As Canada steels itself for trade war, we’re protecting the value of your investments

May 31, 2018


As Canada steels itself for trade war, we’re protecting the value of your investments


You may have noticed the stock market is seeing some increased volatility today. There is uncertainty around trade tariffs that the US intends to impose.

This uncertainty added up to a significant drop, with the Dow Jones Industrial Average sliding 250 points today, a decline of 1%. Similarly, the S&P 500 dropped 0.7%, while the Nasdaq Composite lost 0.3%. Meanwhile, the Canadian dollar fell 0.31 cents. It’s not nearly as bad as the drop in February, from which markets had mostly bounced back, but we’ve had better days.

What’s going on in the markets?

Markets had already seen higher volatility lately, as trade discussions seemed to go nowhere. Today, the rubber hit the road as the US administration confirmed it will be moving ahead with steel and aluminum tariffs.

Canada and Mexico aren’t exactly taking this lying down. In response, they have announced tariffs on some US goods. Meanwhile, the EU is considering a similar move, at least on peanut butter and juice products. If it’s not yet truly a trade war, it’s certainly a serious trade tiff — and investors are wary.

The good news: our investment strategy is already helping to protect your investments

Thanks to our focus on reducing risk through diversification, there is a silver lining for WealthBar investors: your investments had some extra protection. While US equities have decreased, because the US dollar has strengthened, it has reduced the volatility in our portfolios.

In other words, it is precisely times like these when our investors can benefit from our focus on diversification. We have prepared for this season of volatility over the long term already. As such, we are recommending that investors stay the course. Volatility can feel uncomfortable, but it also presents good buying opportunities.

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