No Worries
Companies with negative earnings are currently outperforming those with positive earnings, materially. The good news is that this never ends badly, so there is definitely nothing to see here.
In all seriousness, this is one of the most challenging environments we have seen for active equity managers, and a good reminder why passive exposure is valuable in portfolio construction. The companies throwing caution to the wind are reaping almost all the market returns. Some of those companies will be rewarded in the long term; many will not. The tricky part, knowing the timing will never be perfect, is understanding your exposure to these trends and being willing to trim them before the reversal.
Taking on the Challenge
A classic 2005 talk from Jeff Bezos that dives into the value of persistence in business and in life. Many of the products we take for granted today exist because of individuals who saw opportunity in the mundane and wanted to improve the world around them in some small way.
One of the most pernicious obstacles to invention is learned helplessness…most humans are so remarkably adaptive that they see right through problems. But great inventors are bothered by ordinary things. They wake up every morning and think things like “this shower is terrible”
2026 Global Family Office Report
We always like to review this annual UBS study on asset allocation among large family offices. It isn’t meant to be prescriptive, as the aggregation of data loses family-level nuance, but it can be helpful in identifying trends. Unsurprisingly, given the environment, there are more families adjusting asset allocations this year than is typical, with infrastructure and hedge funds seeing bigger tilts than in recent years.
AI: The ROI Runway Could Be Long Outside the Tech Sector
We are probably verging on broken-record territory when it comes to the implications of artificial intelligence (AI) adoption, but it is the most important variable both in valuation and in the broader reshaping of labour markets currently unfolding.
This short visualization of where things stand is well worth a click.
So far there are no signs of profit margins rising outside the tech sector. This is ultimately what we are waiting for, because the value of AI companies today rests entirely on the promise that margins in the S&P 493 will eventually climb.
A Million New Millionaires
In 2025 global personal wealth rose 10.8%, while median wealth actually declined in most regions. If there was ever data to support the “K-shaped economy,” this is it. The wealthy have continued to compound gains in the post-COVID-19 era, while the average family is struggling with inflation. This is the type of data that drives policy decisions so expect to hear more on this topic over time.
Closing the gap with Measurement-Based Care
A little bit of promotion for Capitalize for Kids here. Measurement-Based Care (MBC) is the gold standard in youth mental health treatment, and our charity, Capitalize for Kids, is working to deploy MBC across Ontario. The Globe and Mail published this piece on their efforts recently.
Kids need our help more than ever, and community mental health agencies are struggling to keep up with demand. We make it possible for therapists to treat more kids while we improve the system, helping over 200,000 kids and families access vital mental health services each year.
Gallant MacDonald is a Private Investment Office serving a select group of ultra-high net worth families who have made significant contributions to business, public service, and philanthropy.
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