Podcast
Risk/Return Ratio
Will Simpson and Greg Wise
January 2, 2026.
A better way to think about risk and return
Markets were somewhat choppier this week, with trading activity still light through the holidays. U.S. equities were mixed following some profit-taking after the year-end rally, though the overall market tone remained orderly. In Canada, the TSX traded sideways, with strength in select sectors offset by weakness elsewhere, while international markets showed a similarly uneven pattern as investors reassessed positioning.
Beneath the surface, leadership remained relatively narrow. Large-cap technology and AI-related stocks continued to drive returns, while more defensive areas such as utilities and consumer staples saw increased attention. Commodities also remained in focus, with precious metals holding firm after recent strength, reinforcing the role of diversification amid ongoing macro uncertainty.
Looking ahead, attention is shifting toward upcoming jobs and inflation data, central-bank guidance, and the early stages of earnings season. With leadership concentrated and valuations elevated in certain areas, outcomes are increasingly driven by where and how risk is taken, underscoring the importance of disciplined portfolio construction, diversification, and risk management as the year begins.
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Happy New Year and looking forward to our continued success as we move into 2026!
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