How to build a resilient portfolio for the next 5 years

"More than anything, investors are asking for guidance on how to think about risk right now," said Wong. "And we’ve been consistent in the message of not trying to time things."

Instead of reacting to headlines, Wong emphasized the value of diversification across geographies, asset classes and sectors. "Investors should lean in on diversification, invest across countries, sectors, companies, styles, taking a multi-asset perspective across traditional assets and alternative assets if you have access to the right advice."

Equities remain an essential driver of long-term growth even during times of short-term stress. As Wong noted, "Ultimately, earnings growth is what brings the returns for equities over the long run." Over the past 60 years, earnings growth for the S&P 500 has averaged around 7%, which has also been the average price return over that same time.

That kind of historical alignment reinforces a key principle for investors: short-term market movements may feel dramatic, but long-term fundamentals still matter most.

With rising interest rates and concerns about inflation, some investors are questioning whether traditional fixed income still has a role to play. Wong acknowledged the recent volatility in bonds but emphasized their importance over the long term.

"If you plan on being a long-term holder, then bond yields are attractive relative to what we've seen for a very long time," he said. "We touched a low on the 10-year yield in Canada at about 52 basis points back in July of 2020. Today, we're well into the 3% rate for yield, and that's a good thing for long-term returns."

He also discussed the evolving role of alternatives and gold. While gold has performed well amid inflation fears, Wong cautioned that it’s a volatile asset with no inherent cash flow. Meanwhile, alternative investments such as hedge funds, private real estate and infrastructure are becoming more accessible to individual investors through mutual funds and can offer additional layers of diversification.

Given the policy uncertainty in the U.S., particularly around tariffs, Wong noted that some Canadian investors may be rethinking their U.S. equity exposure. However, he pointed out that there are longer-term forces at play that could support U.S. markets, including the advancement of artificial intelligence.

"There's a study by McKinsey that showed that 90% of the firms they survey have adopted AI to some degree, but only 1% say it's mature in its use,¹" he said. "Eventually, that's going to find its way into the economy."

Wong’s advice to investors is grounded in long-term thinking and disciplined portfolio construction. "Have a framework for investing that considers the outcome you need and then put together a portfolio of assets that are purposeful, well-structured, with managers that help you get invested and stay invested," he said.

He also emphasized that volatility, while uncomfortable, isn’t always indicative of true portfolio risk. "Some volatility might not be tied to any real ‘illness’ in the market," he said. "The key really is to study the fundamentals rather than just the outcomes."

In times of uncertainty, it can be tempting to make dramatic changes to your investment approach. But as David Wong shared on the Smart Advice podcast, the better path is often the more disciplined one: diversify broadly, take advantage of a long timeframe if you have one and work with an advisor to build a portfolio that can handle both risk and opportunity.