Q2 2026 – Market Volatility is Normal

My wife and I have always travelled with our kids ever since they were very young. Before each trip, we sit down, tell one another we love each other and remind ourselves that surprises are guaranteed to happen. We discuss the typical issues: flight delays, sick kids, lost luggage, change in flight plans and as many what-ifs as we can think of. We even agree that things can happen that we cannot plan for, because when they do, we are often good-to-go. Even the time we spent an overnight in Toronto Pearson Airport arrivals area (not in the gate area) during a winter storm when every local hotel was sold out. True story. Our kids refer it to as the “Toronto Adventure”, even though they never stepped foot out of the airport.

We do not know what will cause the next significant stock market downturn, but when it happens, it should not be a surprise.

Market Volatility Is Normal

Volatility is a feature, not a flaw. Market downturns often feel like something has gone wrong. Volatility is simply the price of admission for long-term growth. The years that feel uncomfortable and the ones that feel exceptional are both part of a healthy, functioning market. The issue is rarely volatility itself. The real risk is being unprepared for it.

Over a typical 10-year investment period, the equity investment experience is remarkably consistent: two years you’ll love us, two years you won’t, and six years will feel fairly unremarkable. In practical terms, markets tend to deliver two standout years of strong returns, two difficult years of meaningful declines, and six years of more moderate, average performance. This pattern isn’t random; it’s the natural rhythm of long-term investing. And it reinforces an important reality: investment results will vary, often widely, from year to year. Understanding this dynamic is one of the most valuable perspectives an investor can have.

One of the more interesting observations from the past two decades is this: I can count on zero fingers the number of times when broad market sentiment was clearly positive and that optimism translated into strong investment outcomes. In practice, that environment rarely exists. Instead, we tend to see two more common scenarios.  The first is what we’re experiencing today: markets are performing well, yet the prevailing tone in the media and among investors remains cautious or outright negative. Despite strong returns, it doesn’t feel particularly good. The second scenario is the opposite. Markets are declining, and sentiment turns decisively negative. This is typically when the urge to make changes feels strongest, when it seems like action is required. Coincidentally, it’s often the exact moment when staying the course matters most.

Planning for the Inevitable

The solution isn’t to predict which years will be strong or weak. No one can do that consistently.

Instead, the focus should be on building a strategy that accounts for all ten years, including the challenging ones. In the end, successful investing isn’t about avoiding volatility. It’s about being prepared for it.

I hope our “Toronto Adventure” was our last and only “Perfect Storm” travel blip, but I doubt it. My wife and I never discussed that exact scenario, but we knew our day was coming. Our kids slept well. Ask me one day how I jimmy-rigged their beds from items you can only find in the arrivals area. They woke up rested to egg sandwiches and hot chocolate from Starbucks. For weeks, my youngest daughter told everyone who would listen that she “camped overnight at an airport”. The experience didn’t derail the trip; it didn’t even slow down our future travel plans—it became part of the story. Investing works much the same way.

Markets will rise and fall. The investors who succeed are not those who predict the swings, but those who are positioned to endure them.

If you would like to connect for a full review or just a quick call to discuss your financial plans, you can reach Sum, Kayla, or myself anytime. You can also schedule a convenient time directly in my calendar using our online meeting scheduling tool. 

Kind Regards,

Christian