Staying the Course Without Standing Still

A mid-year note from Harmony Financial Solutions

The headlines have been loud lately. The war in Iran, the political churn, and just last week, the news that Canada's economy slipped into a technical recession after a second consecutive quarter of negative GDP growth. If you've been feeling a little uneasy, you're not alone.

I want to take a few minutes to share where we are, what we're doing, and why your portfolio is holding up well despite the noise.

The world looks chaotic. The economics actually don't.

It's easy to conflate geopolitical turbulence with economic disaster, but they're not the same thing. The companies we hold for you have solid balance sheets. They're profitable. They're navigating this environment with discipline.

And while Canada's Q1 GDP came in at -0.1% annualized — meeting the technical definition of a recession — the early read on April already points to a rebound, helped in part by rising oil and gas activity. Even the "recession" headline deserves an asterisk: per capita GDP actually rose last quarter, and several economists are pushing back on the label itself. The picture is far more nuanced than the news lets on.

Inflation isn't just a tax — it's a tailwind for the right companies.

When prices rise, that money doesn't disappear. It flows somewhere. Quality companies with pricing power — the ones that can quietly raise a $14.99 item to $19.99 — capture much of that increase in their margins. Those margins are a meaningful part of why your portfolio has earned the returns it has this year.

We're not waiting for inflation to go away. We're holding companies that benefit from it.

Real assets are doing the heavy lifting too.

We've been deliberate about exposure to real assets — oil and gas, natural resources, and precious metals. In a world with rising tensions and currency uncertainty, gold has done exactly what we hoped it would: act as a counterbalance. And in an environment where energy security has returned to the forefront, our exposure to traditional energy has rewarded patience.

One thing worth saying plainly: our hedge is not crypto. It's not the latest digital currency story. It's gold and traditional energy — time-tested tools that have protected wealth through far worse periods than this. In a world chasing shiny objects, sticking with what works is its own kind of edge.

A word on benchmarks.

I hear it sometimes: "How are we doing against the benchmark?" Fair question — but the answer is more complicated than people realize.

The S&P 500 is the benchmark most often quoted in headlines. But it's 100% U.S. equities, in U.S. dollars, with no bonds, no alternatives, no hedges, and no Canadian exposure. Nobody I work with has a portfolio that looks like that, and for good reason. You're diversified across geographies, asset classes, currencies, and strategies— including long/short positions and alternative income sources. Measuring that against a single equity index is comparing apples to oranges.

If we benchmarked your portfolio purely against the S&P, we'd have to abandon the bonds, the hedges, and the international diversification that protect you when markets turn. That would actually increase your risk. The diversification is the point — and it's working.

Active management, in plain English.

What does it mean that we're "actively managed"? It means we're following the money. We're watching where capital is moving across the global market and adjusting the holdings underneath — even when the names of the funds in your statement look the same.

Passive investors ride the wave. We're steering the boat to catch it better.

Where passive index investors are simply along for the ride during this inflation cycle, we're actively hunting for the companies and assets that profit from it. That's how we add value. It's also how we smooth out the ride — fewer surprises, fewer dramatic swings, more confidence that the strategy is working in the background.

Where we stand.

Year-to-date returns look strong across the diversified strategies we manage. We're sticking with what we know. We're not venturing into territory we don't understand. We're not chasing trends. We're following the playbook that has served you well, and we're adapting it thoughtfully to the moment we're in.

The world will keep being loud. Our job is to keep it from being your problem.

As always, if you have questions or want to talk through anything specific to your situation, please reach out. That's what we're here for.

Warm regards,

Harmony Financial Solutions

This email is provided by Harmony Financial Solutions Inc. for informational and educational purposes only and does not constitute investment, financial, tax, legal, or insurance advice. It has been prepared without regard to your individual objectives, financial situation, or needs. Any views expressed are opinions as of the date of publication and are subject to change without notice; forward-looking statements are not guarantees of future results. Information is drawn from sources believed to be reliable but is not guaranteed for accuracy or completeness. Before acting, consider the appropriateness of any information for your circumstances and consult a qualified advisor, and where relevant a tax or legal professional. Past performance is no guarantee of future results. All investments involve risk, including the possible loss of principal.