The Canadian stock market topped the 30,000 level for the first time this past week. During the Tuesday session, the S&P/TSX Composite index ended down 143.35 points, or 0.5%, at 29,761. During the session the index traded above the 30,000 threshold for the first time after posting a record closing high on Monday. It has advanced 20.6% since the start of the year. The Canadian market is greatly outperforming U.S. stocks in 2025, but trails the international EAFE index. We’re making new highs on the Sunday Reads.
Of course, this is all more than surprising given that the President of the United States had suggested that he would ruin Canada, economically.
On that note, the Canadian economy ‘bounced back’ in July. Or perhaps we should say limped back. Canada’s GDP increased by 0.2% in July.Things are certainly not good but we might be hanging in there in surprising fashion.
These are short term signs but as per Bank of Canada Governor Tiff Macklem in last week’s Sunday Reads – Canadian equity ETFs for your Canadian portfolio, perhaps Canada does not go into recession but ekes out 1% growth for a while.
A preliminary estimate showed August would most likely see no growth but avoid a contraction, Statistics Canada said, as increases in services-producing industries were likely to be offset by goods-producing sectors.
The last 5 years have been incredible with Canada greatly outperforming international markets and almost keeping pace with the U.S.
Over the past five years, the TSX Composite has offered a 13.3% average return per year. That’s a tad shy of the S&P 500 Index, at 15%. Both are well ahead of the 8.8% average return posted by non-U.S. stocks.
These are unusual returns during unusual times. Noted …
The abnormal returns for the Canadian Asset Allocation ETFs.
The Asset Allocation ETFs offer Canadians global, managed , well-diversified, all-in-one funds for fees in the area of 0.20% (all in). Net, net – enter one ticker symbol to buy a very good global portfolio. Hit “Contact Dale’ if you want to learn how to ditch your Canadian mutual funds and likely double or more your investment wealth over time.
Embrace a global portfolio
Throughout all of this disruption, I’ve suggested that investors ignore all of the Trump noise. We should always have an investment plan and then stick to it like glue.
From March of 2025, just before stocks recovered from a very weak first quarter
Don’t avoid U.S. stocks. Embrace a global portfolio.
Even before Trump won the election I offered this on Seeking Alpha (sign up required) …
Democrats’ Stock Returns Beat Republicans’, But It Still Doesn’t Matter Who Wins.
The key quote from that November of 2024 post …
How do you shape your portfolio based on the next President of the United States? You don’t.
Dale Roberts on Seeking Alpha
But for those who did want a risk management idea I presented …
Gold is on a massive run to all-time highs as the Trump promise of massive tariffs will likely be inflationary, and tax cuts will balloon the deficits. But for the record, neither party has an interest in tackling the runaway debt.
Maybe gold is the sensible investment idea here?
OK, so I guess that one worked out OK. Well, from the beginning of this blog I have advised readers that gold makes the balanced portfolio better.
I use bitcoin as well, it has greatly outperformed gold. It is the new gold, modern gold to my eye. Fiat currencies are melting ice cubes. Both gold and bitcoin are a very good hedge, IMHO.
A difficult start date for recent retirees?
On Findependence Hub, are these – Challenging times for recent retirees?
The U.S. market also continues to make new highs. The euphoria has stretched valuations to near record levels. Some indicators suggest U.S. stocks are at their most expensive level, ever. When stocks are this expensive, returns are historically very poor or even negative over the coming several years or decade.
*past performance does not guarantee future crappy returns
What’s a retiree to do? If they want to manage that risk, should the need arise, you’ll find the answers and some suggestions (not advice) in that post.
- Embrace a variable withdrawal strategy
- Reduce your spend rate in retirement
- Keep working / semi retirement
- De-risk
- Hold less of the expensive equities (duh)
- Add a U.S. value tilt
We have been evaluating this risk (and all types of risk) at Retirement Club for Canadians.
The good news is that the risk is easily managed. And in fact, it is likely a very good time to retire and we know that we have been treated to some wonderful equity returns that have accelerated the start dates of many would-be retirees. Recent retirees have been treated to potential incredible spend rates.
More Sunday Reads
On this blog I have highlighted the AI tailwind that the utilities sector is about to experience. From May of 2024 …
Pipeline stocks and utilities are on the move again.
At Stocktrades, Dan offers his take with this video, The AI boom hiding in plain sight. Investors are missing this.
You’ll find Dan’s favourite stocks in the video.
Dividend Hawk looks at his portfolio activity for the week. I see that we shared in some dividends from Manulife MFC-T, Qualcomm QCOM. We both hold RTX Corporation. It seems that every week there is a contract announcement, or two …
RTX Corporation (RTX) is being awarded $602.9 million for a firm-fixed-price contract for spare parts and repair of assemblies related to the active electronically scanned array radar system used in support of the F/A-18 aircraft and RTX also is being awarded a $497.69 million firm-fixed-price contract (N0003925D2002) to produce, test, and deliver fully integrated Navy Multiband Terminals (NMT).
Retiring with that million dollar portfolio
Two weeks ago I asked – Can you retire with a one million dollar portfolio in Canada?
Here’s financial planner Owen Winkelmolen with how to retire with that one million and pay, wait for it – NO TAX!!!
I’ll be back with more ‘study’ on this. The most tax efficient plan might not create the highest and most durable income, but extreme tax efficiency is certainly worth a look.
The RRSP Meltdown, a Canadian retiree’s greatest hack?
And speaking of taxes, Kyle at Million Dollar Journey looks at the best countries for retirement, for Canadians. Kyle has a lot of experience as an ex-pat.
From Booming Encore, Living your best encore: Jayne Galanka
What I value most at this stage of life is my health. I’m quite active and want to continue living that way. Having lost several close relatives far too soon, I carry a deep awareness of how precious good health is. As I move further into my senior years, my greatest hope is to enjoy life with the freedom to move, explore, and live independently.
Jayne Galanka
The Loonie Doctor is back with more on his dividend series: Do dividend stocks outperform?
And more on potential bubbles from Isabelnet …
Let’s go Blue Jays!
Yes, I single-shirtedly broke the recent Blue Jays’ curse. They’re 3-0 since the spell-breaking. Let’s hope for 4-0 and an American League Pennant …
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Here’s Canada’s top-performing Robo Advisor, Justwealth. You can get advice, planning and low-fee ETF portfolios all at one shop. You can have it all.
Consider Justwealth for RESP accounts. That is THE option in Canada with target date funds that adjust the risk level as the student approaches the College or University start date.
OUR SAVINGS ACCOUNTS
Make your cash work a lot harder at EQ Bank. RRSP and TFSA account rates are at 1.75%, other savings rates up to 3.0%. You’ll find some higher rates on GICs up to 3.60%. They also offer U.S. dollar accounts at 3.0%. We use EQ Bank, they have been awesome.
OUR CASHBACK CREDIT CARD
We make between $40 to $70 every month! And that’s on everyday spending. There are no fees with …
The Tangerine Cash Back Credit Card
For August we received $51.24 in cash from everyday spending. You can select 3 categories for 2.0% cash back. The rest pays at 0.50%.
That cash went into my TFSA account to help buy some CBIL-T, CHPS-T and HURA-T.
Join us at Retirement Club
It is a series of monthly Zoom Presentations, newsletters, plus a secure and private online space where we learn, share ideas and connect with members. Here’s the Retirement Club overview page. This past week we conducted a retirement cash flow review and plan for a club member who thought she might be spending in the $60,000 annual (after taxes) area. The cash flow plan shows a safe spend rate is likely in the $90,000 to $95,000 range.
Make sure you’re doing retirement right. It’s also suitable for those who are approaching retirement. Use Contact Dale if you’d like more info, or to sign up for the next group.
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