Tariffs, Risk + Volatility & A New Interview w/ Purpose Investments' Som Seif!

What happened this week?

I ended last week’s Commentary by saying that the stock market has taken a second breather in the wake of a the flurry of rapid-fire statements, pronouncements, and executive orders devoid of clarity on tariffs, which has since triggered such extreme uncertainty that the Global Economic Policy Uncertainty Index rose above 400 - as high as it was when Covid struck in 2020.

In an era of economic flux and market volatility, alternative investments have emerged as a cornerstone of portfolio construction, offering the potential for diversification, resilience, and enhanced returns. Yet, navigating this terrain requires expertise and a nuanced understanding of its complexities. Ash Lawrence, Head of AGF Capital Partners, and Scott Radke, CEO and Co-CIO at New Holland Capital, share their thoughts on the landscape, the recent launch of AGF NHC Tactical Alpha Fund and how to navigate alternatives strategies.

Since 1950, the investment portfolio has remained largely unchanged. In that time, the phone has evolved dozens of times. The light bulb has been reimagined. The car, electrified. AI is revolutionizing entire industries. Yet, portfolios still follow the same blueprint—rigidly anchored to a 60/40 split between stocks and bonds, a structure built for a bygone era.

Last week brought another wave of volatility to the markets, with investors grappling with mixed economic signals, geopolitical developments, and ongoing trade policy uncertainty. While the headline jobs report appeared solid, the household employment data told a more concerning story, with a sharp rise in the U-6 unemployment rate—one of the largest non-recessionary spikes on record. This divergence reinforces the need to monitor labor market softness as a potential early warning sign of economic deceleration.

Excitement surrounding the current bull market seems to be reaching a crescendo. Individual investors who were very fearful of equities at the beginning of the bull market in 2009 are today historically bullish and willing to take extreme portfolio risk.

Recent US economic data are coming in softer than expected. Should that trend persist, economists will soon downgrade forecasts for 2025 US gross domestic product (GDP) growth. Downward corporate earnings revisions are already underway. Investors seem more uncertain about the future than usual, and this shows up in a weakened equity market.

“Looking forward, we might see a different return environment for public equities,” Lawrence observes, pointing to post-GFC monetary stimulus as a bygone era. The days of easy gains and low volatility are over. With public equity returns concentrated in a few high-performing sectors and companies, diversification is critical.

Warmer weather means that many animals come out of hibernation. Unfortunately for investors, market bears have also awakened from their slumber. The recent selloff in U.S. stocks continued this week, with the S&P 500 dropping by nearly 3% on Monday, and nearly an additional percentage point today. With the recent market moves, the stock market has now fallen nearly 10% below its all-time highs.

Top Performing

1. Applied DNA Sciences, Inc. (APDN): This biotechnology company experienced a staggering increase of approximately 1,574.31%, closing at $2.15.
2. NanoVibronix, Inc. (NAOV): Specializing in medical devices, NanoVibronix's stock surged by about 537.48%, ending the week at $2.12.
3. SUNation Energy Inc. (SUNE): This renewable energy firm's shares jumped 320.67%, reaching $0.637.
4. CervoMed Inc. (CRVO): Focused on neurological therapies, CervoMed saw its stock rise by 207.09%, closing at $6.60.
5. Regencell Bioscience Holdings Limited (RGC): This bioscience company's shares increased by 170.96%, ending the week at $14.22.

Bottom Performing

1. Know Labs, Inc. (KNW): This company saw a dramatic decrease of 97.20%, with its stock price falling to $0.0856.
2. Springview Holdings Ltd (SPHL): The stock plummeted by 85.40%, ending the week at $0.565.
3. Health In Tech, Inc. (HIT): Experienced an 85.14% drop, closing at $1.10.
4. Wellchange Holdings Company Limited (WCT): The company's shares decreased by 83.58%, with a closing price of $0.509.
5. Hepion Pharmaceuticals, Inc. (HEPA): The stock declined by 69.99%, ending the week at $0.0272.

Bank of Canada's Interest Rate Cut: On March 12, the Bank of Canada reduced its benchmark interest rate by 25 basis points to 2.75%. This marks the seventh consecutive rate cut, aiming to support the economy amid escalating trade tensions with the United States.

Escalation of Trade Tensions: The U.S. imposed a 25% tariff on Canadian steel and aluminum imports, prompting Canada to announce reciprocal tariffs on U.S. goods totaling C$29.8 billion. These measures have heightened concerns about a potential economic slowdown.

Market Volatility: The S&P/TSX Composite Index fell to a four-month low earlier in the week, driven by fears of a prolonged trade war and its impact on economic growth. However, the index showed signs of recovery ahead of Mark Carney's inauguration as Canada's new prime minister.

Leadership Transition: Mark Carney, former governor of the Bank of Canada and the Bank of England, was sworn in as Canada's prime minister. His appointment comes at a critical time, with expectations that his financial expertise will help navigate the country through current economic challenges.

Corporate Earnings Reports: Companies such as Transat A.T. Inc., Empire Company Ltd., and Algoma Steel reported earnings this week. Transat noted a decline in demand for U.S. destinations, reflecting shifting consumer preferences amid trade uncertainties.

Debunking Private Markets: Opportunities & Myths feat. Som Seif, Founder + CEO @ Purpose Investments

In this episode Som Seif, CEO of Purpose Investments, joins us to challenge common misconceptions about private markets. First, we discuss the current state of markets. Seif explains why private assets—private equity, private credit, and private real estate—are becoming essential components of modern investment portfolios. He discusses how institutional-grade private investments have become accessible to retail investors, debunks myths about risk and illiquidity, and outlines how these assets can enhance diversification, generate uncorrelated returns, and offer a more stable investment experience. Finally, we delve into how private sub-advisor managers like Apollo, Pantheon, and BlueRock are taking a significant role in democratizing access to these private market opportunities.

?? WATCH IT HERE

#ThrowbackThursday ?: Corey Hoffstein put it best—if you suddenly decide to load up on alternatives, you’re not just diversifying; you're making a massive implicit market timing decision. Selling stocks and bonds to make room? That’s a long alternatives, short traditional assets move, and advisors know there’s risk there—both for clients and their own careers.The real challenge? Selling alternatives in a world that didn’t want them.

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