Market Update & Portfolio Strategy - March 2025
Our portfolios remain well-positioned, with approximately 70% in cash, fixed income, and gold, generating an income of 4%–4.5%. This income can be used for monthly income withdrawals or to build cash reserves to eventually take advantage of the market uptick. We are strategically positioned to jump back into the market when the time is right.
We have been repositioning our Canadian equities, which make up approximately 12% of the portfolio, to protect against the tariffs imposed by the Trump administration. We believe that Trump is trying to push the markets down so he can implement cash back into the markets when their debt comes due at the end of June. Our strategy is focused on safeguarding your investments and positioning for future growth.
Since December 2024, we’ve made key portfolio adjustments in response to market conditions.:
End of 2024: As market conditions shifted, we saw equity markets drop—close to 3% in Canada and about 1.5% in the U.S. (S&P 500). To protect your portfolio, we closed the year with a neutral allocation of 48% fixed income, 48% equities, and 4% gold.
Start of 2025: Equity markets briefly rebounded, but with the Trump administration taking office and uncertainty around new tariffs, we took steps to safeguard your investments. We increased fixed income by 4%, reduced equity exposure in Canada and the U.S. by 4%, and diversified into international developed markets to reduce risk and prepare for volatility.
March 2025: To protect capital, we made our biggest adjustment yet—raising fixed income by 6% (10% increase on the year) in shorter-term Canadian bonds and reducing equity exposure in Canada and the U.S. by 8% (12% reduction on the year). We also increased our gold allocation to 6% as a safeguard against volatility and significantly reduced technology stocks due to their continued decline.
We know market volatility, especially around U.S. tariffs, can feel unsettling. However, our disciplined and diversified strategic approach to managing your wealth will help us navigate through this volatility. We encourage you to stay committed to your long-term strategy and resist the urge to react to headlines.
The economic and market impact will depend on the duration of the tariffs, which remains uncertain. Government fiscal responses and the Bank of Canada's monetary policy will also play key roles. Given these variables, we remain committed to managing your investments with a focus on quality companies with pricing power.
Additionally, Canadian bonds are predicted to perform well as the Bank of Canada is expected to lower interest rates in the near future. This will continue to strengthen the fixed income portion of your portfolio while helping to balance equity exposure through ongoing volatility.
In times like these, it’s crucial to separate the hype from what’s really happening in the markets. We see these moments as opportunities to reassess your investment strategy and make adjustments where needed.
Thank you for your trust and confidence in our team. Please remember we are always here for you.