{"id":780,"date":"2026-02-17T18:21:16","date_gmt":"2026-02-17T18:21:16","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/?p=780"},"modified":"2026-02-17T18:31:08","modified_gmt":"2026-02-17T18:31:08","slug":"january-2026-portfolio-memo","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/january-2026-portfolio-memo\/","title":{"rendered":"January 2026 Portfolio Memo"},"content":{"rendered":"

Market Commentary<\/span><\/strong><\/h2>\n

One thing is certain: investing these days is not for the faint of heart. A month ago, the U.S. arrested the President of Venezuela and threatened to invade Greenland, and now markets are charting new all\u2011time highs. Gold has been swinging around with price moves that look more like GameStop than the \u201csafe haven\u201d it\u2019s supposed to be, including its biggest one\u2011day drop since 1983.1<\/sup><\/span><\/a><\/p>\n

Amid all this volatility (in both markets and geopolitics), U.S. stocks have lagged, with the S&P 500 basically sitting where it was at the end of October. As we\u2019ve cautioned before, large-cap U.S. equity valuations are quite high, so it\u2019s reasonable to see revaluations and rotations between sectors and individual companies. The latest scare – that artificial intelligence (AI) could seriously undermine the business model for many software services – has driven many software-as-a-service (SaaS) stocks down 30\u201350%.<\/p>\n

.<\/span>We believe volatile markets are the norm (and have been for years). Investors waiting for calmer days may be waiting a long time. It\u2019s better to invest in a strategy that can manage volatility in a way that aligns with your personal circumstances. In today\u2019s environment, that means more diversification, discipline, adaptability, and quality. We\u2019ve strengthened all four areas in our portfolios.<\/p>\n

Economic data has continued to surprise to the upside. Retail sales, industrial production, and labour numbers all point to ongoing resilience. Inflation has cooled, allowing interest rates to move lower and helping maintain stable financial conditions. The nomination of Kevin Warsh as the next Chair of the U.S. Federal Reserve was welcomed by markets (gold being the obvious exception), and even the Prime Minister – and two\u2011time central bank Governor – Mark Carney offered his endorsement. In our opinion, this is one of the most important recent economic developments. A strong, capable Fed chair should help restore confidence in the Fed\u2019s independence and long\u2011term stewardship.<\/p>\n

Despite complex social and geopolitical issues, there are still tremendous opportunities for investors. This isn\u2019t a time to be scared – it\u2019s a time to be calculated.<\/p>\n

Chart of the month<\/span><\/strong><\/h3>\n

\"P\/E<\/a><\/span><\/p>\n

P\/E Has Gone Nowhere In 2025<\/span><\/a><\/p>\n

We have spent a lot of time emphasizing how expensive the stock market is…and it is expensive. BUT…it didn’t get more expensive in 2025 and that’s a very good thing. This chart shows that returns on the S&P 500 were driven completely by earnings growth (good fundamentals), not multiple expansion (more speculative). The issue is that nearly all of that earnings growth was from a small group of the largest companies. Nevertheless, there may not be as much speculative fervour in U.S. stocks as some believe.<\/p>\n

Content Recommendation: Blackstone’s 2026 Investment Perspectives<\/span><\/strong><\/h3>\n

Learn more about the five forces shaping markets in 2026, from AI-driven productivity to moderating inflation and a falling global cost of capital.<\/p>\n

Web Version:<\/p>\n

2026 Investment Perspectives – Blackstone<\/span><\/a><\/p>\n

PDF Version:<\/p>\n

2026 Investment Perspectives – Blackstone (PDF)<\/span><\/a><\/p>\n

Portfolio strategy<\/span><\/strong><\/h3>\n

Debt<\/span><\/strong><\/h4>\n
Liquid fixed income<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>For a few years corporate bonds provided safety and attractive returns. They have returned to their typical role protecting portfolios, providing liquidity and outperforming cash.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>At only 3.4%, Canadian government bond yields are too low to provide much benefit.<\/div>\n<\/div>\n<\/div>\n
Private credit<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>After having its day in the sun, earning consistent double digit returns, private credit is now fighting a headwind of negative headlines.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>Widespread concern seems overblown, especially amongst high-quality managers.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>We have improved manager quality and reduced exposure.<\/div>\n<\/div>\n<\/div>\n

Equity<\/span><\/strong><\/h4>\n
Public equity (stocks)<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>International stocks continue to outperform following many years of mediocre returns.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>Geographic diversification is paying off.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>We reduced S&P 500 exposure in favour of an active manager. This will allow for a more tactical approach and help reduce concentration risk in technology.<\/div>\n<\/div>\n<\/div>\n
Private equity<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>The expectations for deal activity are high, including the potential for several high-profile initial public offerings (IPOs) such as SpaceX and Anthropic.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>“Animal spirits” is a nebulous concept but accurately captures what we are currently witnessing in private equity markets.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>New “plumbing” of private equity includes perpetual\/evergreen funds, perpetual funds, drastically enhanced secondaries markets…we believe it all adds up to a healthier private equity market going forward.<\/div>\n<\/div>\n<\/div>\n

Real assets<\/span><\/strong><\/h4>\n
Real estate<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>Portfolios contain only minimal real estate exposure through a small allocation in Apollo Aligned Alternatives.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>Returns seem to be improving but on balance, we see better opportunities in infrastructure.<\/div>\n<\/div>\n<\/div>\n
Infrastructure<\/span><\/strong><\/h5>\n
\n
\n
\u2022<\/span>\u00a0<\/span>Perhaps the best opportunity for balanced, risk-adjusted returns.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>Substantial capital is required to fund infrastructure projects in energy, AI, communications, transportation and defence.<\/div>\n<\/div>\n
\n
\u2022<\/span>\u00a0<\/span>Large, experienced, well-capitalized and highly integrated firms like KKR and Blackstone are well-positioned to benefit.<\/div>\n<\/div>\n<\/div>\n

\"Team<\/span><\/p>\n

1\u00a0<\/sup><\/span>BBC News, Gold and silver prices fall<\/span><\/a><\/p>\n

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One thing is certain: investing these days is not for the faint of heart. A month ago, the U.S. arrested the President of Venezuela and threatened to invade Greenland, and now markets are charting new all\u2011time highs.<\/p>\n","protected":false},"author":262,"featured_media":781,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/posts\/780","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/users\/262"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/comments?post=780"}],"version-history":[{"count":5,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/posts\/780\/revisions"}],"predecessor-version":[{"id":788,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/posts\/780\/revisions\/788"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/media\/781"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/media?parent=780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/categories?post=780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/constellationwealthmanagement\/wp-json\/wp\/v2\/tags?post=780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}