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Over the past twelve months, the Growth Portfolio gained 33.63%, the Income Portfolio rose 8.74%, and the American Growth Portfolio advanced 44.89%. These results were achieved while we deliberately reduced risk and leaned defensively, positioning for a market decline we have been expecting for several months. That decline is now beginning to take shape, as broader investor attention catches up to conditions we have been monitoring beneath the surface.
Since late 2025, equity markets have appeared relatively orderly at the index level, but internal conditions have steadily weakened. Liquidity has thinned, leverage has rebuilt in less visible ways, and correlations that once provided diversification benefits have begun to converge. History shows that market structures like this are inherently unstable. Rather than resolving quietly, they tend to give way to sharp repricing episodes, where volatility rises quickly and short term returns become broadly correlated to the downside.
From a tactical perspective, current conditions suggest the market remains vulnerable to a further leg lower into mid April. A reflexive rally into the summer months is possible thereafter, particularly if near term positioning becomes stretched. However, at this stage, we view any summer rally as inherently fragile, given the volatility dynamics now emerging. As always, we approach these scenarios probabilistically rather than deterministically.
Recent developments show upside momentum steadily building in volatility markets, a pattern that has only previously appeared before the Global Financial Crisis in 2007, based on our analysis. If history rhymes, this raises the risk of a self reinforcing feedback loop: as volatility rises, mechanical hedging activity can force equity selling, pushing prices lower and volatility higher in turn. In such environments, volatility feeds upon itself, increasing the odds of a disorderly equity selloff.
In recent weeks, our work on market structure, volatility dynamics, and options driven flows has been quoted in MarketWatch and syndicated more broadly, highlighting the growing role these forces are playing in equity market behavior. We continue to believe that understanding market plumbing, and how positioning, funding, and hedging interact, is essential to managing risk in the current environment.
Beyond short term dynamics, the broader macro backdrop continues to deteriorate. Early indicators suggest that growth in both bank lending and non bank credit (the twin engines of private sector expansion) has begun to flatten. At the same time, year over year fiscal flows, adjusted for inflation, are contracting. Together, these forces reduce the net inflow of financial assets into the private sector, gradually slowing income growth and weakening liquidity buffers.
The growth of assets in U.S. money market funds has also begun to stall recently, potentially constraining access to leverage, one of the key ingredients supporting the equity market boom through 2025. Credit spreads are widening, particularly in areas tied to private credit and artificial intelligence related infrastructure. Because much of the recent expansion in lending has been concentrated in these areas, tightening conditions can transmit stress quickly through multiple layers of the economy, including back into the banking system, affecting credit growth at the macro level.
Finally, the recent rise in energy prices, which we’ve been expecting, has become increasingly relevant. Central banks are likely to look through near term, energy driven inflation pressures, recognizing that higher energy costs are inherently growth negative and risk further eroding consumer demand. Should labour markets soften as a result, policy rates may fall later this year. However, with government debt already elevated and signs of private sector lending fatigue emerging, lower policy rates may deliver diminishing returns, contrary to prevailing expectations. In fact, lower policy rates could further weaken fiscal support without meaningfully reviving sustainable credit growth.
Taken together, even after recent declines, equity market risks remain underappreciated in our view. While the magnitude and timing of any additional downside will depend on how financial flows evolve, the possibility of a deeper adjustment remains firmly on the table should liquidity conditions continue to tighten.
This is not a call for pessimism, but for patience. Historically, the most compelling long term opportunities emerge only after volatility reprices assets and excess leverage is cleared from the system. At this stage in the cycle, our objective remains to protect capital, remain selective in deploying risk, and preserve flexibility, so we can compound meaningfully when conditions improve. We continue to focus on probabilities over predictions, and structure over stories.
As always, we welcome discussions with clients and like minded investors who value disciplined, risk-aware portfolio management. We are particularly well suited for households with $1 million or more in investable assets, professionals with complex income and tax considerations, including Ontario based lawyers, and individuals who have accumulated significant wealth through digital assets and are now focused on thoughtful capital preservation and growth.
Further Reading
Clients seeking a deeper perspective on the market structure and volatility dynamics discussed above may find the following recent MarketWatch articles informative, where our work was quoted:
• A trap door could open up under the S&P 500 after this influential options trade expires
• This obscure government data might hold the key to what has been driving big swings in the stock market
Model Portfolio Highlights
Growth Portfolio:We exited Dollarama. We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
American Growth Portfolio: We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
Income Portfolio: We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
Our approach targets opportunities with a significant margin of safety with minimal risk of permanent loss. Patience remains essential in realizing long-term gains.
Thank you for your continued trust.
Yours,
Ben
Ben W. Kizemchuk
Portfolio Manager & Investment Advisor
Wellington-Altus Private Wealth
Office: 416.369.3024
Email: bwk@wellington-altus.ca
Book time with Ben W. Kizemchuk: Portfolio and Plan Review
Ben Kizemchuk offers full-service wealth management for high-net-worth Canadians including families, business owners, and successful professionals. Ben and his team provide investment advice, financial planning, tax minimization strategies, and retirement planning.
Performance reporting disclaimer: Performance results reflect the returns of each representative model portfolio. Returns are calculated using each model portfolio’s monthly performance, including changes in securities values, and accrued income (i.e., dividend and interest), against its market value at the closing of the last business day of the previous month. Performance results are expressed in the stated strategy’s base currency and are calculated on a net of fees basis. Individual account performance may materially differ from the representative performance history set out in this document, due to factors such as an account’s size, the length of time the strategy has been held, the timing and amount of deposits and withdrawals, the timing and amount of dividends and other income, and fees and other costs. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security and no financial decisions should be made solely on the basis of the information provided in this document. This is not an official statement from WAPW. Please refer to your official WAPW statement for your specific performance numbers.
Market Commentary
April 2026 Update
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Over the past twelve months, the Growth Portfolio gained 33.63%, the Income Portfolio rose 8.74%, and the American Growth Portfolio advanced 44.89%. These results were achieved while we deliberately reduced risk and leaned defensively, positioning for a market decline we have been expecting for several months. That decline is now beginning to take shape, as broader investor attention catches up to conditions we have been monitoring beneath the surface.
Since late 2025, equity markets have appeared relatively orderly at the index level, but internal conditions have steadily weakened. Liquidity has thinned, leverage has rebuilt in less visible ways, and correlations that once provided diversification benefits have begun to converge. History shows that market structures like this are inherently unstable. Rather than resolving quietly, they tend to give way to sharp repricing episodes, where volatility rises quickly and short term returns become broadly correlated to the downside.
From a tactical perspective, current conditions suggest the market remains vulnerable to a further leg lower into mid April. A reflexive rally into the summer months is possible thereafter, particularly if near term positioning becomes stretched. However, at this stage, we view any summer rally as inherently fragile, given the volatility dynamics now emerging. As always, we approach these scenarios probabilistically rather than deterministically.
Recent developments show upside momentum steadily building in volatility markets, a pattern that has only previously appeared before the Global Financial Crisis in 2007, based on our analysis. If history rhymes, this raises the risk of a self reinforcing feedback loop: as volatility rises, mechanical hedging activity can force equity selling, pushing prices lower and volatility higher in turn. In such environments, volatility feeds upon itself, increasing the odds of a disorderly equity selloff.
In recent weeks, our work on market structure, volatility dynamics, and options driven flows has been quoted in MarketWatch and syndicated more broadly, highlighting the growing role these forces are playing in equity market behavior. We continue to believe that understanding market plumbing, and how positioning, funding, and hedging interact, is essential to managing risk in the current environment.
Beyond short term dynamics, the broader macro backdrop continues to deteriorate. Early indicators suggest that growth in both bank lending and non bank credit (the twin engines of private sector expansion) has begun to flatten. At the same time, year over year fiscal flows, adjusted for inflation, are contracting. Together, these forces reduce the net inflow of financial assets into the private sector, gradually slowing income growth and weakening liquidity buffers.
The growth of assets in U.S. money market funds has also begun to stall recently, potentially constraining access to leverage, one of the key ingredients supporting the equity market boom through 2025. Credit spreads are widening, particularly in areas tied to private credit and artificial intelligence related infrastructure. Because much of the recent expansion in lending has been concentrated in these areas, tightening conditions can transmit stress quickly through multiple layers of the economy, including back into the banking system, affecting credit growth at the macro level.
Finally, the recent rise in energy prices, which we’ve been expecting, has become increasingly relevant. Central banks are likely to look through near term, energy driven inflation pressures, recognizing that higher energy costs are inherently growth negative and risk further eroding consumer demand. Should labour markets soften as a result, policy rates may fall later this year. However, with government debt already elevated and signs of private sector lending fatigue emerging, lower policy rates may deliver diminishing returns, contrary to prevailing expectations. In fact, lower policy rates could further weaken fiscal support without meaningfully reviving sustainable credit growth.
Taken together, even after recent declines, equity market risks remain underappreciated in our view. While the magnitude and timing of any additional downside will depend on how financial flows evolve, the possibility of a deeper adjustment remains firmly on the table should liquidity conditions continue to tighten.
This is not a call for pessimism, but for patience. Historically, the most compelling long term opportunities emerge only after volatility reprices assets and excess leverage is cleared from the system. At this stage in the cycle, our objective remains to protect capital, remain selective in deploying risk, and preserve flexibility, so we can compound meaningfully when conditions improve. We continue to focus on probabilities over predictions, and structure over stories.
As always, we welcome discussions with clients and like minded investors who value disciplined, risk-aware portfolio management. We are particularly well suited for households with $1 million or more in investable assets, professionals with complex income and tax considerations, including Ontario based lawyers, and individuals who have accumulated significant wealth through digital assets and are now focused on thoughtful capital preservation and growth.
Further Reading
Clients seeking a deeper perspective on the market structure and volatility dynamics discussed above may find the following recent MarketWatch articles informative, where our work was quoted:
• A trap door could open up under the S&P 500 after this influential options trade expires
• This obscure government data might hold the key to what has been driving big swings in the stock market
Model Portfolio Highlights
Growth Portfolio:We exited Dollarama. We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
American Growth Portfolio: We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
Income Portfolio: We continue to hold equal portions of short-term U.S. Treasury bonds and U.S. Treasury Inflation-Protected Securities.
Our approach targets opportunities with a significant margin of safety with minimal risk of permanent loss. Patience remains essential in realizing long-term gains.
Thank you for your continued trust.
Yours,
Ben
Ben W. Kizemchuk
Portfolio Manager & Investment Advisor
Wellington-Altus Private Wealth
Office: 416.369.3024
Email: bwk@wellington-altus.ca
Book time with Ben W. Kizemchuk: Portfolio and Plan Review
Ben Kizemchuk offers full-service wealth management for high-net-worth Canadians including families, business owners, and successful professionals. Ben and his team provide investment advice, financial planning, tax minimization strategies, and retirement planning.
Performance reporting disclaimer: Performance results reflect the returns of each representative model portfolio. Returns are calculated using each model portfolio’s monthly performance, including changes in securities values, and accrued income (i.e., dividend and interest), against its market value at the closing of the last business day of the previous month. Performance results are expressed in the stated strategy’s base currency and are calculated on a net of fees basis. Individual account performance may materially differ from the representative performance history set out in this document, due to factors such as an account’s size, the length of time the strategy has been held, the timing and amount of deposits and withdrawals, the timing and amount of dividends and other income, and fees and other costs. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security and no financial decisions should be made solely on the basis of the information provided in this document. This is not an official statement from WAPW. Please refer to your official WAPW statement for your specific performance numbers.
Recent Posts
March 2026 Update
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February 2026 Update
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January 2026 Update
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December 2025 Update
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November 2025 Update
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The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus. Wellington-Altus Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. All trademarks are the property of their respective owners.