Amidst ongoing tariff drama, the tumbling stock market and declining oil prices, people may be panicking.
But one expert says it’s important for anyone worrying about their portfolio right now to “stay the course,” remain calm and not act hastily, as they might regret it in the long run.
On Wednesday, U.S. President Donald Trump imposed his long-awaited retaliatory tariffs to the world, driving prices up.
CityNews spoke to Chris Porochnuk, an Associate Portfolio Manager at CIBC Wood Gundy, whose advice for investors is that even when things look bad, markets do recover, so it’s important to maintain a long term outlook.
“Panicking and selling into this weakness will likely not result in positive outcomes, especially if you’re invested in stable blue chip long-term type investments or strategies,” Porochnuk said.
“Eventually the markets do eventually rebound from it. Right now we’re still trying to see where that footing is as to when things will start that rebound.” he said ”You’ve got to stay on the focus to the long-term.”
While tariff uncertainty is the main catalyst behind the tumbling market, Porochnuk says weakness in other sectors, mainly U.S. Technology, is also adding fuel to the fire.
He says if you’re in a riskier portfolio tied more closely to the markets, then the tariffs could be more of a concern, but “income generation from the portfolios is generally not going to be impacted by this, or at least not in a meaningful way.”
Porochnuk says he’s seen similar stock situations during the 2008-2009 financial crisis, and even a much more recent instance.
“COVID was a bit more synonymous with what we’re seeing now,” Porochnuk said. “The real driving force behind the declines we saw in 2020 was the risk and impacts towards the global economy; and that’s kinda’ what we’re seeing here, is what are the tariffs gonna’ do to the global economy?”
However, he says at this point, the markets haven’t dropped nearly as much as in March of 2020, when the TSX was down by close to 30 per cent.
The S&P/TSX composite index was down more than 4.5 per cent after also losing four per cent Thursday, while U.S. indexes were down over five per cent after also seeing big drops a day earlier.
On Wednesday, Trump confirmed he is going ahead with 25 per cent tariffs on automobile imports starting Thursday, which were added to existing 25 per cent tariffs on all steel and aluminum imports into the U.S., including from Canada.
He also unveiled a 10 per cent baseline tariff on imports from most countries and a lengthy list of higher tariffs dozens of countries will face. But a White House fact sheet said goods imported under the CUSMA free-trade pact will not face tariffs, although imports that fall outside of it will be hit with 25 per cent levies.
Both Canada and Mexico remain under the threat of economywide duties Trump has linked to the flow of fentanyl across the borders.
With files from the Canadian Press.
