Q1 2026: Certain Uncertainty

The first quarter of 2026 has unfolded against a backdrop of ongoing global uncertainty — including tensions in the Middle East, continued conflict in Eastern Europe, and growing strategic rivalry between the United States and China. These developments, especially those in the middle east, influence energy markets and in turn shape inflation and interest rate expectations. While the connections are not always immediate or predictable, they contribute to the environment in which markets have experienced some volatility to begin the year — and with that has come renewed attention to short-term results and headlines. As always, it is worth stepping back to place recent events in proper context.

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A Familiar Pattern

The S&P 500 declined by 3.1% (in Canadian Dollars) during the first quarter of 2026. The Canadian stock market was among a select group, including Britian and Japan, that made small gains. While never comfortable, the volatility we have experienced is not unusual. We have seen similar — and more pronounced — periods recently in the S&P 500:

• 2018 - Down 19.8% (September to December)

• 2020 - Down 33.9% (February to March)

• 2022 - Down 25.4% (January to October)

• 2025 - Down 18.8% (February to April)

(Source: Yahoo Canada Finance. Returns based on ^GSPC in USD)

Each of these periods felt uncertain at the time. In each case, the discipline of staying invested and avoiding reactionary decisions proved far more important than attempting to anticipate the next move.

Index Returns vs. Your Experience

One of the important distinctions in periods like this is the difference between index performance and actual client outcomes.

While broad market indices have declined this quarter, your portfolios have, in aggregate, been relatively stable — roughly flat over the same period.

This is not accidental.

Your portfolios are intentionally constructed with diversification across asset classes, sectors, and strategies. The goal is not to fully participate in every market advance, but rather to provide a smoother and more resilient experience across full market cycles.

Periods like this are where that design becomes most visible.

Invesco Canada Proxy Vote

Many of you have received communication regarding the proposed acquisition of Invesco Canada by CI Global Asset Management, along with a request to participate in a proxy vote.

This is a corporate transaction between investment firms and does not represent a change to your financial plan or the role your investments play within it. The proxy vote is part of the formal approval process for the transaction. Taking no action will result in your vote being recorded in line with management’s recommendation. At present, no action is required unless you wish to participate directly in the vote.

On a personal note, Invesco (Trimark) is where I started my career and I have many fond memories of my years there. It is difficult to see the business sold but I am confident that your investments remain in good, if not better, hands. I will continue to monitor the investments for changes. The two largest holdings in our practice (Invesco 1-5 Year Laddered Corporate Bond Index ETF Fund and Invesco Global Companies Fund) will continue as they have in the past. The bond fund is based on the underlying ETF which will not change, and the Global Companies Fund will continue to be managed by Andrew Hall with Invesco based in Henley (near London), England. I met Andrew a couple of years ago and have confidence in his team’s investment approach.

Putting Q1 Into Perspective

Periods like this are a natural part of investing. While they can feel unsettled in the moment, they rarely change what matters most with your investment plan. Our focus remains on managing your portfolio thoughtfully, with discipline and care, and on supporting the long-term plans that matter to you and your family.

Thank you, as always, for your continued trust.