In today’s market environment, the greatest threat to your portfolio may not be the market itself but how you respond to it. As discretionary money managers, we take on the responsibility of navigating the complexities that markets throw at us. And right now, those complexities are abundant: macroeconomic uncertainty; geopolitical instability and a market that seems to defy gravity. Stocks are rebounding to new highs despite softening economic data, while bonds, once the cornerstone of conservative portfolios, continue to underdeliver. For traditional 60/40 investors, this has been a particularly challenging period.

And the biggest challenge their advisers face today is managing client expectations in a world where traditional portfolio models no longer behave as expected. The 60/40 model, once a reliable framework for conservative investors, has struggled to provide the downside protection it historically offered. Bonds have failed to hedge equity risk and volatility has become more frequent and more emotionally charged.

This volatility doesn’t just affect portfolios, it affects people. Investors become more reactive, more anxious, and more susceptible to the fear of missing out. They want to participate in market rallies but also demand protection from drawdowns. These are inherently conflicting goals, and managing that tension is where the real work of an adviser begins.

Why goal-based investing works in uncertain times

That’s why we’ve shifted our practice toward a goals-based investing framework. Rather than chasing benchmarks or the latest hot sector or stock we focus on helping clients define what success looks like for them — whether it’s

retirement income

, capital preservation, or legacy planning — and then build portfolios designed to meet those specific outcomes.

This approach is especially effective in volatile markets because it removes the emotional element from investing. When clients are anchored to their personal goals rather than market headlines they’re less likely to panic during downturns or chase performance during rallies. It reframes the conversation from “Why aren’t we beating the S&P?” to “Are we still on track to meet your goals?”

For example, someone nearing retirement could be concerned about missing out on the recent

artificial intelligence

driven recovery rally. Rather than reallocating aggressively into tech, we may explore strategies such as structured income notes and dividend payers to meet their required return. That clarity may help them stay the course and avoid the unnecessary risk of owning today’s hottest market segment that may end up as tomorrow’s weakest.

Structured products as tools, not tricks

Structured products often get a bad rap, but when used properly, they’re powerful tools. We position them not as speculative bets but as goal-aligned instruments, whether it’s generating tax-efficient income, protecting capital or smoothing returns.

Since early 2021, we have implemented a range of

structured notes

across client portfolios. A recent performance review of our notes done with one of our capital markets partners (National Bank Financial) showed that they consistently delivered attractive risk-adjusted returns across a variety of market conditions. They have outperformed traditional bonds in many cases, while offering built-in buffers against drawdowns.

Yes, they can be complex but we have found that when we take the time to explain to clients how these notes work, what risks they carry and how they fit into the broader portfolio, clients are far more comfortable with these tools.

Discipline is the edge

In a world where headlines change by the hour and markets swing on sentiment, the temptation to react, to do something, is constant. But successful investing isn’t about reacting. It’s about responding with discipline, clarity and purpose.

I never pretend to predict the future but rather focus on preparing for it with goals not guesses. This means building portfolios that are resilient, not reactive, and using every tool available, including innovative products such as structured notes, to help clients stay on track, even when the path gets bumpy.

  • The distinction between perception and portfolio is more important than ever
  • The bond market’s long slump: What it means for investors

Because in the end, the greatest threat to your portfolio isn’t

inflation

,

interest rates

or even a market correction. It’s abandoning your plan when it matters most. And an adviser’s job is to make sure that doesn’t happen.

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus.

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