April 2026 - Your Monthly Update

Hi,

 

Hope this note finds you and your family well as we (finally) welcome spring and an enduring thaw from a long winter.

 

Your investment portfolio declined somewhat in March. It remains with positive performance over the last twelve months.

 

Military conflict in Iran drew markets distinctly negative in March. Selling was broad based in reaction to the conflict and heightened preference for excess liquidity from investors. At the same time, earnings growth continued representing a divergence between the positive fundamentals and the negative behaviour of prices. To date in April, markets have performed a full reversal of the declines in what has been one of the most volatile and reactionary short-term periods in quite some time.

 

A cornerstone of our investment process involves identifying enduring trends within the economy. These trends are driven by medium-term fundamentals and data from a wide range of industry and private sector sources. Over a normal period, this is what is reflected in appropriate price equilibrium between demand and supply.

 

Time is also a key element to help solve for the speculative extremes (high and low) that can occur in short periods of time (Recall when oil traded below $0 in March 2020 for a few weeks).

 

Investment by the private sector in their own productive capacity is a trend that’s been with us since 2022. The beneficial refresh of the productive asset base in North America remains in place today. Data points around positive trends in capital investment, order backlogs, and future expectations indicate this wider trend has several more years to run. It remains the single biggest driver of earnings growth as well as the answer to how the private sector in North America continues to do so well in adapting to the uncertainty around global conflict, supply chain, tariffs, and a whole host of other near-term unknowns.

 

The financial foundation of the North American economy through the private sector remains incredibly sound. Earnings in the first quarter are tracking a year-over-year double digit rate of growth.

 

It remains a constructive environment for domestically oriented businesses to continue to execute on their own operations, innovate, grow their earnings, raise dividends and be worth more over time.

 

You and your investment portfolio are well positioned for the future.

 

The view from Brent Joyce, BMO Wealth’s Chief Investment Strategist:

"The opening quarter of 2026 brought more shocks to the global economy and capital markets, culminating with the conflict in the Middle East – capital markets are being resilient... The global economy is buoyed by many factors: reasonable levels of inflation; supportive financial conditions; decreased trade uncertainty; productivity gains; fiscal stimulus, including tax cuts; capital expenditures in AI, defence and infrastructure; deregulation; and signs that employment, manufacturing and housing activity are attempting to exit their recent soft patch… Inflation-adjusted oil prices remain well below historical highs. While the rate of change matters, the U.S. economy is much less sensitive to oil prices than it was 10, 20, or 30 years ago… [T]he peak on an inflation-adjusted basis is over US$200… A lot of what drives capital markets and the modern world is less reliant on fossil fuel energy than in the past (the declining share of old economy manufacturing and the rising importance of services, plus the move toward a knowledge-based and technology-centric economy)… Consumers in the upper 40% of the income spectrum represent the majority of the spending that equity markets focus on; they are much better insulated from higher inflation. All of these factors support continued resilience in equity markets… As the definition of resilience reminds us, resilience requires a bounce back from a setback. We aren’t suggesting all will be calm. A modestly positive year for well-diversified investors remains on the table. Historically, it hasn’t paid off to bet against resilience."

 

• Stocks in your portfolio that made a new 52 week high this past month: Canadian National Rail*, Fortis*, Johnson & Johnson, TD Bank*, Waste Management*

• Stocks in your portfolio that made a new 52 week low this past month: None

• The Loonie declined by one and a half cents versus the U.S. dollar to $0.72

 

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral