A Comment -- General Comments From an Expert (A Commentary)

Understanding time when investing:

Arguably the most common mistake investors make (aside from not taking the appropriate amount of risk) is not factoring in their time horizon when making an investment decision. A general rule of thumb to follow is that higher risk investments require a longer time horizon to realize their return potential and in the short-to-medium term, it may be a bumpy ride.

This is important to understand as many investors sell out of an investment too early because they are not seeing the results they expect in the short term. Stocks fluctuate for various reasons on a day-to-day or even month-to-month basis that have little to do with a company’s underlying business performance or fundamentals. Often times it requires patience for the fundamentals to reflect in a company’s stock price.

Understanding your time horizon is also essential as it largely determines how much risk one can take and what kind of assets are most relevant to own. Finally, your time horizon is ultimately a reflection of your goals and when you want to achieve them. Remembering this helps one avoid straying from their investment strategy.
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The answer is "very little". If these tariffs really go on, and if they go on big (25% across the board), and if they're lasting, and if this is really their game plan, the playbook is going to be deeply recessionary. It'll be deeply recessionary for Canada, and could be recessionary for the US as well.

It won't be a question of what should you own. It'll be more a question of what should be sold. You'll want to really bring down your equity allocation.

People want to know if this is really going to happen. Anything can, and we're certainly in uncertain territory. As your anchor, look at Scott Bessent's 3-3-3 plan. This involves 3% GDP Growth, 3% debt to GDP (very deflationary), and 3M more barrels. Looking at the US, its biggest priorities are to grow and to cover their debt. If they don't get in front of that debt, at some point it's going to be calamitous. They're never going to get in front if it if that economy doesn't grow. Getting from 2% to 3% is not going to happen with tariffs.

A lot of it is the antics of negotiation, and he doesn't want to be wrong and misallocated in portfolios. But 3 months from now, he'd gamble that we'll be out of the tariff woods.

Fentanyl at the border, the Arctic, and paying our fair share of NATO. The trick will be that if tariffs are put on, the waiting game begins of how long will they last? If they are put on, markets will just drift down and down and down.

He believes that at some point the Trump administration will cry uncle and lift them, because tariffs weren't actually their primary motivation. His guess is that tariffs will last 2-3 days or weeks, and then Donald will move on to something else.

So much at play. Donald wants more barrels per day, but are companies going to respond? He's not sure. They well remember their near-death experiences from "production at all costs" years ago. There's also Russia -- is there going to be a potential thaw down the road? Same with Iran. The IEA thinks global demand will be 2-3% higher in 2026 and 2027, peaking at 2029-2030.

Canadian oil companies are pretty cheap, pretty attractive, returning a lot of cash to shareholders. Would he invest in oil with all this noise? No. He'd go more for the natural gas side -- it's an export that needs to happen. Both Germany and Italy came to us a while ago, and now we're finally responding. Price of nat gas in Asia is higher than here. Out nat gas price is about double what it was a year ago. That's where you want to be.

Doesn't think the 10% tariff will be put on. With Canadian energy trading at a discount, the price already swings, so 10% is not really that big a deal. These companies can survive if a 10% tariff is imposed.

He doesn't like buying put protection, as it's really expensive and then Trump changes his mind and it expires worthless. Do that a few times, and you get tired of it. It's tough. Leave it to the institutions that specialize in that strategy. 

Always loves selling calls. Take a stock that's had a big move, with markets still dancing near highs. When markets erode, find names that you like and sell puts. You get a premium both ways. Selloff today, but markets are still near market highs, still room to sell calls.

Clarity from Trump will trigger a relief rally, especially in momentum names, and banish the current volatility.

Market's getting a bit numbed by the whole thing, yet the market is still constructive. When he looks at the recent pullback, it's more of a consolidation rather than a rolling over.

He looks at it very constructively (whether or not you can believe the narrative on it), as it's propelled the AI revolution.

Investing Basics: Take a long-term view, avoid panic selling

Given the constant stream of information through news channels, endless YouTube debates, never-ending podcast suggestions, unlimited market gurus, and so on, it is easy to feel overwhelmed and seek out data that perfectly aligns with your fear-prompt emotions. This is known as confirmation bias, where one can find and frame data to fit or accommodate any idea. There is one truth in the market, however, which is that long-term investors are eventually rewarded. Headlines such as economic recessions, geopolitical tension, terrorist attacks, and reactive monetary policies trigger market volatility that are short-lived. It is important for investors to understand historically volatility and market performance are pieces of a cycle that are tested on a regular basis. While past market performance is no guarantee of how the market would perform in the future, Peter Lynch says, far more money is lost preparing for or anticipating corrections than been lost in the corrections themselves.
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BMO and BNS reported today, and the market rewarded BMO for its US outperformance. BNS has less of that presence, so the market is favouring a US presence, given the Trump tariff threats. There's tons of uncertainty in the market, and nobody has a good understanding of what is actually happening. Will tariffs be implemented on what goods and sectors? Stay diversified, and consider sectors in a weaker market and when interest rates decline, which he still expects. The US 10-year rate has fallen a lot in recent weeks, and there are more homes for sale in the US sunbelt now. He expects homebuilding levels to come down in the spring, and the Fed to ease rates. He expects US deregulation to come later, in 2026, as Trump decides where to cut back in Washington, which will have a negative impact short term. The market will be choppy till then. It's hard to invest when you don't know what the policy is going to be, the main issue with the Trump issue. 

This week, Nvidia's earnings will pull a lot of investor attention, but last week Microsoft demonstrated a significant shift in their thinking about their investment in AI. Those two were the cause of last Friday's reversal--will Nvidia confirm MSFT's caution over AI, partially due to DeepSeek? Then, you have volatility about Trump's tariffs and chaos. Any news that questions the status quo of a market priced for perfection will create a lot of volatility. The Mag 7 no longer leads the market. Also, the market has already priced in the chance of only one US Fed cut this year.

Gold stocks are cheap vs. the price of gold, and gold as an asset class is definitely a buy on dips, because of major uncertainty on central bank debt for some years. Given the recent run, he'd sell, not buy. Gold could fall back to $2,700.

Everyone knows that the US budget is on an unsustainable path. No secret. Enter DOGE and Elon Musk firing federal employees. Total US federal debt to GDP is at an all-time high and will worsen. Trump's policies are trying to fix this after many years of ineptitude in Washington. Tariffs are intended to raise revenues and bring more jobs to America, but tariffs are highly inflationary. Also, create a sovereign wealth fund by taking social security and investing it better, and revaluing gold: that idea has been floated, which he thinks is good. DOGE will get rid of some debt and lose some baggage. But issuing a zero coupon 100-year bond is impossible, because you can't force anybody into buying this debt. He doesn't love Trump's style, he's starting to get things down, but that will be disruptive, volatile to markets. Also, he's not sure that Trump has a complete solution to reducing the debt, because his policies will be inflationary (which means higher interest payments). At some point, market will care about this volatility.

The volatility in the markets is partly due to the unpredictability of what Donald Trump will do. Also the market has been trading at high levels and interest rates are about 4.5% so it does offer an alternative to stocks. The Fed is unsure about what to do. We were on a path to lower interest rates globally but now the U.S. says maybe not. The tariffs would basically be a supply shock to the economy.  However you can use volatility to buy companies you really like for the long term at cheaper valuations. This is not necessarily good for short term traders. It is difficult for people to go from cash into the market.