More noise

During the sordid history of this pathetic blog, we’ve seen a lot.

It started in 2008. Yikes. When Millennials were 24 years old, instead of being near death (as today). When Stephen Harper was PM. George Bush was the US president. Americans liked us. Drake was a pimply kid actor on Degrassi.

Back then the US housing meltdown was in full flower. The credit crisis was about to hit. Wall Street banks were about to explode, topple and shock. We had a recession. Rob Ford smoked crack. Then came Trudeau. The pandemic. Russia invaded Ukraine in 2014. And in 2022. Oil prices tanked, then soared. Interest rates plunged to near zero, then swelled 1,400%. Deflation during Covid turned into crippling inflation two years later. Trump won, lost, then won. Now we have tariffs, potential recession and houses nobody can afford. The loonie rose to 82 US pennies and fell to 68. Household debt exploded, and stock markets clocked new highs.

In short, it’s been a ride. And what comes next will be another chapter. Not the end of days. And maybe not even memorable. Just more noise.

This is a way of saying the investing principals guiding you through the last 16 years that this blog has been turning out daily drivel and featuring hundreds of canine pinups, worked. The average rate of return on a balanced and diversified portfolio has been in the 6-7% range. That is shockingly consistent with the past seven decades.

So where are we now?

It looks like life is about to get more expensive, and volatile. Yeah, again.

New car prices may be rising by up to $12,000, thanks to the Trumpian tariffs. If the orange guy does it tomorrow, we’ll have layoffs followed by a recession – which is too bad since growth in the last quarter of 2024 was robust. Some outfits will be harder hit than others, since a large amount of their revenue comes from the States. Especially in the energy sector. Here are some candidates, identified by Syntax Data.

This just underscores the additional risk investors face.

So as we await Tariff Man’s latest childish, misguided, junk-economics move, it would be wise to ensure your RRSP, your TFSA, that joint non-reg account with your squeeze, the kiddo’s RESP and the weirdly generous FHSA all are America-resistant.

First, be diversified. Do not buy individual equities, no matter how much smarter you think you are than The Street. You’re not. Look at the list. Darlings like Suncor, Enbridge and even the banks could feel the White House sting, let alone the car guys and every corp that feeds them.

Invest through index ETFs, exchange-traded funds. They are liquid, low-cost, easy to move in and out of and provide a huge amount of diversification.

Second, remember that advice given over and again to maintain a fifth or more of your portfolio in US$-denominated assets? Hopefully you now know why. The dollar recovered a little today but that might not last if tariffs, recession, layoffs and inflation plague us. This currency roller-coaster will continue, and with the Anerica-first guy in charge down there, actively trying to gut the rest of the world, the greenback is likely to remain strong.

Thurd, Canada is a great place, but accounts for less than 5% of world markets. We live here. We get tax breaks for investing here. But you need global exposure. Only a third of the 60% growth assets in your overall portfolio should be Canadian. Avoid home country bias.

Fourth, seek some balance. Bonds and other fixed-income securities are boring as Adele, but can still be worth holding. If sustained tariffs are countered by another series of interest rate drops then bond values will rise as equities go the other way. Over the sweep of a lifetime – which is how you should view all financial investing – combining balance with diversification wins.

Recently we gave you portfolio weightings. Do it. Rebalance your investments every year, at least. Sell winners and use the gains to buy losers. Keep the weightings stable and steady. Don’t get greedy. Do not become morose. Above all, do not be afraid. Don’t run to cash. Do not let them win.

Finally, be most careful if you’re a DIY investor, jerked around by the daily headlines, the misinformation oozing out of X or TikTok or the narcissistic, bloviating talking heads on BNN (except Ryan, of course – he just likes bringing their mugs back to the office). It’s probably better paying a tax-deductible 1% to a pro to manage your stash than making costly, emotional and kneejerk decisions.

Let’s leave those to the Yankee president.

About the picture: “This is Ocean, unfortunately she left us way too soon, at 1.5 year old she recently passed due to an aggressive cancer,” writes Boris. “I hope she gets a mention, and gets immortalized on your blog. Even though time with her was cut way too short, the time we did spend with her will be cherished in our memories forever.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’

Source: https://www.greaterfool.ca/2025/03/03/more-noise/