I really love the saying, “the days are long, but the years are short.” There are stretches in life that seem to drag on endlessly—like those early parenting years, when some days just feel never-ending. Yet somehow, before you know it, your kids have graduated, moved out, and gotten married.
Lately, I feel like I’m living life on fast forward! I’m not sure if that’s just because of an unusually busy few months, or if it’s a sign of the stage of life I’m in. Since my last newsletter, I’ve celebrated winning a provincial championship with the men’s soccer team I coach—featuring both my boys—I attended a conference in London, and took the whole family on an unforgettable vacation to Iceland.
My boys are six years apart, and while I’ve coached them individually for most of their lives, it’s only been in the last couple of years that they’ve played together on the same men’s team. I had thought I’d be done coaching once my youngest finished youth soccer a few years ago, but I got talked out of retirement when they started playing together at this level. Time really flies! Winning provincials with both of them on the team was a truly special moment. Nationals take place every October in a rotating province, and this year, it’s in Newfoundland—so I’ll be wishing you “Long may your big jib draw” over Thanksgiving!
Iceland was absolutely breathtaking. It’s been on my bucket list for a while, but I wasn’t sure if I could convince Kristy to swap summer sun for glacier hikes. But after nearly 30 years of marriage, I’ve learned that if Kristy’s hesitant, the key is to get the kids on board first! Once it became a family bucket list trip, instead of just my own, she was all in.
The London economic conference was excellent. Not only did it give me an excuse to catch some EPL soccer while I was back there, it also had a fantastic lineup of presenters. My favourite was an economist with a PhD in both economics and political science. But despite taking two pages of notes on his insights, my final takeaway was, “Europe baffled by Trump and US behaviour”.
Traveling through Iceland was more enlightening than the conference. A land born from volcanic fire and carved by glaciers, with unpredictable weather and wild landscapes—volcanoes, glaciers, geysers, waterfalls, and even a volcanic eruption that forced the Blue Lagoon evacuation while we were there. The experience felt like an apt metaphor for navigating today’s markets!
The volatility index is at record levels, investor sentiment is bearish, yet markets are flirting with all-time highs. For once we are not simply using “volatile” as a euphemism for bad! Investing has long been compared to a roller coaster, where those who can’t handle the ups and downs and unexpected twists shouldn’t be in equities at all. You have to be willing to see the ride out as trying to jump off a roller coaster half way through is a recipe for disaster. But this market takes it to another level. It reminds me of the first big roller coaster we talked my youngest son, Jordan, into going on many years ago at Six Flags. He had just hit the age/height requirement for the bigger roller coasters, and the family had convinced him to give one a go. The problem was that he had been building up his courage watching one roller coaster, but we hopped on the Superman ride instead. For those of you who haven’t been on it, the Superman ride launches you backwards – something he hadn’t realized until it started! His shocked face as we took off is forever etched in my memory!
Market swings triggered by earnings, job reports or inflation are one thing. But when markets are moving in response to one man’s midnight tweets, keeping up feels impossible. It’s crucial now more than ever to look through the headlines, rise above the noise and spot real signals. You’ll never be comfortable riding a roller coaster if you only focus on the next inch of track.
Trump’s presidency is chaotic, transactional, and predatory in style, damaging the U.S.’s global reputation. He has shown himself quite comfortable living in chaos and there’s a harshness in his approach that’s tough to watch. But from an investment perspective, don’t conflate bad leadership with bad policy.
So far, the pattern has been to bully countries with the threat of high tariffs to extract better deals for the U.S. Canada’s a prime example—willing to sacrifice a longtime friendship for short term economic gains. Nobody benefits from a 35% tariff, but it hurts Canada more, so the most likely outcome is Canada will swallow its pride and negotiate it down to 10-15%. Hold your nose, do the best deal you can because you can’t afford not to, and buy some time to pursue new trade partnerships. Move forward with the knowledge that we will no longer be able to rely on the US for our own sovereign security. This is analogous to what most countries are doing globally.
Markets have priced in these realities. A global trade war is unlikely, and 10% tariffs may slow, but won’t kill global growth. We’re shifting from a U.S.-dominated global economy to a more fractured landscape of trading blocs. The Trump camp’s self congratulatory rhetoric points to the reshoring of some manufacturing, energy deals, a strong stock market, and contained inflation as signals that policies are working. It’s too early to draw firm conclusions, but so far, policy hasn’t been disastrous. Time will tell whether inflation becomes a problem and the effects that the erosion of law and cronyism have on markets, but bad policy would already be reflected in market prices.
Economics may be emotional short-term, but markets are pragmatic and agnostic over the long-term. Right now, the numbers look okay. There are exciting tailwinds too—generative AI is just getting started, and sectors like digitization, security, robotics, and healthcare hold strong secular growth. Markets are forward looking and forecasting is done based on probabilities. Right now markets are telling us that they are ok with policy and are optimistic about the next year.
Remember we are dealing in probabilities, not certainties. You would have to be correct on the economic numbers, Trump’s mindset, US politics, the Russia/Ukraine war, the war in the Middle East, how investors are feeling about all that, as well as avoiding any black swan events that might arise, just to be in the right ballpark on a prediction. Give any expert opinion that is stated with any sort of conviction the same amount of weight as you would rolling a Magic 8 Ball. We are living in a crazy world. But don’t worry, the numberone use case for Gen AI going forward is therapy and emotional companionship!
Our portfolio strategy remains steady. We don’t invest based on how we feel about politics and try to ignore market noise and focus on policy. We rely on a proven discipline with guardrails to manage volatility and avoid emotional decisions. We seek durable businesses for the long haul, tuning out distractions and sticking with companies that will benefit from long term tailwinds.
That said, I’m starting to adjust portfolios slightly to reflect the waning premium for U.S. exceptionalism. Deals are being struck because the US market is the biggest consumer market in the world, but there is a global movement underfoot to not be so reliant on that market going forward. Geographic diversification is becoming more important, and Europe’s rearmament will be a key investment theme for years to come.
Investing, like life, seems to speed up in later phases—often called the “snowball effect” as it relates to money. Saving your first $100K is a grind and probably the toughest stretch in your investment journey. Staying the course through ups and downs can pay huge dividends later on. I ran this simulation for my kids, but it is hopefully encouraging to all investors.
The chart shows a $1,000 monthly investments at 10% annual returns over 29 years:
· First $100K: ~6 years 2 months
· $1,000,000: ~22 years 6 months
· $2,000,000: ~28 years 11 months
· Time from $1M to $2M: ~6 years 5 months
It takes nearly seven years to reach your first $100K, but the same steady discipline gets you from $1M to $2M in about the same time in the latter years of investing. Ignore the noise, buckle up, and don’t jump off the roller coaster!
As a final note, we’re rolling out some back-office improvements this fall. Worldsource is consolidating as it follows the industry’s regulatory amalgamation of IROC and MFDA. It is also updating and improving the client portal at the same time. There will be some changes to client login logistics that we will walk through with you over the coming months. You’ll hear more from us soon, and I’ll send a separate email this week with details.
Enjoy what’s left of summer—it always seems to fly by no matter what stage of life! I hope to connect with everyone in the next quarter for account reviews and adjustments. In the meantime, please reach out anytime if you have questions.
The information provided here is general in nature and should not be considered personal investment advice or solicitation to buy or sell any securities. It may include information concerning financial markets as at particular point in time and is subject to change without notice. Every effort has been made to compile it from reliable sources, however, no warranty can be made as to its accuracy or completeness. The views expressed here are those of the authors and writers only and not necessarily those of Worldsource Securities Inc., its employees or affiliates. There may also be projections or other “forward-looking statements.” There is significant risk that forward looking statements will not prove to be accurate and actual results, performance or achievements could differ materially from any future results, performance or achievements that may be expressed or implied by such forward-looking statements and you will not unduly rely on such forward-looking statements. Before acting on any of the information provided, please contact your advisor for individual financial advice based on your personal circumstances.
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