What Q1 2026 Taught Investors About Volatility and Speculation | Ep. 48

Q1 2026 was volatile, but the headlines weren’t the real story.
 Here’s what actually happened in the markets, and what long-term investors should take from it.

What I cover

•  What happened in Canadian, U.S., international, and bond markets in Q1 2026 
•  Why short-term market drops can look worse than they really are 
•  Why crash predictions are easy to make and costly to act on 
•  The difference between investing, hedging, and speculating 
•  Why productive businesses are different from commodities like gold or wheat 
•  How long-term investors can think more clearly during volatile periods 

Chapters

•  00:00 Q1 2026 in context 
•  01:52 Why quarterly returns only tell part of the story 
•  02:30 What happened in Canadian, U.S., international, and bond markets 
•  04:04 The sharp drop before quarter-end and quick recovery after 
•  05:29 Why market-crash predictions are so tempting 
•  08:16 Why pessimism can sound smart but cost you 
•  12:55 From market review to speculation vs investing 
•  14:03 Farmer, jeweler, and gold examples explained 
•  18:10 Hedging risk vs adding speculative risk 
•  20:15 The real lesson from this quarter 

If you want calmer, evidence-based thinking about money and markets, subscribe for more videos.
 And for a deeper look at long-term investing behaviour, check out my other videos on market volatility and portfolio decision-making.

Website | Youtube | Linkedin

Transcript

Tre 0:00

The first quarter of 2026 was volatile, to say the least. We had lots of different headlines. Let's take a look at what actually happened and what lessons we should learn from it. not the first episode. We've done a quarterly review. I think we did one a little while ago.

Sierra 0:16

Was I part of it though?

Tre 0:17

Yeah, I think so. I'm not sure. But the main reason you're part of it is we just got back from vacation and I need to do my quarterly video. so

Sierra 0:27

two-for-one

Tre 0:28

kind of where I'll still do the video and everything like that, but maybe talking through it with you will cut down on the time it will take me to decide what I need to put in the video. it's April 20th, and normally I like to get my quarterly review video done and dusted by the middle of April at the latest.

Sierra 0:49

Yeah, you're behind. But

Tre 0:50

yeah, with us being away for

Sierra 0:53

a month, almost,

Tre 0:54

almost a month, and it's not one of those videos. I could have done it in advance either, because the. End of the quarter hadn't happened yet and things were all over the place. So it was like, okay, this is gonna be a rush.

Sierra 1:04

I feel like there have been some years where it's a bit later anyway, because you're like waiting for reports and stuff. Anyway.

Tre 1:11

Yeah, I think this might be the latest one. I'll try to get this out by the end of the, well, a video by the end of the week, but we'll see. okay, so overall, what do you think, how do you think the markets were of the last quarter?

Sierra 1:25

Whew. Well, With all my knowledge and checking often as a never, what did I just watch on, TikTok? There was a video, someone was talking about the markets. What did they say? I feel like it was, there were some downs. But also some, Yeah.

Tre 1:47

Yeah. I love how you're looking at me, clearly. Like, I might know, my guy.

Sierra 1:52

I'm just trying to think, remember what other people have said over the last little while.

Tre 1:56

Tell tell me how it impacted your life.

Sierra 1:58

Not at all

Tre 1:59

Good. And that's kind of what I will focus on just shortly is that we all, like advisors often talk,

C0001 2:09

focus

Tre 2:09

on the long term. And then focus on the long term. And then we do like... Quarterly reviews of like what the market did in the last quarter. And that's why I've kind of, if you go back, you, you'll see I've gotten more and more away from just looking at returns and trying to take some lesson to learn from it as well.

Sierra 2:26

Yeah.

Tre 2:26

Because it doesn't do anybody any service. Me focusing on a quarter of returns or even a year of returns, or even three years of returns when we always preach. And that's the thing that matters is long term. Is what you need to be looking at the big picture. Mm-hmm. But that said, let's talk about quarterly. so that being

Sierra 2:47

said, let's just keep going.

Tre 2:49

Yeah. so the Canadian market was up 4%.

Sierra 2:53

Okay.

Tre 2:53

The US market was down two and a bit percent you can see here. Yeah. On the screen. international was, that was up half a percent. Nothing. International was up a little bit or emerging markets was up. Bond market was pretty flat. bond markets go. You would see them a lot less volatile than the equity market for obvious reasons, but I shouldn't say that, they're very differently. Mm-hmm. Bond markets are typically based on interest rates and interest rate expectations. And expectations. And equity markets are completely with everything happening in the world with the war and things like that, there is a concern about inflation and the impact, especially with higher oil prices and things like that. But But that aside, that's kind of why the expectations did jump a little bit for fixed income, for interest rates, going forwards, but

Sierra 3:49

mm-hmm.

Tre 3:49

minor, noTréally something I'd pay attention to.

Sierra 3:51

So is that why US is down? Everyone's mad. Are people mad at the us? I don't even know anymore.

Tre 3:57

I dunno. like 50% of the people are, and a hundred percent people aren't, I don't know.

Sierra 4:03

Oh,

Tre 4:03

it's, yeah, it's, there's no way it adds up to zero. I feel like some people just depending on what the headlines are, that Yeah, they say their mood. Yeah. It's all over the place. but this doesn't kind of take the whole picture because what actually happened was everything was doing very well and then we had a sharp drop, which is what a lot of people would have seen. unlike last year where the sharp drop happened after March 31st. Mm-hmm. or the end of March. So it wasn't on people's statements.

Sierra 4:32

Statements. Oh yeah. I do remember us

Tre 4:33

talking about that. Yeah. So people wouldn't even notice this time. It happened just before that.

Sierra 4:36

Oh,

Tre 4:37

So, And then the recovery happened just after that. So I completely everyone's calling you? No. Well, I've been away. I've

Sierra 4:43

checked your emails? they

Tre 4:44

call it. I did, yeah. I was, yeah. it was gonna take me a few days to get through. Um, but. The, the important thing to note is, again, look at the, look at the big picture, and as I'm, as we sat down here, markets have fully recovered and the s and p map hundred is now setting new pies. Mm. like the drop and the recovery happened so quickly that, I mean, it's almost becoming comical now. Every single drop in the last. Since 2008 has been a major buying opportunity.

Sierra 5:18

Mm-hmm.

Tre 5:18

And the recoveries have been getting quicker and quicker and quicker. a recovery, a drop of 10%, almost 10% would historically, may, may take months and months to recover. And people, you'd be sitting on the sidelines like, oh, is it a good time to mess now? Is it a good time to invest now it's, that seems to have changed drastically.

Sierra 5:38

Do you think that's a knowledge thing? Like people are more. Online. I have so many things I want to say right now, but I'm gonna stop right there, but I have more to say.

Tre 5:47

Oh, keep going.

Sierra 5:48

Okay.'cause I watched a video last night.

Tre 5:50

Okay.

Sierra 5:51

Remember? Do you remember? And I asked you? Okay. I watched a video of this guy who was talking about, he was basically predicting the next big drop. Oh yeah. And He was saying historically in the pattern and he was talking about pattern of every so and so years, and he's like, within eight months. I don't know if I'm allowed to say that. This was some random on the internet I'm not saying say Okay. Because I'm random on the internet. Yeah, pretty

Tre 6:15

much.

Sierra 6:18

anyway, and I was like, is that true to you? And you're like, who? Who knows? Like, there's so many, you kind of were just like, you brushed it off me. But,

Tre 6:28

well, I actually had a. had an email from somebody that I did look at today and didn't reply to yet, but. I get to it, that somebody mentions, they're asking, Hey, if we like they're, the professionals are expecting a deep recession for the US next year, how does that impact your portfolio allocation? And it was like, okay, if I jumped every single time there was a deep recession predicted.

Sierra 6:58

Deep

Tre 6:59

You, every single recession, Every single year. It's like Michael Burry is the, the guy that predicted the 2008 crash and he's been right like 20 out of the last five recessions, like it's he. Every single year it's gonna be the end of the world, and eventually you're right, right. Broken

Sierra 7:18

clock is Okay. Yes. This is where what we talked about, where it was like, yeah, you're right a hundred percent of the time if you predict it every single day. Like I said, if you woke up every morning and said. Today I am gonna be diagnosed with cancer. And then in 30 years you're 60 and you get diagnosed with cancer. You're like, I knew it. I was right. It

Tre 7:35

was

Sierra 7:35

like, well, you were wrong all the other times, but,

Tre 7:37

but you was right that one time. And, and that's kind of, eventually it will happen eventually there. that will happen.

Sierra 7:42

Yeah.

Tre 7:43

Whether it's next year, this year, two years time, three years time, nobody actually knows.

Sierra 7:49

Mm-hmm.

Tre 7:49

And The history has shown the cost of being the pessimist is high. It is very high to be, And people say that you sound smarter being the pessimist.

Sierra 8:03

Yeah,

Tre 8:03

but the optimists make money.

Sierra 8:05

Ah,

Tre 8:05

so to view it as,

Sierra 8:06

because I did think that guy sounded pretty smart. I was like, wow, absolutely. This guy knows some stuff.

Tre 8:10

Yeah, absolutely. but in reality, it's the opposite where humanity has done a pretty good job of certain things and making new stuff and being. Um, productive and industry and things like that and making stuff and consuming stuff. Humanity's done a pretty good job of that. So buying the global market, that's kind of the bet you're taking, you're betting that humans will continue to be innovative, will continue to do those type of things. Mm-hmm. Now what's the ride gig be like in the short term, anybody's guess?

Sierra 8:48

Yeah. Well that was kind of leading me back to my first question of, Shoot. I just had it in my head, Whew. just puff of air and then it's gone. what were we talking about the, oh, I asked, do you think that's because of knowledge? Because the comebacks are coming up quicker that it, when there's a low, it seems that, it seems that people are buying in again and driving the markets back up.

Tre 9:14

Yeah, and a lot me of

Sierra 9:16

look in, so it's

Tre 9:17

true, a lot of quote unquote smart money. So hedge funds and things like that have been left holding the bag a lot more now than they used to be.

Sierra 9:26

What does

Tre 9:26

that mean? Whereas they would, they would bet on the market going down In the markets make a very significant jump and they're left losing a lot of money because of it, because everything says the market should go down.

Sierra 9:39

Mm-hmm.

Tre 9:39

But the reality is people are still buying. And when you look at the way that the market's constructed and how much money goes into things like index funds and things like that, that are buying and pension funds that are buying, no matter what there is, there are always people buying. And then there's, mm-hmm. I think the knowledge helps a lot, but there's other people that use them as buying opportunities and that's meaning that the rebounds or, I think it's part of it anyway.

Sierra 10:06

That's what I was wondering is how that, how do I explain this? How does that affect, guess it's new information because we've never been. In a situation that we're currently in the, sorry. But, you know, let me, how, how do I construct this thought people are buying when the markets are low. That's been a thing that you should do forever. But it seems based on the markets and like you say, the recoveries and stuff are happening faster, that people are actually doing that now. Does that make sense? Yeah. It's like happening faster. So then I'm wondering. Like what, I guess what does that mean for the future? Because that's something that hasn't necessarily been happening before. is there gonna be a big crash or is there, are people not gonna panic in the masses or whatever? Because everyone kind of has heard about the rules and has been researching, and

Tre 11:08

I think there's a lot more people doing good things with their money than they used to be. That's

Sierra 11:14

what I'm, yeah.

Tre 11:14

Making better decisions. And I think that does. The actual answer to your questions. I, don't know. I don't think it really changes what you as a person should do about it. Yeah. Beyond what we already knew prior.

Sierra 11:30

Right. I'm just saying it's interesting how people, even that guy, sorry to re-reference the TikTok guy, but he was saying like, historically, and like based on previous information. And while that's important, I find in anything, there's al also the flip side of history doesn't always dictate the future to the to the ex, to the exact, I should say. Like humans are, they repeat a lot of things. It's true, but I'm just saying there are some differences. So it's kind of interesting to see,

Tre 12:01

well, every single time is different this time.

Sierra 12:03

Yeah.

Tre 12:04

And it depends on the way you're looking at it. Let's say there is a crash.

Sierra 12:07

Yeah.

Tre 12:08

So what.

Sierra 12:09

Yeah.

Tre 12:09

Right. Like if you are, you should be invested in a way that that isn't gonna financially ruin you.

Sierra 12:17

If

Tre 12:18

you are not in a, investing in a way that, that's not completely devastating to you, and I don't mean emotionally, I'm talking like actually financially devastating to you, then, then you should be making different decisions, right?

Sierra 12:32

Yeah. Or talking to somebody who's helping you make those decisions better.

Tre 12:36

Yeah. It's. Yeah. Anyway, I'm getting sidetracked. Sorry I too much time on this part. I talk about short term returns, then we spend ages on it.

Sierra 12:44

Yeah. It's'cause I wanted to talk about that other thing.

Tre 12:48

okay, so that was, that was the this quarter. As I said, as of right now, markets, the US is up, new record highs, everything is up. Like it never happened. But what I wanted to talk about very briefly was in my last. So sort of been March's email, like my monthly email that I send out.

Sierra 13:08

Mm-hmm.

Tre 13:08

I made the comment that it was about speculating with, I mentioned Bitcoin and precious metals. they lost a lot of, a lot of money very quickly'cause people were speculating that they would continue to go up, et cetera.

Sierra 13:24

Oh, I'm interested in the precious metals. So they went down really

Tre 13:28

quick. Yeah, they did. Yeah. yeah.

Sierra 13:29

Uhhuh. I'm just. Keeping that in my, I'm, you know, I've been, getting a bracelet made.

Tre 13:36

Okay. Hold that thought.

Sierra 13:37

Okay.

Tre 13:38

So, so I was talking about the difference between speculation and investing and what financial markets when they are, when it comes to commodities. So commodities are like items mm-hmm. Things like gold is a commodity.

Sierra 13:51

Yeah.

Tre 13:51

Something like wheat is a commodity.

Sierra 13:53

Is Bitcoin a commodity?

Tre 13:55

Yes. Okay. Technically yes.

Sierra 13:57

Okay.

Tre 13:58

So what the financial markets are designed for when using these type of things. So it is a, it is a hedge of risk. So that means that you as a business owner, you have some type of risk and you're trying to minimize that risk. Mm-hmm. So the best way to describe it is, I thought a few examples. One would be a farmer. Let's say I'm growing a bunch of wheat. And the, I'm concerned that the price of wheat might drop significantly. I might buy a financial instrument that allows me to sell that wheat at a certain price.

Sierra 14:37

Oh, I think I've heard about this.

Tre 14:39

Yeah.

Sierra 14:40

insurance.

Tre 14:41

Basically it's like a financial insurance that that's what your,

Sierra 14:44

yeah.

Tre 14:44

your Yeah, basically that's what it's,

Sierra 14:48

yeah.

Tre 14:48

So you can, you can buy something like that. You can, and that's, you trade them. called futures. Anyway, you trade it and you hope basically to be able to sell at that price. If the market's dropping, if they go up, you've kind of given up some of the upside. that's basically what it's for, is to mitigate a certain, risk that you have jeweler, for instance, when it comes to gold, or I also have a client that works in a lab and they use gold like bars for their science stuff.

Sierra 15:21

Ah,

Tre 15:21

But they, they're they're utilizing the asset, right? The the commodity.

Sierra 15:27

Yeah.

Tre 15:28

They may go and, because the concern is what's your story with the jeweller, thing?

Sierra 15:34

I am having a bracelet made. I started this process back in August. It's April. I did tell the jeweler like, no rush at all. Like, take your time, take your time. They're holding me to that. I've noticed. So no hate because I did say that, but I've also been watching the price of things and I'm like, oh, they better not try to be like,'cause we talked about the price and I was a little worried that because everything's gotten more expensive, they might be like, oh, the new price is actually this or whatever. And I'm like, well, okay, there's, there's, take your time. And then there's, I might fight them on that a little bit'cause that's a lot of time. But anyway. I, digress. nothing has happened, so I'm not, I'm not jumping ahead. So

Tre 16:16

in this sense,

Sierra 16:17

in case they're listening,

Tre 16:18

so in this sense, the jeweler could have went out and bought insurance for that price of gold so they could lock in that price of gold today.

Sierra 16:29

Yeah.

Tre 16:30

Okay.

Sierra 16:30

Well, I, and I did technically does it, is it the same thing that I put a deposit down on?

Tre 16:35

No, it's a business risk. The price of that commodity. They've given you a set price.

Sierra 16:40

Okay.

Tre 16:41

If, it, if that price changes, they might have put into the language that it's subject to market pricing or whatever, but if that price changes, it's on the business, so that is a risk of the business. You would then go buy a financial asset to offset that risk. If it was, that risk was catastrophic. And it works in all industries.

Sierra 17:00

Mm-hmm.

Tre 17:00

Airlines with fuel, you do the same across the board. You hedge risks and that is what commodity financial assets are for. It's for head hedging risk. And now when we get to gold, one of the biggest hedges that gold has done very well historically against has been the overall markets.

Sierra 17:22

Hmm.

Tre 17:22

So buying gold to offset some of the risk in a portfolio is one thing. Buying gold because you hope somebody else is willing to pay more is quite another. Mm-hmm. One of them is risk management, the other one is speculation.

Sierra 17:38

Yeah.

Tre 17:38

You're hoping that there's just somebody else out there.

Sierra 17:42

Do you know what I'm, why I'm smiling?

Tre 17:43

No.

Sierra 17:44

I thought you'd know her hope chess.

Tre 17:46

Yeah. Well,

Sierra 17:48

it's me. I'm like, oh, I hope they don't see that my queen is ready to be taken by their pawn, but if they don't, I'm gonna win.

Tre 17:57

Yeah. So you, are, you are implementing, you are inserting a very different type of risk Sorry, what? that.

Sierra 18:05

I'm gonna start crying now. Sorry. my cough is like really bad when I can't stop it. gets

Tre 18:11

that's okay. so yeah, so a hedge reduces an existing ridge, an existing risk. A speculative trade adds a new risk Mm-hmm. to it. Okay. Oh yeah. So in that case, what I could do if I just wanted to make money from that wheat thing is I could go buy the same thing that the farmer would've bought without any wheat to sell. Hoping that the price of wheat drops, I can then buy it for, let's say I locked in$10. I could then go buy it. for eight because it's dropped, and then I make$2 on it. Yay. That's an investment. That is not an investment. That is a gamble. Speculation. Very, very different types of risk. So key here is not that precious metals are bad, not that. Gold is good or bad or anything like that, or these financial instruments don't have a incredible value when used properly.

Sierra 19:02

Mm-hmm.

Tre 19:03

But the stock market is something that you can turn into gambling very easily.

Sierra 19:08

Really. Wow.

Tre 19:09

And that line blurs for a lot of people. The casino has pretty good odds if go do the roulette table, right? Like it's, it is. Better odds than some, than some things if you are wanting to gamble. But I don't want people to get it construed that you buying something and hoping it goes up without a, it is just very different buying a productive business. A productive business has, has the potential to grow profits. It has, there's more to it behind a productive business and buying a stock of a company than buying. Buying an object. Like wheat or even gold. Gold, yeah. Is in that gold's a little different because it does bear a line a little bit because us as humans have just decided it's valuable.

Sierra 19:59

This, I don't understand that. I really don't get it.

Tre 20:02

We need something. And that's kind of what we've used for a long, long, long time. So, you know, I, I can see how that could,

Sierra 20:10

I don't see it. the

Tre 20:11

blur lines could be blurred a little bit, but in essence it's regardless. It's the facts. Are the facts. Yeah. It is speculation more than the other side investing. So what you'd learn from this quarter is that obviously long term is more important than short term. markets will go up and down. That's kind of a given. also looked at the difference between a hedge and a speculative trade and why you're making an investment decision is important. Anything else that I would say?

Sierra 20:49

Basically all I'm hearing is when you asked me at the beginning what happened this quarter, I was right. I was like, there were some ups, there were some downs. That's That's all I hear.

Tre 21:01

yes, you was correct.

Sierra 21:04

See,

Tre 21:05

yeah.

Sierra 21:05

That's That's all you need to know. There's always ups, there's always downs. But

Tre 21:10

yeah,

Sierra 21:11

life goes on. Just kidding.

Tre 21:13

Okay,

Sierra 21:13

I'm done.

Tre 21:15

Okay. anyway, I think that's where we will end it.

Sierra 21:18

Okay. See you in the next one.

Tre 21:21

Bye

Sierra 21:21

bye.