Investment portfolios should evolve.

Markets change. Interest rates change. Inflation changes. Tax rules change. Client goals change. The investment tools available to advisors also change.

A portfolio that made sense ten years ago may not be the right portfolio today. That does not mean abandoning discipline or constantly chasing the latest trend. It means being willing to refine the process when better tools, better research, and better planning opportunities become available.

At Evergreen Wealth Management, our approach to portfolio construction is built around one central idea:

A portfolio should not simply try to “beat the market.” It should be designed to help a client achieve a specific financial outcome with an appropriate level of risk.

For some clients, that means long-term growth.
For others, it means reliable retirement income.
For others, it means preserving family wealth across generations.
For business owners, it may mean coordinating personal, corporate, retirement, estate, and tax planning.

The right portfolio depends on the person, the family, the structure, and the plan.

Many traditional portfolios are built using a simple model: divide assets among stocks, bonds, and cash, then spread those investments across sectors and geographies.

That approach can still have value. Diversification matters. Asset allocation matters. Risk management matters.

But for high-net-worth investors, executives, and business owners, a basic model portfolio may not be enough.

A more complete investment strategy should consider:

• The client’s time horizon
• Income needs
• Tax position
• Corporate or holding company structures
• Retirement goals
• Estate planning objectives
• Liquidity requirements
• Concentrated business or employer stock exposure
• Tolerance for volatility
• Need for downside protection
• Access to alternative investments
• Coordination with accountants, lawyers, and other professionals

The portfolio should not sit in isolation. It should connect to the broader financial plan.

At Evergreen Wealth Management, we believe portfolio construction should be intentional, disciplined, and personalized.

Our investment process is built around five principles.

Before deciding what to invest in, we need to understand what the money is supposed to do.

A retiree drawing income from a portfolio has a very different risk profile than a 42-year-old business owner investing retained earnings inside a corporation. A corporate portfolio may have different tax considerations than a personal non-registered account. A family with significant real estate exposure may need a different investment structure than someone whose wealth is mostly liquid.

That is why the starting point is not:

“What fund should we buy?”

The better starting point is:

“What role does this capital play in the client’s life?”

Once that is clear, the portfolio can be designed around the client’s actual needs.

Not all investments are created equal.

When we evaluate individual companies, funds, or private market opportunities, we are looking for quality. That means understanding what we own and why we own it.

For individual companies, quality may include:

• Strong business model
• Durable competitive advantage
• Capable management team
• Healthy balance sheet
• Consistent cash flow
• Attractive return on invested capital
• Reasonable valuation
• Clear role within the portfolio

The goal is not to own everything. The goal is to own investments that have a clear purpose.

A portfolio with too many holdings can begin to look like the market itself. That may reduce the value of active decision-making. A more focused approach can allow for deeper research, stronger conviction, and more intentional portfolio construction.

That does not mean concentration is appropriate for everyone. A focused portfolio can carry more volatility and may not be suitable for clients who need higher income, lower volatility, or greater capital preservation.

Many investors focus on return first. We believe risk should be considered first.

The most important question is not simply, “How much can this portfolio make?”

It is:

What could go wrong, and can the client financially and emotionally withstand that outcome?

Risk is not just short-term volatility. Risk can also include:

• Permanent loss of capital
• Sequence-of-return risk in retirement
• Lack of liquidity
• Tax inefficiency
• Overconcentration
• Inflation risk
• Interest rate risk
• Currency risk
• Business or employment risk
• Behavioural risk during market declines

A portfolio can look good on paper and still be wrong for the client.

For example, a growth-oriented portfolio may be appropriate for a younger investor with a long time horizon. But the same portfolio may be inappropriate for a retiree who is withdrawing income and cannot afford a major decline at the wrong time.

This is why suitability matters.

A traditional portfolio may rely heavily on public stocks and bonds.

Those asset classes remain important. But in certain cases, qualified investors may benefit from a broader toolkit.

Depending on the client’s objectives, risk tolerance, liquidity needs, and suitability, this may include:

• Public equities
• Fixed income
• Structured notes
• Private credit
• Private real estate
• Infrastructure
• Alternative investment strategies
• Cash and short-term instruments
• Corporate investment accounts
• Insurance-based planning strategies

The purpose is not to make the portfolio more complicated. The purpose is to create more ways for the portfolio to work.

Different assets can behave differently in different environments. Some investments may be designed for growth. Others may be designed for income. Others may be designed to reduce volatility or provide downside protection.

The right mix depends on the client.

Performance matters, but it needs context.

A portfolio should not be judged only by whether it beat a single index over a short period of time. That can be misleading.

A better review considers:

• Return
• Volatility
• Downside protection
• Income generation
• Tax efficiency
• Liquidity
• Risk-adjusted return
• Progress toward the client’s financial goals

For example, a portfolio designed for retirement income should not be judged the same way as an aggressive growth portfolio. A portfolio designed to preserve capital during retirement should not be compared blindly to the S&P 500.

Benchmarks can be useful as reference points, but they are not the client’s financial plan.

The real question is:

Is the portfolio helping the client achieve the outcome we designed it for?

One way our investment process has evolved is through the use of more focused equity research.

Rather than relying only on broad sector-based allocations, a focused portfolio approach allows us to identify what we believe are higher-quality opportunities across sectors and geographies.

This can provide several benefits:

• Greater conviction in each holding
• More intentional portfolio construction
• Less unnecessary overlap
• Clearer understanding of what drives performance
• More active risk management
• Better ability to monitor valuation and company fundamentals

However, focused portfolios are not appropriate for every client.

They can experience more volatility than traditional diversified portfolios. They may produce less income. They may have sharper short-term swings. They may not be suitable for retirees or conservative investors who require stability, liquidity, and reliable withdrawals.

The key is matching the investment approach to the client’s plan.

*Alternative investments can play an important role in some portfolios, particularly for high-net-worth clients who qualify and have the right time horizon.

Alternatives may include areas such as private credit, private real estate, infrastructure, private equity, or other non-traditional strategies.

The potential benefit is that alternatives may provide sources of return that are not perfectly tied to daily public stock and bond markets.

They may help with:

• Diversification
• Income generation
• Reduced portfolio volatility
• Access to private market opportunities
• Long-term compounding
• Downside resilience in certain market environments

However, alternatives are not risk-free. They may have liquidity restrictions, valuation differences, higher complexity, and suitability requirements.

This is why alternatives should not be used simply because they sound sophisticated. They should be used only when they serve a clear purpose within the broader plan.

Structured notes can also be useful in certain client portfolios when used appropriately.

They can be designed to provide specific investment outcomes, such as enhanced income, partial downside protection, or exposure to a market or basket of investments under defined terms.

The benefit of structured notes is customization. The risk is that they can be misunderstood.

Before using structured notes, investors should understand:

• The underlying exposure
• The term of the note
• The income or return formula
• The downside protection level, if any
• The credit risk of the issuer
• Liquidity before maturity
• Tax treatment
• How the note fits within the broader portfolio

Used properly, structured notes can be part of a thoughtful portfolio. Used poorly, they can add complexity without improving the plan.

Fixed income is still important, but the role of fixed income has changed.

For many years, bonds were viewed as the safe part of the portfolio. But rising interest rates reminded investors that fixed income can also experience meaningful volatility.

Today, fixed income should be used with more intention.

It may serve several roles:

• Income generation
• Capital preservation
• Liquidity
• Volatility reduction
• Liability matching
• Dry powder for future opportunities

The right fixed income allocation depends on the client’s stage of life, income needs, tax position, and risk tolerance.

For a retiree, fixed income may help support withdrawals.
For a business owner, it may provide liquidity inside a corporation.
For a younger investor, it may provide balance during volatile markets.

Again, the key is purpose.

Consider a business owner who has accumulated wealth in three places:

• Personal investments
• Retained earnings inside a corporation
• Significant value in the operating business

This client may be financially successful, but their wealth is highly concentrated. Their income, corporate assets, and future liquidity event may all be tied to the business.

A generic portfolio may not properly account for that.

A more thoughtful approach would consider:

• How much liquidity should remain inside the corporation
• Whether corporate investments should focus on income, growth, or tax efficiency
• How the personal portfolio should complement the business risk
• Whether alternative investments are appropriate
• Whether permanent insurance or estate planning should be reviewed
• How retirement income may eventually be drawn
• How the portfolio interacts with the accountant’s tax planning
• How much volatility the client can tolerate before and after a business sale

The result is a portfolio that is not just “balanced” in a generic sense. It is balanced around the client’s real financial life.

Many investors believe they are diversified because they own multiple funds, ETFs, or accounts. But when we look underneath, they may own the same companies repeatedly.

True diversification requires understanding what you actually own.

A retiree’s income portfolio should not be judged the same way as an aggressive equity index. Benchmarking can be useful, but only if the benchmark is relevant.

After-tax returns matter. A portfolio that looks strong before tax may be inefficient once interest, dividends, capital gains, corporate tax, and personal tax are considered.

A major decline during the early years of retirement can have a lasting impact, especially when withdrawals are required. This is known as sequence-of-return risk.

Cash provides safety and flexibility, but excess cash can become a drag on long-term wealth creation if it sits idle without purpose.

Alternatives, structured notes, and private investments can be valuable, but they must be understood and properly sized.

Portfolio management is not a one-time exercise.

A client’s portfolio should be reviewed as markets change, tax rules change, and life circumstances change.

At Evergreen Wealth Management, this may include reviewing:

• Asset allocation
• Risk level
• Portfolio income
• Concentration risk
• Tax efficiency
• Corporate and personal account structure
• Retirement income needs
• Liquidity requirements
• Alternative investment exposure
• Rebalancing opportunities
• Changes in family or estate planning goals

This is also why communication matters. The portfolio should not be a black box. Clients should understand what they own, why they own it, and how it fits into their broader plan.

A strong investment portfolio is not built by accident.

It requires discipline, research, risk management, tax awareness, and a clear understanding of the client’s goals.

The best portfolio is not always the one with the highest short-term return. It is the one that gives the client the highest probability of achieving the outcome they care about, while taking an appropriate level of risk.

For some clients, that may mean a more growth-oriented approach.
For others, it may mean a more conservative income-focused portfolio.
For others, it may mean blending public markets, private markets, structured notes, and tax-efficient planning.

The right answer depends on the full picture.

At Evergreen Wealth Management, our role is to build and manage portfolios that are connected to that full picture.

Evergreen Wealth Management helps business owners, executives, retirees, and high-net-worth families build investment strategies connected to their broader financial plan.

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*Alternative Investments are not suitable for all types of investors. Please obtain independent professional advice, in the context of your particular circumstances.

This information has been prepared by James Hogan who is an Investment Advisor/Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor/Portfolio Manager can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.