There was a wonderful opinion piece in the Globe and Mail from Tom Bradley of Steadyhand Investment Management, which pointed out some of the positives in investing. The article made us take a minute to reflect on the good happening around us and inspired us to share some of those thoughts and a few more.
We have spent a good part of the year navigating trade wars, inflation and geopolitical conflict, with “uncertainty” and “volatility” being the two words most used to describe the markets thus far. Despite the barrage of negative headlines, markets have been doing quite well as of late, reaching all-time highs in June. We might not be out of the woods just yet (as we see with Trump’s most recent tariff threat), but it’s important to shed some light on the positives at play.
The tariffs threatened by the US have been largely muted so far compared to what was originally promised. We are still in the throws of negotiations, but it has become clear that agreements between countries can be made and exclusions applied. Negotiations with so many trading partners take time and many of the start dates for the proposed tariffs have been delayed, giving business and consumers time to adjust.
Notwithstanding the tariffs, US economic growth continues to persist, and economic sentiment is rebounding. Luckily, inflation has not yet increased in any major way, which was a real concern earlier in the year. There is still a possibility for the tides to turn, but the fact that these factors are holding steady is a good sign.
From a longer-term perspective, both Canada and US have leaders that appear to be pushing growth initiatives, such as tax cuts and deregulation. Canada has already seen agreements between provinces on inter-provincial trade, which could open the door to more cooperation within our country. The focus on exceptionalism in the US has forced Canada to strengthen other relationships overseas and optimize current policies that might have been hindering its economic growth. Canada has also begun to experience a reverse brain-drain, giving Canada an opportunity to retain and hire high quality professionals that no longer wish to work in the US.
Finally, Canada already had a few rate cuts this year and it seems the US is considering one in July if the data is in line with expectations. This should help businesses that rely on borrowing to grow their operations, which in turn should benefit investors.
It has been a difficult year so far, but it’s not all doom and gloom. Our disciplined approach to investing has been a strength in this volatile market, allowing us to take advantage of the opportunities that have come our way. As we start the second half of the year, we will continue to stay the course, focus on the basics and point out the positives when we see them.
As always, please reach out if you have any questions.
Livingston Wealth Management Group