There was no shortage of non-financial-market-related drama in the first quarter of 2026, which ironically led to financial-market-related drama. When the dust settled, the net results for most investors at the end of the quarter were actually quite boring despite the wild ride that markets took to get to the finish line. Canadian equities, again, led major markets with a 3.94% gain, followed by MSCI EAFE Index rising by 0.55%, and Canadian bonds also added 0.23%. The S&P 500 was in negative territory, dropping by -2.60%.
The ongoing U.S. tariff saga continued, with the U.S. Supreme Court ruling that President Trump did not have the authority to implement tariffs under the International Emergency Economic Powers Act. Although President Trump warned that he will find other ways to accomplish what he wants, the significance of tariffs took a backseat to the military action taken against Iran by the United States and Israel.
The economic significance of a war against Iran is most predominantly concentrated on the price of oil as they are a major exporter of the commodity and have a major influence on the control of trade through the Strait of Hormuz. When a significant supply of such an important global commodity is constrained, it can have a sharp impact on price, raising recession fears in many parts of the world. Not surprisingly, stock markets typically do not respond well to such price shocks.
Subsequent progress in resolving the conflict has had a profound impact on moderating economic fears, but the war is by no means over, and it remains to be seen what the lasting effects will be on growth and inflation. As our opening comments regarding market performance indicated, markets have performed just fine despite the unsettling nature of geopolitical events, and we expect that they will continue to do so.
There is a clear and pronounced direct correlation between market volatility and the number of Justwealth client inquiries regarding investment “positioning”. Big moves in the stock markets (usually downwards) results in lots of questions – this should not be surprising, and we expect it. “Should I be changing ____fill-in-the-blank_____ due to what is going on in the world?”. The answer has always been, and will always be, “NO” – do not react to current market conditions. Current market conditions are constantly changing and are not predictable. You would be best served to focus on your investment objective and your time horizon, not the state of markets.
There are a number of upcoming events that could shift media headlines away from the Iranian war: U.S. Federal Reserve Chairman change (May 15); Upcoming Canada-U.S.-Mexico trade agreement review (July 1); U.S. mid-term elections (Nov 3). All three of these events should be considered significant, with the potential to have an impact on markets (positive or negative). We mention this to provide full transparency that we expect markets to be volatile (at times) for effectively the rest of the year. As we have stated already, this does not imply that you need to change your investments.
If there is one area of concern where we might recommend taking action, it would be in the area of private investments. Justwealth does not currently use any private investments in any portfolio, but other firms might. Risks involved with private equity or credit are not well understood, and typically only become apparent during periods of market duress. There has been a big buildup of capital in private investments, and we are starting to see signs of firms taking restrictive actions on dividend payments and redemptions. In a worst-case-scenario, private pools or funds can collapse, and it may take years to collect a fraction of your initial investment. If you do own private investments or other illiquid investments outside of Justwealth, please read the required documentation and understand your risks. If you would like an independent review of any particular private investment, Justwealth would be happy to oblige.
Justwealth has been serving Canadians’ investment needs now for more than 10 years. Our track record has received much attention and praise from clients and the media, and we fully intend to maintain our leadership position, carefully and responsibly providing stewardship to our clients. Thanks for your support!
Here is a recap of market performance as of March 31, 2026*
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