When markets get messy, David Picton doesn’t just feel it—he wears it. “The bags under your eyes grow,” says the founder of Picton Investments, reflecting the long nights and heavy responsibility of helping Canadians invest with greater confidence.
For him, this isn’t just business. It’s personal.
Picton and his team have spent over two decades focused on one mission: helping investors find more certainty in uncertain times. That means rethinking the way portfolios are built—especially now, when the old playbook just isn’t cutting it anymore.
Why the Classic 60/40 Portfolio Isn’t What It Used to Be
For 40 years, the go-to investment mix of 60% stocks and 40% bonds delivered solid results with manageable risk. It worked because stocks and bonds typically zigged when the other zagged, cushioning each other during tough stretches.
But that safety net is wearing thin.
“In a world where stock and bond valuations are more elevated, and where these assets are moving more in unison with each other, a simple 60/40 portfolio becomes more vulnerable to sudden shocks, such as inflation spikes, slowing growth or misguided tariff policies,” Picton warns.1
That vulnerability was on full display in 2022. Stocks fell. Bonds fell. And investors relying on the traditional approach got hit from both sides.
What Canada’s Largest Pensions Can Teach Us
When Picton launched the firm in 2004, he noticed something important: the biggest and best pension plans were already adapting. They were shifting away from traditional asset mixes, adding new strategies that didn’t always move in lockstep with stocks or bonds.
“Many of the best plans focused on mitigating risks by owning a collection of uncorrelated assets—strategies that would either increase in value when stocks or bonds fell or would at least decline much less,” he explains.
These aren’t just theoretical ideas. Strategies like equity market neutral, long-short credit, and merger arbitrage—often used by hedge funds—have proven their ability to smooth out the ride.
The problem? Most Canadian investors haven’t had easy access to them.
Time for a Better Mix: The 40/30/30 Portfolio
Picton thinks the Canadian investment industry has leaned too heavily on the 60/40 mix for too long. And he’s calling for a reset.
“Alternatives offer greater diversification benefits than the traditional 60/40 asset mix that advisors and their clients have mainly defaulted to for decades,” he says.
Globally, investors are catching on. In 2010, alternatives made up just 6% of the investable market. By 2025, that number is expected to hit 24%. In Canada, alternatives now hold $57.4 billion in assets—and they’ve grown 35.6% in just the past year.
Still, Canadian portfolios haven’t kept pace.
Picton’s solution? A new standard: 40% equities, 30% bonds, and 30% alternatives. “We believe investors need to shift assets into different return streams that either better diversify traditional portfolios or enhance their return potential,” he says. “Our product suite of alternatives is designed to do just that.”
Embracing the Bear: A Brand—and Mindset—Shift
Picton isn’t just changing portfolio math. He’s shifting the culture around investing.
This month, the firm has rebranded as PICTON Investments, with a modern new look and a bold message: “Build from the bear up.”
Rather than viewing bear markets as something to fear, Picton sees them as a source of wisdom and strength. The bear becomes a symbol of resilience, adaptability, and preparation.
He’s encouraging advisors and investors to learn from the bear to better prepare for risk, which should help them achieve their financial goals with more certainty.
Looking Ahead: More Resilience, Less Guesswork
Picton isn’t sugarcoating the work ahead. He knows this shift requires effort—from advisors, investors, and his own team. But he’s all in.
“We’re proud of what we’ve done, but we are not at all complacent,” he says. “We are investing heavily in all our processes to continue to improve them because investors have come to rely on us for better outcomes. We take that responsibility very seriously. I will have a lot of sleepless nights if we’re ever not living up to that promise.”
This isn’t just about outperforming markets. It’s about building portfolios—and mindsets—that can thrive through the unknown.
Crisis as Catalyst
The last few years haven’t been easy. But for Picton, they’ve revealed something powerful.
“From crisis comes an opportunity for tremendous improvement and growth,” he says. “In spite of the recent turmoil, the seeds of positive change are starting to take hold and Canada is poised for a better future.”
And that future, he believes, should be built from the bear up.
Footnotes:
1 Picton Investments. "A Case for Alternatives: David Picton's Call to Reinvent Canadian Investing." June 2025
2 Photo: source: Picton Investments
