Navigating the Noise: The "On Again, Off Again" Market

Beginning this week, I will be providing a summary of the IA Financial Economic Review. Sebastien McMahon recaps the news of the week and offers insight into how it impacts our portfolios. View the video here.

---

For leaders and families who have built significant wealth, market volatility feels different. It’s not just a number on a screen; it’s a potential disruption to a long-term vision.

This week, the market’s defining theme was "On Again, Off Again," a concept that perfectly captures the sharp reversals we saw in global trade and commodity markets.

This kind of volatility can be disorienting. It's designed to trigger an emotional, reptilian-brain response.

My role as your Personal CFO is to distill this daily noise into a clear, actionable signal. It’s to separate the headline from the trend and ensure your financial plan—the one we’ve architected together—remains a resilient fortress against these short-term distractions.

Here is my summary and, more importantly, what it means for your long-term stewardship.

What's Driving This Week's Market Volatility?

The "On Again, Off Again" feeling came from two primary sources. Both are excellent examples of noise that we must observe but not be driven by.

First, Canada-U.S. trade negotiations experienced a classic reversal. Early-week optimism suggested a deal was imminent. This was abruptly followed by a presidential announcement that talks were being "terminated."

As our strategic briefing notes, this is widely interpreted as a negotiation tactic, not a fundamental breakdown. While it creates immediate volatility, the underlying pressure within the U.S. to resolve tariffs (which are now causing domestic economic pain) provides a logical reason for long-term optimism. We see the tactic, but we focus on the underlying fundamentals.

Second, the gold market saw its nine-week "parabolic" run come to a halt. After an extraordinary winning streak, the market saw a significant pullback driven by profit-taking. This is not a failure of the asset; it is the natural, cyclical, and expected behaviour when an asset's price climbs too quickly.

A Case Study in Stewardship: What Can We Learn from the Gold Market?

This week’s gold volatility provides a perfect, real-world lesson in disciplined stewardship. It shows the critical difference between reacting to a market and having a plan for it.

The briefing highlights iA Financial Group's disciplined strategy:

1. They had a Plan: They had pre-set milestones to take "very healthy profits" as the price of gold climbed.

2. They Executed the Plan: As the price became "parabolic"—driven more by momentum and emotion than fundamentals—they followed their plan and have now closed their discretionary (i.e., short-term trading) position.

3. They Remain Clear-Eyed: This decision was not based on a lost belief in gold's long-term fundamental drivers, such as central bank accumulation. It was a disciplined, non-emotional exit from a "momentum trade" that had become prone to a sharp correction.

This is stewardship in action. It’s the application of wisdom and process over emotion. It reinforces the philosophy: assets like gold can serve a valuable purpose for diversification, but it should never be allowed to dominate a long-term plan or dictate your emotional state.

How is Canada Architecting its Long-Term Economic Future?

While markets focus on the day-to-day, a much larger, multi-generational shift is being architected in Ottawa.

The upcoming federal budget (November 4th) is expected to announce an aggressive new national goal: doubling the value of Canadian exports to non-U.S. partners over the next ten years.

This is a profound pivot. It is a long-term strategic response to the trade uncertainty we’ve seen over the last decade. The goal is to build a more resilient, diversified Canadian economy that is less dependent on a single trade partner. Achieving this "very aggressive target" will require massive private and public investment in infrastructure.

For us, this is a trend to watch. It signals a new, long-term direction for Canadian policy that could create new opportunities for decades to come.

What Should We Expect from the Bank of Canada and the U.S. Fed?

Finally, in the immediate future, we are expecting more interest rate cuts.

Both the Bank of Canada (BoC) and the U.S. Federal Reserve (Fed) are expected to announce cuts next week.

The analysis suggests this may be the BoC's final cut for a while. The prevailing wisdom is that the Bank will now move to the sidelines to let the new fiscal (government spending) policy from the upcoming budget begin its work. The Fed, in contrast, is expected to continue its easing cycle through the end of this year and into 2026.

From Insight to Action

Geopolitical tactics, market corrections, and long-term policy shifts are precisely why we anchor our work in a comprehensive financial plan. These events are not threats to be feared; they are inputs to be understood.

Our goal is to ensure your plan is resilient enough to withstand the noise, allowing you to focus on your purpose, your family, and your legacy.

Frequently Asked Questions

What does "parabolic" mean in investing?

A "parabolic" move is when an asset's price rises sharply and quickly, with the chart resembling the right side of a parabola. This is often driven by momentum and investor emotion rather than fundamentals, and it is typically followed by a sharp correction.

How will the Bank of Canada's rate cut impact my plan?

For those with variable-rate debt, a cut can provide some relief. For investors, it reinforces the low-yield environment for cash and GICs, strengthening the case for a well-diversified portfolio designed to generate the returns required to meet your long-term goals. We have already architected this assumption into your plan.

Should I change my investment strategy based on this news?

No. Your financial plan was architected with the expectation that volatility will occur. We do not make reactive changes based on weekly news. We make strategic adjustments when your personal goals change, or when a fundamental, long-term economic trend has demonstrably shifted. This week's events do not meet that high standard.

By Rolf Issler, CLU®

Personal CFO for Founders & Families in Kelowna

ProsperWise Advisors