The Federal Reserve has signaled a shift toward a more accommodative stance. With inflation trending toward target levels, the prospect of continued rate normalization is providing a supportive backdrop for both equities and fixed-income assets.
Corporate Earnings Strength: We are seeing impressive resilience in corporate earnings. Companies across various sectors, particularly those leveraging artificial intelligence to drive operational efficiency, are reporting solid margins and upward revisions for their 2026 outlooks.
Market Breadth: One of the most positive developments this month has been the "rotation" into small-cap and value stocks. This indicates that market health is not dependent on just a few large names but is instead supported by a wide range of industries.

We continue to monitor global developments closely, but the domestic indicators remain firmly in "growth" territory. Our focus remains on high-quality investments that can navigate potential volatility while capturing the upside of this economic cycle.

Security Alert: "Stay Sharp"

A couple of weeks ago, I came across a particularly interesting article regarding the rise of sophisticated scams. Below is a short summary to help you stay sharp and protect your assets. As a reminder, IIM will never call you requesting payment, and we only call to request personal information if we have been contacted by you first. Scams are becoming more common and increasingly convincing; unfortunately, no one is immune. Nearly one in five United States adults lost money to an online scam in 2025, and younger adults are reporting losses at higher rates than older generations.

Current Scams to Watch For:

Phone Scams: Fake texts from "your boss" asking you to purchase gift cards for employee appreciation; IRS imposters demanding immediate payment (sometimes via cryptocurrency); or urgent calls claiming a loved one is in trouble.
Social Media Scams: Romance scams from people pretending to be your “friend” on Facebook, that build trust over a long period; or seemingly harmless quizzes that quietly collect your personal information.

How to Protect Yourself:

Be suspicious of urgent requests or unconventional payment methods.
Never share personal information or send money based on unsolicited calls or messages. It is best to hang up and verify the request by contacting the institution directly through their official website.
Be wary of social media friend requests from people you do not know.
Do not panic. Scammers want you to rush so that you do not have time to think clearly.

Our reporting portal, Black Diamond (“The Vault”), has updated its security protocols. If you have not logged in for over a year, you will be required to reset your password. You may also now use an authenticator app for multi-factor authentication, which we highly recommend. As a reminder, the latest quarterly reports were sent on January 13 and can be accessed through your Vault portal.

We hope you have also had a refreshing and productive start to 2026. With the Winter Olympics starting later this week, we are excited to cheer on the athletes and teams competing, especially Durango’s own Charlie Mickel. It is always inspiring to watch people who have trained their whole lives get their moment to shine. It reminds us to continue to strive to be better, keep learning, and work together as a team. As always, if you have any questions or would like a review of your accounts, please reach out to us at the office.

Warmest Regards,

Intelligent Investment Management, LLP