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Markets rebounded sharply in May, with our Growth portfolios posting strong gains and the Income portfolio advancing as well.
Much like the rallies of 2009, 2018, and 2020, this one is fast, forceful, and, to some, surprising. But to us, it’s a logical reset—not a “recession rally,” but a clearing of pessimism. The fundamentals never really cracked. After weeks of gloom and fear-driven headlines, the market is simply exhaling.
Investor sentiment hit a historic low last month. The AAII survey logged 11 straight weeks of net bearish pessimism, nearing the 1990 record ahead of the Gulf War. Then, as now, a single headline flipped the switch. A potential breakthrough in trade policy may have been the catalyst. Historically, when the S&P 500 rises 18% or more over seven weeks, as it did by May’s end, average returns over the next year exceed 27%.
That’s the short-term view. But beneath the surface, a deeper shift is underway.
We’re witnessing a structural regime change in markets. For decades, monetary dominance shaped everything: central banks set the pace, inflation was the constraint, and interest rates the signal. That era is over.
In its place: a new order driven by what we call the Four Fs:
- Fiscal dominance: Government spending, not private credit, now primarily drives economic growth. Inflation becomes a feature of nominal expansion, not a constraint.
- Financial repression: Rates are kept below inflation, shrinking real debt and funneling capital into policy-favored sectors. We’re seeing emerging signs in bank deregulation efforts, changes to crypto stablecoin rules, and national infrastructure projects.
- Passive Flows: Index funds allocate capital automatically, amplifying momentum and muting traditional price signals.
- Fiat money: Currency, untethered from anything physical, has become programmable. It now serves as a tool to shape GDP, not just measure it.
These forces have existed individually. But never all at once, and never at this scale. They are not temporary distortions, they are structural. That’s why once-reliable signals like the inverted yield curve in 2023 or high equity valuations no longer carry the same meaning. In this new environment, first-principles thinking matters more than ever.
The implications are significant: capital is being channeled into equities by design. Policymakers are managing nominal growth, and passive flows are accelerating that transmission.
If this sounds unfamiliar, consider the alternative: relying on static models built for a world that no longer exists. The old models aren’t broken, it’s the map that has changed. That’s why we’re positioning accordingly, owning only the highest-quality companies, favouring strong price trends, and leaning into parts of the market we believe are most likely to benefit from this new regime.
This is about more than just participating in the rally. It’s about understanding what’s driving it, and where it’s going.
As always, we’d be happy to explore what this means for your family, your capital, and your future. We’re currently taking on a small number of new relationships, particularly:
- Households with $1 million or more in investable assets
- Ontario-based lawyers
- Founders and early adopters in crypto and digital assets
If that’s you or someone you trust, we’d be glad to connect.
Model Portfolio Highlights
Growth Portfolio: No changes in May.
American Growth Portfolio: We trimmed gains in Tesla and initiated a new position in chipmaker Advanced Micro Devices.
Income Portfolio: We maintained exposure to U.S. financials, exited defensive utilities, and added a diversified Canadian position focused on financials and precious metals. We see U.S. financials well-positioned as deregulation advances.
Our approach targets opportunities with a significant margin of safety with minimal risk of permanent loss. Patience remains essential in realizing long-term gains.
For questions about your portfolio or to schedule a meeting, please contact us. Thank you.
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
June 2025 Update
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Markets rebounded sharply in May, with our Growth portfolios posting strong gains and the Income portfolio advancing as well.
Much like the rallies of 2009, 2018, and 2020, this one is fast, forceful, and, to some, surprising. But to us, it’s a logical reset—not a “recession rally,” but a clearing of pessimism. The fundamentals never really cracked. After weeks of gloom and fear-driven headlines, the market is simply exhaling.
Investor sentiment hit a historic low last month. The AAII survey logged 11 straight weeks of net bearish pessimism, nearing the 1990 record ahead of the Gulf War. Then, as now, a single headline flipped the switch. A potential breakthrough in trade policy may have been the catalyst. Historically, when the S&P 500 rises 18% or more over seven weeks, as it did by May’s end, average returns over the next year exceed 27%.
That’s the short-term view. But beneath the surface, a deeper shift is underway.
We’re witnessing a structural regime change in markets. For decades, monetary dominance shaped everything: central banks set the pace, inflation was the constraint, and interest rates the signal. That era is over.
In its place: a new order driven by what we call the Four Fs:
These forces have existed individually. But never all at once, and never at this scale. They are not temporary distortions, they are structural. That’s why once-reliable signals like the inverted yield curve in 2023 or high equity valuations no longer carry the same meaning. In this new environment, first-principles thinking matters more than ever.
The implications are significant: capital is being channeled into equities by design. Policymakers are managing nominal growth, and passive flows are accelerating that transmission.
If this sounds unfamiliar, consider the alternative: relying on static models built for a world that no longer exists. The old models aren’t broken, it’s the map that has changed. That’s why we’re positioning accordingly, owning only the highest-quality companies, favouring strong price trends, and leaning into parts of the market we believe are most likely to benefit from this new regime.
This is about more than just participating in the rally. It’s about understanding what’s driving it, and where it’s going.
As always, we’d be happy to explore what this means for your family, your capital, and your future. We’re currently taking on a small number of new relationships, particularly:
If that’s you or someone you trust, we’d be glad to connect.
Model Portfolio Highlights
Growth Portfolio: No changes in May.
American Growth Portfolio: We trimmed gains in Tesla and initiated a new position in chipmaker Advanced Micro Devices.
Income Portfolio: We maintained exposure to U.S. financials, exited defensive utilities, and added a diversified Canadian position focused on financials and precious metals. We see U.S. financials well-positioned as deregulation advances.
Our approach targets opportunities with a significant margin of safety with minimal risk of permanent loss. Patience remains essential in realizing long-term gains.
For questions about your portfolio or to schedule a meeting, please contact us. Thank you.
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
May 2025 Update
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March 2025 Update
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February 2025 Update
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January 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.