Amid heightened volatility, one advisor says he's "sitting on his hands"

Wolfgang Klein isn’t doing anything with his positions right now. The senior PM and senior wealth advisor at Canaccord Genuity Wealth Management is known for his investment process including specific stock picks and the employment of a proprietary quantitative model to identify opportunities. While many have treated today’s volatility as a moment to rotate away from US equities into other sectors and geographies, Klein is avowedly holding to his positions and maintaining a focus on the longer-term.

Klein explained why he’s decided to hold these positions, as well as outlining some of the moves he made prior to this volatile environment. He outlined where he sees opportunity now and detailed why he thinks a pivot back to growth is still a real possibility.

“I'm truly sitting on my hands doing nothing, as the market is just too erratic on a day to day basis, so I'm just hanging on with my positions,” Klein says. “But doing nothing is something. Clients want to do stuff. Clients are nervous. Out of a 300-family practice, I’ve had probably 15 clients call me with a curious concern, telling me ‘this time it's different.’ Three of them exited the market, and that is a contrarian indicator that we have marked some pain and time and are getting to a point of a pivot.”

Klein’s confidence begins with the fact that his book is ‘well diversified’ and none of his stock positions are held in margin accounts. That means he doesn’t need to sell into weakness and can stay focused on longer-term time horizons. He notes that many investors have begun to pivot from US into European equities. He sees possible upside in Europe simply as a product of volume. With US markets representing so much more capital than European markets, a relatively small rotation could see a significant uptick. However, he notes a few points of caution about Europe: it’s fractured politically, it’s less entrepreneurial as a business environment, and many of its companies have tended to be less responsive to changing circumstances. As of now, Klein says he’s “not chasing the herd” into Europe.

While he acknowledges that noise from the White House hasn’t been constructive or helpful for North American equities, he highlights some other cyclical factors that play into this market volatility. He notes that typically in the first 60 days of a new congress, markets tend to perform somewhat poorly. Looking seasonally, as well, the period from mid-February to mid-March has tended to be less positive. Because bad political news has been such a force in markets recently, too, Klein notes that things could change rapidly with the political winds.

“Less bad news can get the market going. The market is deeply oversold. Sentiment is extreme bearish, which is bullish,” Klein says. “Donald Trump is hanging out with rich people who are also losing money. They are feeling pain. At some point, the pain will hurt them, and they'll push back on Trump.”

Klein’s confidence in his positions doesn’t mean he’s against tweaks entirely. If he sees a position in a long-term downtrend, he sees value as selling it. But patience is key and he expects that decisions made on such a short time horizon will simply produce regret.

After leading market growth for much of 2023 and 2024, mega-cap technology names like those in the ‘magnificent seven’ have been among the biggest losers in 2025 so far. Klein explains that later last year he trimmed his positions in those names to be underweight mag-seven. Despite that he still sees strong growth opportunities within technology. While some mag-seven names like Tesla may have larger problems underlining their pullbacks, other companies in that category like Apple, Microsoft, and Amazon post profits of $1 billion roughly ever three days. That much profit, he says, cannot be completely written off in this environment. They remain the core exposure to AI potential, too, and play a key role in future economic innovations.

Outside of technology, Klein sees many of the predictable stable sectors doing what they’ve been supposed to in this environment. He highlights Canadian pipelines stocks as well as insurance lifecos as strong fundamental performers right now. Some private equity names, he says, have been under pressure but Klein continues to like the prospects for Blackstone, who he describes as “the smartest asset managers on the planet.”

Looking at the wider span of the market, Klein sees an environment that could turn on a dime, if and when that turn comes, he expects growth themes to make a comeback.

“When you get the pivot, you'll see all the stuff that's held in they will sell off and you will see growth come back in,” Klein says, “Growth isn't dead, and your head will spin to watch how quickly it comes back.”

_{Wolfgang Klein is a Portfolio Manager at Canaccord Genuity Corp (Member: CIPF/CIRO). The opinions expressed are the opinions of the author and readers/listeners should not assume they reflect the opinions or recommendations of CG or its affiliates. Past performance may not be repeated.}