Mid-Year Investment Outlook: Assessing U.S. Tariffs, Inflation, and Market Volatility

With inflation gradually easing and interest rate cuts unfolding at a measured pace, the global economy is navigating the second half of 2025 with cautious optimism. At the same time, evolving trade discussions and U.S. tariff measures are adding some complexity to market dynamics.

L-R: Co-Chief Investment Officers, Mitchell Prothman and Thomas Nowak

While these factors have introduced a degree of volatility and brought more attention to supply chain considerations, markets remain resilient overall, says Thomas Nowak, CFA, Co-Chief Investment Officer at Alitis Investment Counsel.

“In times like these, headlines can amplify short-term noise,” Nowak says. “Our focus is on staying grounded in fundamentals and looking beyond immediate market reactions.”

A disciplined approach to volatile markets

Alitis’ investment philosophy is built around long-term discipline, diversification, and active management. Rather than chase short-term gains or speculative trends, the firm focuses on alternative investments that help reduce exposure to market swings. This includes real estate, mortgages, and liquid alternatives – assets that aren’t as directly impacted by equity volatility or geopolitical headlines.

“We don’t try to time the market,” says Mitchell Prothman, CFA, CFP, Co-Chief Investment Officer. “Instead, we look for relative value and opportunities that are durable over a three to 10-year horizon.”

Real assets in focus

Treanor Terrace (Ironclad Treanor LP) located in Langford, BC is a holding in the Alitis Private REIT.

In 2025, Alitis’ real estate and mortgage investments have provided steady, if slightly subdued, returns for Class D units (as of May 31, 2025):

Alitis Private REIT: ~3 per cent YTD

Alitis Private Mortgage Fund: ~1.6 per cent YTD

The strategy centers on holding multi-family apartment buildings in growing secondary markets, such as Victoria, Edmonton, Ottawa, and Winnipeg – places where demand remains strong, particularly among younger professionals who choose to rent rather than own.

While condo and townhome resale markets remain soft, rental markets are proving resilient, especially in well-located mid-range buildings. “It’s not flashy,” Prothman says, “but it’s consistent – and in times like these, that matters.”

Reassessing the equity landscape

Alitis views the U.S. stock market as overvalued, with current metrics echoing conditions seen in 2021 and even the early 2000s – periods that were followed by significant downturns. The firm sees more sustainable value in Canadian and European markets, and within selective U.S. multinationals that generate a large share of revenue internationally.

“AI hype is inflating tech valuations, but many of those companies still aren’t generating real revenue,” Nowak says. “Investors need to ask: what’s priced in, and what’s real?”

For clients, the biggest challenge today isn’t the volatility – it’s the temptation to react emotionally. That’s where the role of a trusted advisor becomes critical.

“Having someone to help you stay the course is incredibly valuable,” Nowak says. “Markets will always fluctuate. But disciplined, diversified portfolios – built around long-term fundamentals – have staying power.”

Alitis’ client-first approach reflects that philosophy. From award-winning service in the Comox Valley to transparent, relationship-based advising, the firm’s commitment to planning and clarity helps clients stay grounded – especially when global risks are accelerating.

“We’re living in a time where ‘a decade of financial change happens in weeks,’” Prothman says. “But if your portfolio is built right, you don’t need to panic, you just need to stay focused.”