Podcast
Playing Defence
Will Simpson and Greg Wise
April 4, 2025
Markets have dropped close to 10% in the last two days. Risk is elevated right now, so our positioning remains defensive and we’ve made moves to protect and preserve capital. Buckle up for a bumpy ride and get ready for more uncertainty. These are the times that eventually present the greatest opportunity and potential upside in markets.
With markets reeling from an unprecedented presidential tariff announcement and the S&P 500 suffering its worst week since the pandemic, we find ourselves staring straight into the unknown. Risk has increased substantially this week and we are governing our portfolios accordingly. As part of our process, we move our portfolios from offence to defence based on changing market conditions.
Trump just reignited the trade war… He’s calling it “Liberation Day.”
The markets? They’re calling it “Liquidation Day.”
The noise really kicked into overdrive this week and every major equity index is deep in the red, with the Nasdaq and S&P both down close to double digits (CAD), and the Russell 2000 shedding over -11%. The Nasdaq and small cap both entered bear markets this week. Canadian and International markets held up slightly better, but not by much. On the sector front, there was no place to hide. Tech got walloped in both Canada and the U.S., while energy collapsed on the back of falling crude, global growth fears, and a conveniently timed supply bump from OPEC.
The average U.S. tariff rate jumped from ~2% to over 20% — a shocking number. There’s already talk of negotiations kicking off with Vietnam, suggesting we may be watching a live-action version of The Art of the Deal. The initial shock has markets recalibrating quickly, pricing in up to five Fed cuts this year as growth expectations take a hit. For now, we’re left navigating one of the most aggressive trade shifts in decades, with sentiment and volatility moving just as fast as the headlines.
We shift our portfolios from green light to yellow light to red light, based on changing market conditions. Risk is elevated right now so our positioning remains defensive and we’ve made moves to protect and preserve captial.
Buckle up for a bumpy ride and get ready for more uncertainty. These are the times in markets that eventually present the greatest opportunity and potential upside in markets.
Feel free to reach out if you would like to discuss your investment portfolio, strategy, or your financial, wealth and retirement plan. We are here working for you.
We want you to Realize Your Wealth™.