Happy 2026! I hope the new year is off to a great start for you and your family.
Here at The Wong Group, it’s been an eventful January with all of the geopolitical developments and so today we thought we would help provide insight and share our thoughts in anticipation of four or five of the top questions that you may be thinking about when it comes to your investment portfolio and the global markets.
Market Leadership Is Broadening Beneath the Surface
First, I’ll skip to the punchline and provide some peace of mind that despite the scary things happening in the world at large, portfolios are staying resilient. This month we continued to see a trend that has been quietly building beneath the market’s surface: a healthier, broader market.
After several years in which performance was concentrated in a narrow group of seven large U.S. growth companies, the stock leadership is now broadening, meaning that investors are now rotating towards other sectors besides just technology, including smaller, value-oriented companies and international markets. This diversification and shifting of investments is something our group has proactively been doing over the past year and a half already, so this latest market trend is moving in our portfolios’ favour as we continue to focus not on “what’s exciting” but focus on “what’s earning,” seeking real cash flows, and persistent underlying demand.
As a reminder, we take an evidence‑based approach in alignment with such global investment leaders like Dimensional Fund Advisors and Cirrus Research in New York, and adding Blackrock to our roster—leaning into areas of the market that have historically rewarded investors: smaller yet up and coming companies, more attractive valuations, and higher profitability. January’s market behaviour was a reminder that these long‑term drivers still matter.
Please click the button below to watch our January Market Update video for more detailed insights:
Geopolitical Tensions Are Creating Short‑Lived Market Shocks
During the month of January, equity markets were jolted by new U.S. tariff threats aimed at several European nations, continuing a pattern we’ve seen repeatedly over the past year. Whereby markets reacted negatively and sharply to the uncertainty, but then markets rebounded the next day once the administration paused the escalation. I raise this not to address Greenland specifically or predict future policy decisions, but to highlight a pattern investors are seeing more frequently: geopolitical tensions emerging suddenly—often on weekends—followed by rapid de‑escalation. In this environment, staying calm, disciplined, and focused on fundamentals and long‑term growth remains essential.
This brings me to Prime Minister Mark Carney’s recent speech at Davos, did you watch it? Just wow. I encourage you to read or listen to it if you haven’t. His message was direct: the old world is gone, and “nostalgia is not a strategy.” Carney argues that middle powers must act decisively—strengthening domestic resilience, building new coalitions, and confronting geopolitical realities as they are, not as we wish them to be. He reframed Canada’s relationship with the rest of the world, signalling a fundamentally new approach to how our country intends to navigate a more fragmented, contested and uncertain world.
Canada’s Shift Toward Resilience and Global Diversification
In practice, this means Canada is moving forward by accelerating investment at home and diversifying its international partnerships abroad. There is little value in dwelling on past geopolitical arrangements. The world has shifted, and Canada is adapting—building strength domestically, widening its alliances, and positioning itself for long‑term stability in a more fragmented global environment.
Do I love that Canada has been pushed into this direction? Of course not. But I do see it as a path that ultimately strengthens the country long‑term—and one we likely would have needed to take eventually, regardless of the timing.
Staying Steady Through Market Declines:
As we move through the start of the year, I want to address the top five questions I’m hearing most often about the markets. The first one is:
1. Are we at a market peak?
Pullbacks are normal. Since 1927, U.S. markets have seen 20% intra-year declines in roughly one third of all years—yet most still finished positive. The key is to stay invested and avoid turning temporary declines into lasting losses.
Dr. Jim Thorne’s latest Market Insights echoes this view: liquidity is expanding, not contracting, and the economic backdrop remains constructive.
2. Are U.S. stocks too expensive?
Valuations are elevated but not bubble‑like. Today’s tech leaders generate substantial earnings and cash flow. With the “Magnificent 7” largely flat since October and the rest of the market strengthening, breadth—not speculation—is driving performance.
3. Is AI hype?
Artificial Intelligence (AI) is already reshaping corporate behaviour. More than $400B is being invested in AI infrastructure, and adoption continues to accelerate. While revenue benefits will take time, the long‑term productivity gains are real. The key question is whether earnings will keep pace—so far, they are.
4. Should I invest more internationally?
We continue to see strong reasons for global diversification. International markets offer more attractive valuations, improving fundamentals, and the potential tailwind of a weakening U.S. dollar. Exposure across Europe, Asia Pacific, and emerging markets remains a strategic advantage.
5. What about gold?
Gold has surged on geopolitical tension and central‑bank buying. We hold it as a diversifier and hedge-not a growth engine-because it doesn’t produce income and can experience long stretches of underperformance.
Final Thoughts: Smart Risk in Action
Recent market volatility in 2025, particularly in April and November, reminded us that markets don’t move in straight lines. But markets do reward patience, discipline, and quality. Your portfolios are positioned across resilient sectors, income‑producing assets, and long‑term themes like AI and infrastructure.
Thank you, as always, for your trust. We are here to guide you through every twist and turn with clarity, steadiness, and a continued focus on what matters most.
If you have any questions about how this relates to you or your investment portfolio and financial plan, please give us a call at 778-655-2410 or email us at thewonggroup@wellington-altus.ca
Sincerely,
Maili Wong, CFA, CFP, FEA
Senior Portfolio Manager & Senior Wealth Advisor
Wellington-Altus Private Wealth Inc.
Board Director
Wellington-Altus Financial Inc.
