Market Update March 2026
March brings continued complexity in the global landscape, with geopolitical tensions, ongoing trade talks, and policy changes taking the spotlight. Although these factors often create short-term market swings, seasoned investors are accustomed to such fluctuations.
Markets are currently adjusting to slower economic growth, easing inflation, and more predictable interest rates, all amid persistent uncertainty worldwide. Historically, discipline and patience have been rewarded during times like these, rather than reactive decisions.
Canadian Economic Update
Recent data shows Canada’s economy is slowing down but remains steady overall. The fourth quarter saw GDP shrink by about 0.6%, and January’s output stayed mostly unchanged. Economists now forecast real GDP growth to be around 1% for 2026. Job markets continue to show resilience, which has helped keep wage pressures in check, while core inflation trends downward toward the Bank of Canada’s 2% goal. Overall, these conditions point to a cooling, rather than destabilizing the economy.
Bank of Canada & Interest Rates
As inflation declines and economic growth slows, expectations for interest rates have stabilized. It’s now widely expected that the Bank of Canada will soon end its cycle of rate cuts, keeping policy rates between 2% and 2.5%. Meanwhile, ten-year government bond yields are ranging from 3% to 3.5%. This period of stable rates supports balanced portfolios and income-driven investments.
Markets & Global Tensions
The S&P/TSX Composite hit record highs in late February before entering a consolidation phase. Resource sectors have remained strong, while financials and some tech stocks experienced small declines. Internationally, markets remain generally positive but are sensitive to news around geopolitics, trade, and policy. Heightened tensions can lead to quick volatility, especially in commodities, currencies, and globally exposed companies. History shows that markets consistently adapt and progress, overcoming wars, political shifts, and global uncertainty.
Portfolio Adjustments
This month, we made slight changes in our portfolios. We reduced our position in the Dynamic Active Discount Bond ETF (DXDB) by 2%, reallocating that portion to the Bank of Nova Scotia (BNS). DXDB continues to offer investment-grade bond exposure and steady income, while increasing BNS strengthens our equity holdings with a leading Canadian bank known for diversified earnings and appealing dividends. This adjustment aims to boost long-term returns while maintaining controlled risk.
How We Are Managing Risk
During uncertain times, our approach emphasizes portfolio structure over prediction. Our strategies prioritize broad diversification across sectors and regions, high-quality bonds for stability, and solid Canadian firms with reliable dividend income. U.S. exposure is mainly concentrated in top technology names, and roughly 7-9% of portfolios are dedicated to gold for protection against inflation and currency uncertainty. This spread helps cushion portfolios from shocks without forcing hasty moves.
Bottom Line
Global and political developments are likely to arise throughout 2026, prompting short-term market reactions. However, lasting investment success depends on discipline, diversification, and thoughtful risk management not day-to-day headlines. Your portfolio remains designed to pursue steady growth and income with careful risk management.
If you have any questions or need anything, please remember we are always here for you.
