Markets don't wait for certainty. And neither, it seems, does Brent Joyce.
On a recent Monday morning already weighted with geopolitical risk, energy price volatility, and a Middle East conflict that is rewriting the macro narrative in real time — this episode of BMO GAM's Open Outcry1 (recorded on April 6, 2026) podcast found Brent Joyce, Chief Investment Strategist at BMO Private Wealth, characteristically measured. Host Bipan Rai, BMO GAM's Head of ETF Strategy, set the scene with precision: President Trump had threatened to bomb Iranian power plants and bridges unless the Strait of Hormuz was reopened (has been, hasn't been) by an unofficial Tuesday deadline. Back-channel ceasefire talks via Pakistan were stalling. Oil markets were absorbing a risk premium no futures curve had fully anticipated just weeks earlier. And yet, the investment case for staying the course — thoughtfully, not blindly — remained intact.
What follows is one of the more substantive market conversations of the year: a frank, data-grounded dialogue between two veterans who understand that the worst time to make a portfolio decision is when headlines are moving by the hour.
The Anatomy of Resilience
Rai opens by pressing Joyce on the word that anchored his most recent client note: resilience. What does it actually mean in a market context, especially one as destabilized as 2026?
"It's across the economy and capital markets," Joyce says. "If we think about households and businesses on the ground, they have been Pavlovian trained. I would say going back as far as back to 2016, you could go all the way back to Brexit if you want to, where we've had disruption, uncertain outcome, if you will, surprise outcomes all the way along, some more awful than others from a humanitarian standpoint. And through it we have seen equity markets in particular move on."
The reason markets move on, Joyce argues, is structural: they refocus on what actually drives long-term value — earnings growth, dividend capacity, corporate expansion. "There has been a muscle toning, a muscle memory if you will, whether that's supply chain shocks, COVID, inflation shock of post COVID, and then geopolitical shocks that have people focused on what does this mean for inflation, central bank trajectory, borrowing costs more broadly in the economy and ultimately for the equity market, earnings growth."
It is a framework that holds even now. But resilience, Joyce is careful to note, is not the same as immunity.
Earnings: Momentum Meets the Fog of War
Margins were solid heading into the conflict. Earnings estimates had been ratcheting higher. Equity markets were broadening — small and mid caps participating, more sectors contributing — on growing conviction in a "bit of a surprise global growth environment." BMO had been on the verge of upgrading its earnings outlook and price targets. Then came the Strait of Hormuz.
"We have been on the cusp of upgrading our earnings view and upgrading our price targets heading into the conflict. We're on pause now as there's fog for sure and we don't want to make any knee jerk reactions both with our portfolios or our forecasts when we've got the kind of volatility that we're seeing these days."
Analysts, Joyce notes, are historically slow to update — but for good reason. "These are bottom-up analysts that are doing this work day to day. And if your company's to report in the next few days or weeks, then you would want to incorporate that new information. But we as macro strategists need to say, okay, these earnings estimates that have been ratcheting higher, we would want to fade a little bit of that in the current environment and expect at least a pause."
The good news: there is buffer. "There's room there for a bit of a haircut to both margins and earnings growth because margins were solid heading into this as well. That still leaves the broader narrative of a reasonably good year intact. The longer this goes, the more damage or permanent damage that possibly happens, the more that starts to slip through our fingers. But at this juncture we don't think it's been long enough or severe enough to knock off the story."
Fixed Income: A Tougher Nut to Crack
Rai notes that inflation concerns are currently outweighing growth fears — a dynamic that typically follows large-scale supply shocks — and presses Joyce on what that means for duration. The answer was frank.
"Fixed income is the tougher nut to crack," Joyce says. "Stocks don't fear inflation, they fear central bank's response to inflation. And so the bond market is a different story. They do fear inflation."
The current environment is compressing rate-cut expectations. Central banks are unlikely to raise rates, but the runway for easing is narrowing as an inflation pass-through plays out over a three-to-nine-month horizon. Shorter-term yields have already moved up in response.
Joyce describes the eventual resolution as self-correcting — but the hard way. "Eventually though the bond market said, well, if this continues, then inflation is not going to be our problem. There's a bit of a self correcting the hard way tough medicine where the growth dampening impact of what is a tax on the global economy, higher commodity prices... All these things eventually will add up and then that tax grates away and we have the growth dampening."
The silver lining: this is not 2022. Bond yields are not starting from zero. "There's some protection just because we come into this with bond yields that aren't at zero like we had seen for many years." A well-structured 60/40 portfolio, Joyce notes, would be roughly flat year-to-date despite the gyrations — a reflection of the value of starting position and diversification.
Positioning: Stocks Over Bonds, Alternatives as Diversifiers
BMO remains modestly overweight equities. The rationale is binary and deliberate.
"If we're asking ourselves between bonds and stocks and alternative investments, then the alternatives look great in this environment as a diversifier and a bit of a longer term play, the stocks can live with the inflation. If we have some resolution, then I want to be in equities because we've done a bit of cleanup on valuations in certain sectors."
On the risk of using cash as a market-timing tool: "I think it's very dangerous to try to use cash as a timing tool here to get in and out. In fact, as you alluded to in the opening, moving minute by minute, headline by headline, that is just not practical."
The regional picture is nuanced. Canada, Japan, and emerging markets had been the outperformers to start the year, levered to a global growth thesis. Technology-heavy US equities were working through overvaluation. Post-conflict, that dynamic has partially reversed — with the US dollar reasserting its traditional safe-haven role, surprising some who had written off that function.
Index Targets: Holding Steady, Eyes Open
BMO published a 7,400 S&P 500 target and 34,000 for the S&P/TSX Composite in December 2025. Both stand — for now.
"I'm still comfortable with that number," Joyce says of the US target. "There's enough buffer in our US equity earnings number... we can still pencil in an earnings growth number that's positive and now we've got some improvement on the valuation front that you roll it all up and it's still a mid single digit view that we would have for the S&P 500 for the full year."
The TSX is arguably more interesting. Energy's 30% year-to-date run — independent of the conflict's eventual resolution — provides a floor. "That story still is intact because of the energy piece... whatever the outcome might be, if it's not a good outcome for the conflict in the near term, well then I could be more reliable that my energy earnings are going to flow through to my benchmark." Pre-conflict, BMO had been considering an upgrade to the high 30s — 37,000, 38,000. That remains on the table.
Gold: Insurance You Had to Buy Before the Fire
Gold's post-conflict sell-off raised eyebrows. Joyce is direct: it is a reset, not a repudiation.
"You can't buy insurance after your house is already half burnt to the ground. And so if you've owned gold through even just the first part of this year, you're up 8% was the number to the end of March. And so on that basis you're like, okay, if somebody told me January 1st that we're going to have a conflict in the Middle East, I probably want to own some gold."
The volatility in bullion is a function of how far it has run — rarefied air, in Joyce's words — not a structural breakdown of gold's hedging utility. "I do think that gold continues to offer that protection in times of geopolitical conflict. But none of these things are a perfect solution."
The Single Most Important Mistake to Avoid
Rai closes with the question every anxious investor needs answered: what is the one thing not to do right now?
"Letting your emotions dictate changes to your investment portfolio," Joyce answeres without hesitation. "There are opportunities in here to rebalance. There are opportunities that are unfolding on areas that have done very, very well. I would certainly be looking to take profits in something that has performed well over the past three, six, even 18 months and recycle those into areas that have lagged a little bit."
For those with gaps in their exposure — gold, energy, emerging markets — the current volatility is a teachable moment. "The risk profile of them isn't something that necessarily to be feared, it's something to be understood and it's a question of how much do you want to have of some of these diversifiers."
Rai frames the conclusion well: "What we've experienced so far in 2026 is more of a setback as opposed to a body blow."
5 Key Takeaways for Investors and Advisors
1. Resilience is earned, not assumed — but the structural case for equities holds.
Markets have been stress-tested repeatedly since 2016. The muscle memory of navigating supply shocks, geopolitical crises, and inflation surprises has created a more durable investing framework. As long as earnings growth — the lifeblood of equity returns — remains positive, the broader narrative survives near-term turbulence.
2. Don't use cash as a timing tool in binary, headline-driven markets.
When outcomes are determined by geopolitical developments that shift hour by hour, attempting to time entries and exits with cash is a high-risk, low-reward strategy. Joyce is explicit: stay invested, stay diversified, and avoid the emotional trap of reactive repositioning.
3. Fixed income is ballast, not ballast and a return engine — inflation changes the calculus.
Bonds are providing modest protection but not generating meaningful returns in an inflation-driven environment. Inflation-protected securities merit attention. The real risk is mistiming the shift from an inflation-dominated narrative to a growth-slowdown one — that transition, when it comes, will matter enormously for duration exposure.
4. Diversification across geographies was the right call — and still is.
Well-diversified investors — with meaningful non-US exposure to Canada, Japan, and emerging markets — are navigating 2026 in far better shape than US-concentrated portfolios. The 60/40 investor is roughly flat year-to-date, a stabilizing data point that advisors should use to anchor anxious client conversations.
5. Gold is insurance you needed to own before the event — but it still belongs in the portfolio.
Gold's post-conflict pullback reflects the price it reached before the crisis began, not a failure of the hedge. For advisors building future-resilient portfolios, the lesson is clear: diversifying assets — gold, energy, alternatives — prove their value in moments like this. The question is position sizing, not inclusion.
The Open Outcry podcast is produced by BMO Global Asset Management. Brent Joyce is Chief Investment Strategist at BMO Private Wealth. Bipan Rai is Head of ETF Strategy at BMO Global Asset Management. Views expressed represent the assessment of the speakers at the time of recording and are subject to change.
Footnote:
1 "The Open Outcry Podcast: Catching Up with Brent Joyce - April 6, 2026." BMO ETF Dashboard, 22 Apr. 2026.
