As a dental professional, you know the importance of planning ahead and staying prepared—especially when conditions change unexpectedly. The same is true in today’s financial markets. With rising global tensions, ongoing trade negotiations, and shifting investor sentiment, the second quarter brought a fresh wave of volatility.
In this issue of Wealth Matters for Dentists, we break down what’s happening, what it means for Canadian investors like you, and how our investment strategy continues to focus on stability, resilience, and long-term growth.
Impact on Canadian Investors
For Canadian investors, much of the focus has shifted to ongoing trade negotiations. Tariffs on Canadian goods were initially postponed as the newly elected government began discussions. Canadian equities have shown resilience—especially in industrial sectors—and banks have outperformed thanks to strong balance sheets and attractive valuations. Defensive sectors also held their ground as investor sentiment turned more cautious.
Canada – US Relations
More recently, Canada-U.S. trade talks have restarted, with Prime Minister Carney indicating that Canada may not entirely avoid tariffs. President Trump has threatened a sweeping 35% tariff on Canadian imports, set to take effect August 1. However, consistent with the unpredictable style of the Trump administration, a U.S. administration official further signaled that the existing North American trade agreement may shelter the vast majority of Canada-US trade from these same tariffs.
US – EU performance
Meanwhile, U.S. markets have underperformed relative to other developed economies, largely due to stretched valuations—particularly in the tech sector. There are rising concerns that tariffs could act as a tax on both consumers and businesses, potentially fueling inflation and putting upward pressure on interest rates.
In contrast, European equities posted a strong quarter, buoyed by optimism around potential fiscal stimulus and infrastructure spending. Several of our portfolio holdings benefited, though we have started to trim positions where valuations appear stretched.
Key Investment Lessons
Looking ahead, uncertainty remains high. Geopolitical tensions and trade disputes will likely continue to drive market sentiment. One key takeaway from recent market shocks—as seen in 2020, 2022, and again this year—is that the greatest risks often lie in companies with overly optimistic valuations. When conditions change, those assumptions can quickly unravel, and so can prices.
Rest assured, we are actively monitoring portfolios and making adjustments where needed. Our strategy remains disciplined: invest in high-quality companies with consistent profits and strong balance sheets, manage risk through diversification, and take profits when appropriate.
Have Questions?
If you have questions, please reach out to our Wealth Advisor, Cory Wilson by emailing cory.wilson@protectfinancial.ca or call 416-391-3764.
