We hope you had a chance to enjoy some time with family and friends over Easter.
Markets have had an uneven start to the year, with volatility driven by inflation, interest rate expectations, and geopolitical developments. After the strong returns of the past two years, this shift toward a more normal environment is not unexpected. Economic data has remained relatively resilient, with labour markets holding up and corporate earnings generally stable. Inflation is trending in the right direction, although not in a straight line, and the timing of interest rate cuts remains a key focus for markets.
Oil prices have also been an important factor this quarter. The recent move higher has added some short-term pressure to inflation expectations, but if prices stabilize or move lower, this could help ease those pressures in the months ahead.
Geopolitical developments have contributed to periods of volatility. While these events can impact markets in the short term, they have historically had limited long-term effects on broader economic outcomes.
Looking ahead, we expect returns to be more moderate and increasingly differentiated across sectors and regions, making diversification and selectivity even more important.
Fixed income continues to provide attractive income and stability at current yield levels, while alternative investments remain an important source of diversification. Together, these allocations help manage volatility while still participating in longer-term growth.
Our outlook remains cautiously optimistic. We believe the economy can support positive returns, although likely at a more measured pace than in recent years. As always, our focus remains on keeping portfolios aligned with your long-term objectives rather than reacting to short-term market movements.
If you would like to discuss your portfolio or have any questions, please do not hesitate to reach out. We are always happy to connect.