In his Q2 2025 market update, Paul Punzo, VP of Portfolio Strategy at IPC Private Wealth, highlights how markets faced significant volatility early in the quarter. On April 2—now referred to as “Liberation Day -
the announcement of new U.S. tariffs triggered a sharp market selloff, with the S&P 500 falling over 10%, its steepest drop since 2020. This decline was driven by growing concerns about deglobalization and its potential impact on global economic growth.
Despite the rocky start, markets showed resilience. By May, they had rebounded strongly, with many indices returning to near-record highs. Trade tensions eased following the announcement of new U.S.-U.K. and U.S.-China trade frameworks, and Canada set a trade deal deadline with the U.S. at the G7 Summit. However, new geopolitical tensions in the Middle East have raised fresh concerns about inflation and energy prices.
Portfolio Strategy
Turning to portfolio strategy, Paul explains that IPC Private Wealth continues to prioritize diversification to manage risk and uncover new opportunities. Portfolios remain overweight in U.S. equities and underweight in Canadian and international markets. While U.S. equities have underperformed recently, Canadian and international stocks have helped boost returns.
The Importance of Diversification
Some investors are questioning their U.S. exposure, often due to patriotic sentiment or economic uncertainty. But Paul emphasizes that the U.S. economy remains strong, supported by solid consumer spending, low unemployment, and leadership in sectors like AI, healthcare, and cloud computing.
Paul concludes with a key message: staying invested through periods of uncertainty is essential. Investors who remained committed after “Liberation Day” were rewarded by the market rebound. This reinforces the value of a long-term perspective and a well-diversified portfolio.
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