At some point it’s going to need to be ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ View Online Investor Insights Steve Katuska — Chief Investment Officer September 25, 2026 How to prepare your portfolio for (nearly) everything Hi there, Investing in markets always requires carefully navigating ambiguity; there are no obvious trades. However, the talk of choppy waters ahead is elevated right now, so I wanted to address how to make sure you’re well-prepared for whatever comes next. The world is currently navigating conflict in the Middle East, the potential for a return to interest rate hikes, and possible cracks in continued AI exceptionalism. But you'll be ready for any market turmoil, no matter the specific cause, if your portfolio is built around the right principles. While professional investors make great effort to see what’s around the corner, the truth is that nobody can reliably tell you when the next crash is coming. Stocks have had an exceptional run over the last four years, and some market participants and forecasters are questioning current valuations of recent high performers — and what they imply about the required future growth of those companies. While calls for an impending stock market crash happen regularly, the current discourse is quite loud and not entirely without merit. What we can tell you is this: at some point, markets will drop, sharply and probably without much warning. The investors who come out fine on the other side aren't necessarily the ones who saw it coming. They're the ones who were already prepared for it. So rather than try to predict the next crash, we put together a checklist to help you prepare for one. Think of it less as a reaction plan and more as a pre-crash inspection — the kind of thing you do before the storm, not during it. Are you taking on an appropriate level of portfolio risk? Fundamentally, there is no such thing as a “good” portfolio. What’s right for one investor may be materially wrong for another, and the key to figuring out how you should be invested is first understanding your goals and tolerances. Additionally, there's a difference between how much risk you can stomach and how much risk you can actually afford. A lot of investors only discover the gap between the two once markets start falling. If you’re saving for retirement in 30 years, a 20% drop might be fine, but if you need some of that money in the next two or three years — for a house down payment, tuition, or anything else — that money shouldn't be exposed to that level of risk. Do you have an emergency fund? An emergency fund might be the single most underrated crash-proofing tool available to you, precisely because it has nothing to do with your investments at all. A market downturn is stressful enough on its own. But if it happens to coincide with a job loss, a medical bill, or any other unexpected expense, and you don't have cash set aside to cover it, you may be forced to sell investments at exactly the moment they're worth the least. An emergency fund doesn't need to be complicated. It just needs to be there, sitting in something safe and accessible such as a high-interest savings account or short-duration government bond portfolio. This way a bad year in the markets and a bad year in your life don't have to happen to your portfolio at the same time. Are you properly diversified? This one sounds obvious. Most investors know to spread their money across asset classes, geographies, and sectors. Few notice when the diversification they carefully set up quietly erodes. For example, maybe you've built up a large position in your employer's stock through options or an equity plan. Or maybe your self-directed portfolio is heavily weighted toward Canadian holdings simply because that's where you started investing. Maybe one sector, like tech, has grown so much that it now drives the majority of your returns — and your risk. That is exactly why diversification isn't something you check once and forget. It's something you have to actively maintain. As part of our Managed Portfolios, diversification is a feature we build in and constantly monitor, but all investors should look to ensure that money managed by themselves and other asset managers is appropriately balanced. And do you know how to assess when you’re out of balance? Holding a diversified portfolio may be your intention, but markets are always moving. Winners grow, losers shrink, and without any intervention, your portfolio drifts away from the allocation you originally chose. The risk level you're actually comfortable with is not the one you’re practically exposed to, without you ever noticing. The main solution is rebalancing — periodically selling a bit of what's grown and buying a bit of what hasn't, to bring your portfolio back to your target mix. It's not exciting, but it's one of the most reliable ways to keep your risk in check over time. One reason that we systematically rebalance client portfolios is because in the moment – the decision to either buy something that has fallen or sell a recent winner can be clouded with emotion – but rebalancing is a plan to be made in advance, when times are calm, and then stuck to when your portfolio encounters the inevitable choppiness. The other half of a plan is deciding in advance what you will and won't do if markets drop sharply. Will you rebalance at a specific threshold? Will you keep contributing on schedule regardless of what the headlines say? Whatever the specifics, the goal is the same: make these decisions now, while you're calm, so you're not making them in the middle of a crash, when you're not. Are you carrying leverage? For years, savvy investors have used borrowing as a way to meet their goals more reliably. Whether it’s to increase expected returns, or to bring much needed diversification into a concentrated portfolio, leverage is a useful tool. Leverage can come in many forms, but whether it's through a margin loan, a HELOC used to invest, or money borrowed from a relative, this tool also carries risk. Leverage can force you to sell at the worst possible moment. If your investments fall far enough, your collateral may not be sufficient to support your loan, and creditors may require you to post more collateral or sell assets immediately — regardless of whether that's a smart move for your long-term plan. That's how a normal, survivable correction turns into a permanent loss. A simple question worth asking yourself: if markets dropped 30% tomorrow, would anyone be calling you asking for money? If the answer is yes, that's worth adjusting your borrowing and investing strategy well before it becomes urgent. Do you have the right mindset? Losses aren't a sign that something's gone wrong. They're the cost of admission for the returns that long-term investing provides. If markets never dropped, there'd be no reason for stocks to pay a premium over safer assets. This is easier to say than to do. Loss aversion is a well-documented and very human bias: the pain of losing $10,000 registers far more strongly than the pleasure of gaining $10,000. That imbalance can push investors into taking hasty protective action, like selling during a downturn, which tends to just lock in their losses rather than avoid them. A bad quarter doesn’t necessarily mean you have a bad plan. Some investors view a stock downturn as simply a sale on the assets they were already planning to buy. While this may not be true for all situations, it can be a helpful reassurance that most investors are saving for long-term goals. Short-term turbulence doesn’t have to impede your progress materially. The bottom line History has shown that it’s incredibly hard to time the markets, and the most reliable path to building wealth is patience and perspective. A portfolio built at the right risk level, properly diversified, backed by a plan to keep it that way, free of an overuse of leverage, paired with the right mindset, and cushioned by an emergency fund, doesn't need to predict or worry about the next crash. It's already ready for it. As always, if you have any questions or ideas, don’t hesitate to reach out. All the best, Steve Katuska Chief Investment Officer Introducing the best of both worlds Got a lot of conviction about what you own, but no love for your rebalancing spreadsheet? 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