This concentration, driven largely by the artificial intelligence frenzy, raises important questions for families transitioning from operating a single business to managing a diversified portfolio—especially as they consider the tax implications of that transition under evolving policy frameworks.

Quality Over Concentration

When I asked Peter how the KJH Strategic Investors Fund supports families moving from concentrated business ownership to portfolio management, his response was characteristically direct:

“We focus on selecting and owning the best businesses in the world. These businesses dominate their space, have leadership positions, high market share, and generate copious amounts of free cash flow with strong balance sheets.”

The Fund maintains disciplined diversification. This quarter’s contributors reflected that breadth:

• Large-cap technology stocks like Shopify, Nvidia, Alphabet, and Oracle captured AI-driven growth
• Canadian banks including Royal Bank, CIBC, and Bank of Montreal benefited as Canada’s economic outlook showed signs of stabilization
• Materials sector holdings such as Agnico Eagle, Newmont, and Teck Resources participated in commodity strength, particularly gold

The A-Student Portfolio Approach

Peter uses a compelling analogy: “Think about a C student versus an A student. A C student might get an A on one exam—that’s a fluke. But when you get a student who consistently delivers A’s on every report card, that’s what you want. These are the companies we want to own—they deliver time and time again.”

This resonates with our family business clients. Just as they wouldn’t sell their operations because of a quarterly earnings miss or macro headline, we don’t abandon quality businesses for short-term market noise—or political theatrics.

Thinking Like Business Owners

What distinguishes our approach is how we think about portfolio construction. “We’re not going to sell an entire company because Trump tweeted something,” Peter explains. “You have to think about owning these businesses as if you own the entire company—not just some shares in a portfolio.”

This ownership mentality—thinking in years, not quarters—aligns naturally with families accustomed to building value over generations. Our team conducts extensive due diligence: reading filings, meeting management teams, visiting facilities, speaking with competitors and suppliers. This deep research provides conviction during inevitable periods of volatility.

The Margin of Safety

When discussing risk management, Peter emphasized our fundamental approach: “We always ask ourselves—if we’re going to be wrong, do we get our money back? That’s our first question. Because we know if we’re right, we’ll make a lot of money.”

This margin of safety thinking protects both financial and emotional capital—critical for families navigating the transition from operator to investor. As Peter noted, “Good companies do well in great economic times, and during bad parts of the cycle they actually get stronger while competition struggles.”

An All-Seasons Approach

For families building comprehensive wealth strategies, the KJH Strategic Investors Fund often serves as a core equity allocation within a diversified portfolio that includes fixed income, alternatives, and other asset classes managed by our team.

“What you’re picking for the strategic fund—that could be a big part of someone’s entire net worth allocation,” Peter explains. “You can sleep at night with all those names.”

This complements our other strategies, including the KJH Technology & Growth Fund, which has delivered 31.76% year-to-date performance through October 2025, providing families access to both established quality and emerging innovation across market cycles.

Looking Forward: Beyond the Magnificent Seven

As Q4 unfolds, we remain focused on identifying excellent businesses across sectors—not just the handful of mega-cap names dominating headlines.

“We believe AI is here to stay and will change the world in more ways than we can imagine,” Peter notes. “But the winners will not be confined to 7 names or 10 names. There’s no guarantee that the massive amounts of capital dedicated to this space currently is being allocated in precisely the right way.”

The Long Game: Trust That Endures

As families gather this upcoming holiday season to reflect on legacy, succession, and the year ahead, consider what truly creates lasting wealth. It’s not quarterly performance or market timing. It’s not reacting to the federal budget announcement or next month’s policy shift.

It’s owning excellent businesses, thinking long-term, and staying invested through complete market cycles.

“If you missed the five best days in the market, you’ve pretty much missed the entire year,” Peter reminds us. “That’s why you have to stay invested through the cycle.”

At KJ Harrison Investors, our fiduciary approach and deep bench strength—backed by the resources and scale of Harbourfront Wealth’s $12 billion platform—allow us to serve families through transitions that span generations. From the sale of an operating business to thoughtful portfolio construction and ongoing management, whether you’re navigating new tax legislation, considering succession strategies, or ensuring your portfolio reflects both growth and prudent risk management, these conversations benefit from advisors who understand both business and investment landscapes.

Policy will change. Markets will fluctuate. Headlines will alarm. But the principles that build and preserve generational wealth remain constant: discipline, quality, patience, and partnership with advisors who are in it for the long haul—just like you.

That’s our commitment. That’s how we earn trust. And that’s how wealth endures.

This piece reflects our Q3 perspective with performance through October 31, 2025. Past performance does not guarantee future results. All investments carry risk, including potential loss of principal. Please consult with a qualified advisor before making investment decisions.