Periods of stress tend to generate more noise than clarity. As a result, we wanted to share a short note on how we're thinking about the current environment and how we're positioning our portfolios.

The headlines are intense right now. 

Rising geopolitical tensions, sharp moves in energy markets, and increased volatility across equities. It's the kind of environment that naturally makes investors uneasy. Moments like this often feel like they require action. Historically, they require discipline.

At its core, this is an energy driven shock.

Oil supply risk has increased, prices are reacting accordingly, markets are adjusting quickly and often emotionally.

This is not an uncontrolled system. Governments, central banks and global producers are already responding. However, uncertainty and general concern is quite high. To be clear, this is not an issue of the financial system. It is an inflation shock, not a structural crisis. Higher energy prices can pressure inflation, impact sentiment and create volatility but they do not typically undermine the global economy. These factors amplify stress beyond the underlying fundamentals.

History tells us that geopolitical shocks tend to follow a consistent pattern:

1. Initial spike in volatility
2. Rapid repricing
3. Stabilization as uncertainty peaks
4. Recovery before headlines improve

Remember, global markets are forward-looking. We are not over-reacting to headlines, we remain focused on long-term positioning, discipline portfolio construction, and managing risk. We recognize this latest conflict is a serious situation, and volatility may persist, but this is not a financial crisis. This is another example of a supply shock that markets are equipped to process.

Final Thoughts

The biggest mistake investors make is confusing volatility with risk. Volatility is uncomfortable, risk is permanent loss of capital. These are very different, and we remain focused on protecting against the latter through our commitment to our diversified multi-asset class strategy.

In equities, we remain focused on our long-term thesis with a modest overweight to the U.S. AI infrastructure buildout, with additional allocations to high-quality global healthcare, financials, and energy. Our core U.S. equity positions are supported by broader global equity and Canadian allocations.

In fixed income, we remain positioned with a relatively short duration (approx. 3 years) portfolio focused on investment grade corporate bonds, with an average credit quality across the portfolio of A-, and modest allocations to convertibles and high yield.

Our alternatives strategy remains focused on liquid market-neutral assets with low correlation to traditional equities and fixed income, with modest allocations to private equity and private real estate. We have no exposure to private credit in our alternatives model, as we exited our positions in 2025.

In environments like this, we believe staying disciplined, diversified, and focused on long-term objectives remains the most effective course of action. As always, please contact us with any questions you might have.