Quarterly Commentary – April 2025
Apr 07, 2025
STAYING FOCUSED
Appropriate phrases for the current global financial situation as created by President Trump…
“It’s a riddle wrapped in a mystery inside an enigma!” – Winston Churchill
“The dumbest trade war in history!” – The Wall Street Journal (stated many times recently)
“Canada? We’re picking a fight with our most reliable and pleasant friend, the labradoodle of allies?!” – Jon Stewart
Personally, I like the last one the best! And frankly, there is an argument for some levity right now. But, the reality is we are seeing something we have not seen in generations.
As I have stated in the past, there is no example in history where tariffs and trade wars have benefitted anyone, and they usually hurt the instigator the most. Which leaves me scratching my head as to how President Trump really believes this will benefit the US in the long run.
Yet while these quotes and thoughts may be interesting, the really relevant consideration is how do we invest in the midst of it? There are three key points I’d like to share, that are also central to our investment management strategies.
- Stay away from investing heavily in oil & gas, lumber, mining, steel & aluminum, and manufacturing. This will not fully protect you, but it will greatly reduce your exposure to the trade conflict.
- Focus on companies that are leaders in their respective industries. Companies with large capital positions, and low debt. Companies with strong positive cash-flow and a history of paying dividends. When times get hard, “cash is king”, and you want to be invested in companies with strong balance sheets.
- Do not make investment choices on a whim; stay focused on the long-term. Companies exist to be profitable, and they will find the route to remain as such. Change is generally a short-term issue. If we remain consistent, companies will adapt and find the new way to profitability.
The first point was an area we identified as a concern a few months ago and over the market changes in the past days we were happy to realize our exposure was/is minimal. The second two points are always core areas of focus for us.
As a result, our client portfolios have had much less downward pressure than the broad US and Canadian investment market indexes. As of the close of business April 4th, so far in 2025 (Year-to-Date) the S&P500 in the US is down 13.73%… the TSX in Canada is down 6.21%… the most aggressive of our client portfolios are down ~3.4%… with the majority of our client portfolios down only 1% to 2.3%. Safe to say, I feel we are weathering the storm very well.
At this point I have no idea what President Trump will do, and I do not see any validity to making portfolio changes based on what he might think from one month to the next. I like where/how our portfolios are positioned at this time, and I have confidence in our ability to get through it. We just need to stay focused… in more ways than one!
I hope this information is helpful and gives you continued peace of mind. Should you have any other questions or thoughts, please feel free to reach-out.
All the best,
Bryson
Business Owners
The most overlooked area of financial planning for business owners and incorporated professionals is the lack of integration between corporate and personal assets. When the majority of your assets are in your corporation you need very specific, specialized and personalized financial advice.
Learn More
