February 28, 2026
Welcome back. In the past year, and particularly over the last couple months, I’ve had many versions of the following conversation:
“Philip what do you think about Trump/various armed conflicts/excessive government debts/etc.?” Frequently these concerns have been amplified by the most negative media I’ve ever seen, although they certainly are serious issues. Turning to stock markets this same set of worries usually expands to include record-high valuations, a sharp rise in speculation and now outright betting on virtually anything. As I discuss these and similar issues, frequently the final question is a version of: “Philip, given all these problems, why is our portfolio at all-time highs?”
What a strange and interesting time we’re living through! Without minimizing any of the worries listed above, stocks in many countries are behaving as though things were only good and on their way to much better. History shows these moments have happened in the past, but they are uncommon and have frequently preceded dramatic economic and market changes. It is rare to find uncertainty and markets simultaneous at levels as high as we face today.
While history has taught us a great deal as investors, it cannot forecast the timing of major shifts very well.
Lately I am noticing some alarming parallels between today and prior eras which produced corrections and recessions, which explains much of our short-term caution on the stock market. Most of the speculative excess applies less in Canada and remains primarily centered in the US – which is arguably also the source of most of the uncertainty. These are not ‘normal’ times…
The price of gold is also reinforcing my view on the extreme worry/extreme risk-taking dynamic. Gold has historically done best during riskier times, especially when governments have overspent and encouraged inflation while jeopardizing their ability to remain solvent. Investors who have owned gold usually are protected or at least hedged against these risks, and I would argue this risk is higher today than in the past few decades, explaining gold’s recent sharp rise.
All in all, 2026 is likely to bring more drama and market moves which create opportunities for investors who are well prepared in advance. Stay tuned and we are always happy to chat with you about any of this.
Have a great month and take care.
Philip
Last month we saw BC’s provincial budget released. The reviews, to put it mildly, weren’t kind. While no budget will ever please a majority of the population, this one seems to have attracted sharp criticism from most analysts.
In this recent Financial Post article linked below by Kim Moody, we find a good summary of the concerns and implications for the province if we continue down the road we are currently on.
Kim is a tax expert with extensive experience and a deep understanding of our tax code, along with government finances at both the federal and provincial levels. His recommendations for policy and tax fairness are widely published across the accounting field.
As you’ll read in the article, he’s not impressed by BC’s financial report card of last month and carefully points out the risks we are taking with the present policies. By including this article I’m not picking on BC, many jurisdictions around the world are pursuing similar unrealistic plans which have and will continue to disappoint taxpayers and voters.
By many measures the US federal government is following a similar trajectory, as spending constantly outpaces revenues in recent years. Lately we’re seeing the US dollar start to weaken, partly as a reflection of their deteriorating finances. History tells us a return of inflation is the probable next step, as desperate governments attempt to avoid the reality of arithmetic by ‘inflating away’ the true cost of all the debts they’ve incurred.
This can work for a while, but unfortunately the biggest costs of this choice usually land on the lower and middle class.
https://ca.finance.yahoo.com/news/try-frame-budget-nice-way-110045085.html?guccounter=1
In the early 1990’s I was busy building my client base and spent a lot of time meeting with prospective new clients.
One of my favorite memories of this period was meeting a woman whom I’ll call Sandra. We had a few good phone conversations, and after several weeks we agreed to meet to review her financial situation and current investment holdings.
I arrived at her house and was ushered into a very nicely decorated living room. We covered world affairs, economic trends, and her goals for the future. I sensed she was comfortable with my answers and the discussion was positive — until she asked the following: “What is your birthdate?”
After I told her she simply said ‘Taurus’ and changed the subject. A few minutes later I left, and I didn’t hear from her the following week despite her promise to call. I then called her and eventually we had a brief chat, in which she let me know she could never work with a Taurus.
To this day I wonder how her investments have done. Hopefully Sandra found a compatible advisor and it’s possible using astrology as a guide has improved her life choices.
I was reminded of this experience after reading the article linked below by Joe Wiggins. Investing faces so many influences that no one style can be the ‘best’, nor can we rule out all approaches which seem odd – sometimes they work.
This article highlights/exposes the methods of investment commentators who always have the answers. People who know how to push the buttons inside our brains will always find a willing audience and can use their persuasion to sound wise despite having nothing substantial to offer.