Mirador Quick-take Portfolio Update

Dear Friends and Clients,

We are sending this short note out because we imagine that most of you have been reading or listening to the media and you may have some concerns about the escalating geopolitical tensions in the world. You may have also noticed that most of the capital markets have been experiencing increased volatility, and during this last week or so, the movements have become primarily down (aside from crude oil!). After years of mostly solid longer-term uptrends, this might be the start of a reversal to more of a bear market.

Here is a summary of the portfolio actions we have taken recently in order to provide better stability to your capital. The following refers specifically to the Canadian Mirador Income and Stability Fund (MISF), but the list generally applies to all of the various programs within our High Income with Stability approach. The numbers are somewhat different for the U.S. program due to the large and highly taxable gains that many positions have:

• Equity Income Exposure (dividend stocks) has declined from the mid 50% portion of the portfolios to the low 40% range
• Covered call writing has declined from approximately 15% to 3% of the portfolios
• Fixed Income Preferred Shares have increased from the low 30% portion of the portfolios to the mid 30% range
• Market Exposure is now slightly over 15% of the portfolios, and is invested in double-weighted inverse ETFs, giving us approximately -30% market total exposure (remember inverse ETFs increase when the market goes down)
• Cash is approximately 5%
• Given the above, the total stock market exposure is approximately 15% of the portfolios

Here are some portfolio statistics as of Friday March 20, 2026 that we hope bring you some comfort:

As you can see, our numbers are fabulous. If the downtrend continues, our numbers will remain good, and maybe even better. But if the geopolitical tensions ease and this turns out to be a short-term correction, and not a reversal to a bear market, we will give-up some of our out-performance for a while, and then we will return to the more typical allocations with the more typical results.

In the meantime, the enhanced stability versus the benchmark will allow us all to sleep better at night.

As always, Mirador keeps steadfast with our approach based on quantitative and technical analysis, not stories, media innuendoes, and predictions. The following is a summary of the most relevant quantitative observations:

For the first time in a very long time, the yield curve is fully positive. The implications of this are:

• Higher oil prices will likely create inflation
• Interest rates will likely stop going down and possibly increase to control inflation
• Higher rates might negatively affect a number of stock market sectors, and maybe even the overall market
• Higher rates might provide us with better income opportunities

Other capital markets data-related observations are:

• The numbers for the Q4 earnings report are almost complete and the results have been okay, but slowing in momentum compared to previous quarters
• The number of positive surprises has declined and negative surprises have resulted in some incredible stock price declines
• Dividend yields have been falling due to stock price appreciation
• Valuations are becoming stretched – most stocks are not super over-valued, but things have been looking expensive base on earnings, cashflow, and book value ratios
• Call writing premiums have declined, likely signalling a deterioration in stock market sentiment
• Private equity funding disasters are happening more frequently – perhaps the canary in the coal mine?
• “Co-relations” amongst asset groups are approaching 1 (more correlated), in the past this has led to a deterioration in overall market results
• Market breadth and indicators such as the ARMS index are looking like they have during past orderly, broad market downtrends
• The decline in precious metal prices is puzzling because precious metals are often stable harbours of safety during troubled times like these. We continue to examine the data for actionable insights, but the recent price decline might just be the result of the incredible price increases last year leading to profit-taking and rebalancing.

Although this doesn’t look like the years prior to the massive crashes of 2000 or 2008, there are plenty of reasons to be very cautious right now, so that is what we are doing at Mirador.

Please phone us at the numbers below if you have any questions and concerns.

Sincerely,

Stan 403-608-4664

Joyce 403-978-6798