Tariffs and Investing

Jason Gibbs
Vice President & Senior Portfolio Manager

March 6, 2025

Some general thoughts about investing through the recent tariff turbulence:

The human mind often falls victim to loss aversion (no one ever gets worried when markets have gone up a lot). It also becomes anxious when control feels lost.
That’s a major problem for many when it comes to achieving investment success. It often leads to mistakes. Turbulence and short term losses are 100% guaranteed at some point. And you have absolutely no control over that.

“Suffering is caused by the contrast between what you mentally decided you wanted and the reality unfolding in front of you.”
Michael Singer

So a few reminders:

Concentrate only on what you can control. It sounds cliche but stick to the process.
Market timing sounds simple, but it never works. If only it were that easy.
Over trading your portfolio is a mistake. It satisfies your brain’s craving for control (“at least I did something”), but usually the best advice is to do nothing.
We have never been more inundated with useless news and data than we are now. Falling victim to the attention economy and becoming glued to screens 24/7 is counterproductive.
Serious investing is for long term thinkers. Those who look out years and decades and remain calm. Who constantly ask what is this business worth? The best companies adapt. They have moats. Pricing power. They generate cash flows that fund dividends. Stick with them and you’ll be fine. Don’t interrupt the miracle of compounding unless there has been a structural break to your thesis.

“Forecasting the future of any variable is difficult, forecasting the interacting futures of many changing variables is more difficult, and estimating how other expert investors will interpret such complex changes is extraordinary difficult.” Charles Ellis

And who knows, when the dust settles over many years, Canada may actually emerge much stronger from this episode.

Real change often requires a hard push. In the mid 1990’s the Wall Street Journal called our currency the “northern peso”. That helped lead to significant spending cuts and by 1998 we had a budget surplus.

Policy makers now have a major incentive to quickly reduce taxes, promote investment, champion natural resources and pipelines, reduce inter-provincial trade barriers and begin diversifying the economy away from one customer.

Life tends to work in cycles. It’s only been about 13 years since the Canadian currency was at par to the USD. Back then, investors were lining up to own Canadian stocks and resources.

Time will tell where the pendulum swings over the next decade.

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