Markets feel unsettled with limited clarity as the Middle East conflict dominates sentiment. Wes Ashton at Harbourfront Wealth Management says the situation is the main force moving prices right now. Positive news on a potential ceasefire has triggered quick rallies, but the overall direction remains uncertain.

Ashton advises against emotional decisions driven by media noise. Instead, investors should stay pragmatic and diversified in line with their time horizon and risk tolerance. “It is really difficult to predict what’s gonna happen here in the short term,” he notes. Chasing oil spikes, for example, can lead to fast reversals when headlines shift.

Traditional stock-and-bond portfolios may not suffice. Ashton recommends expanding to five or six asset classes, including alternatives such as precious metals and commodities. In this environment, the priority is managing downside risk rather than chasing upside. “If we do get a prolonged period of uncertainty, you’re protecting what we’ve earned over the last couple of years,” he says.

Macro factors add further fog. Canada appears in the late stages of rate cuts with less sticky inflation than the United States. The Fed continues to weigh trade policies, tariffs, and the oil spike’s impact on goods and services. Ashton expects rates to stay on hold in Canada in the near term and urges patience until more clarity emerges.

Two markets exist simultaneously: one driven by fundamentals and one by events. Ashton sees solid underlying footing with strong U.S. earnings, but the conflict can override that quickly. If tensions ease, markets should revert to fundamentals, creating opportunities in quality names that have pulled back, such as Microsoft dipping below its 200-day moving average.

For advisors reassessing allocations, Ashton stresses staying invested in the asset class with a clear quality bias. Most clients remain under-allocated to small caps and alternatives. Broad diversification and patience offer the best defense until the event-driven fog lifts.

Source: Video - Navigating Volatility: Positioning Portfolios in Today’s Market