2 days Ago
Traders work on the floor of the New York Stock Exchange during morning trading on April 15, 2025 in New York City. Adam Gray/Getty Images On Tuesday, April 15 at 1 p.m.
ET, personal finance columnist Rob Carrick , retirement reporter Meera Raman and investment reporter Tim Shufelt answered reader questions about the ongoing tariff war and how it could impact personal finances and investments . Here are some highlights from the Q&A. Questions and responses have been edited for length and clarity.
Real estate Is now a good time to be selling a house? Rob Carrick: Not really. This is a market where sales and prices are both falling. Sellers do not have the upper hand, unless selling a sterling property in a prime neighbourhood.
Sad to say, but the 2025 housing market was shaping up quite nicely for sellers until the trade war happened. Now, buyers are acting cautiously, as they should. Can you wait until better times to sell? What should first-time homebuyers do? Buy now or wait till we see campaign promises and perhaps the effects of tariffs take hold? Carrick: The housing market has been hit pretty hard by the trade war.
Sales are down, and prices are edging lower as well. Not great news for boomers looking to cash out, but very positive for first-time buyers. It’s hard to predict where we go from now because of trade war uncertainties.
If the trade war blows over, housing might just take off. If it worsens, home prices could fall further. Election-wise, I haven’t seen anything that would be a difference-maker for affordability in the near term.
Another aspect is mortgage rates, which have been stable lately and don’t appear likely to fall significantly. All in all, it looks like a good time for first-timers to get qualified for a mortgage and start looking. I’m considering whether I should lock in a five-year fixed rate now at 3.
89 per cent, or wait in hopes of getting a better rate closer to the renewal date in June. Also, is it more beneficial to make a lump-sum payment toward the mortgage or invest that money in the market, given the current environment? Carrick: A rate of 3.89 per cent for five years is pretty darned good.
Not sure if there’s much room for mortgage rates to fall in the near term, given all the volatility in financial markets. As to your second question, you could ask five experts and get five different answers. Me, I like the mortgage lump-sum for right now.
Gives you a guaranteed result, whereas money put into stocks may take a while to pay off. What is the expected impact on the Canadian real estate market? I was planning to downsize pre-retirement. Would you advise delaying? Carrick: The real estate market ain’t great right now.
This works against you in selling your family home, and for you when buying your next property. Talk to some real estate agents to find out what houses like yours are going for now, and what pricing is like for the type of property you see yourself living in down the road. Delaying your downsize might well make sense, but it’s worth looking at the numbers before deciding.
Young investors As someone in my mid-20s and just at the beginning of my serious savings journey, what might you say are the most important lessons to learn from the current financial climate? Meera Raman: First off, the fact that you’re even asking this question in your mid-20s is great. As one expert I talked to put it, “school is in session.” The key lesson right now is how fast markets can swing.
A sharp drop one week could be followed by rebound the next. It’s a reminder not to make any snap decisions based on short-term losses. Think of this as the start of building your market drop calluses – experiences that will help you stay steady through future ups and downs (because this will happen again).
The stock markets have beaten millennial investors like a pinata - is all this pain worth it? What do I tell my 28-year-old niece and nephew when they ask what their financial priorities should be? Should they get into the market, focus more on real estate, or on cash-like savings? What’s the financial future outlook for them? Carrick: Young people feel torn in all directions right now – they need to save for retirement, have cash savings for emergencies, and they often want to own homes. Plus, there are near-term goals, like travel. Right now, given the trade war and risk to the economy, having a good emergency fund makes sense.
That’s cash held in a high-rate savings account. Returns aren’t fabulous – 2 to 3 per cent, but safety is a big priority right now, especially for younger workers who may be vulnerable to a worsening job market. Next, what about a first-home savings account? A way to save for a home purchase and, if that doesn’t work out, the money can go into a registered retirement savings plan.
I know the investing outlook seems dark right now, but young people are prime candidates to have significant exposure to stocks. Buying some exchange-traded funds or stocks after a market decline is a great way for all investors, young and old, to benefit from long-term stock appreciation. Markets and U.
S. stocks I am fully invested in U.S.
equities and ETFs – all blue chip, such as Magnificent Seven. Should I wait it out or move out into other investments? Tim Shufelt: The Magnificent Seven stocks have definitely taken a big hit this year. Not that surprising, considering the valuations Big Tech was sporting going into the year.
Now, their fortunes are changing practically by the day. Just look at Apple’s stock chart over the last two weeks – down 23 per cent on the trade war, then up 17 per cent over tariff exemptions for smartphones. That’s a crazy swing for a US$3-trillion company.
It’s anyone’s guess what’s ahead for these names. But generally speaking, the worst mistake an investor can make is selling on the way down. That’s how you lock in losses that exist only on paper.
Should I get rid of my U.S. stocks? Shufelt: There are a few potential problems with unloading one’s U.
S. stocks, one of them being capital gains. Lots of Canadian investors have piled into the bull market in U.
S. stocks the last few years and are now sitting on big gains on paper. Selling them off could result in a hefty tax bill.
Should I replace my U.S. stocks in my portfolio with Canadian or EU shares? Shufelt: We’ve seen both Canadian and European stocks outperform U.
S. stocks so far this year, by a pretty big margin. Not many people saw that coming and it’s quite the change of pace from the last couple of years.
What’s driving that shift seems to be investors shifting from high-valuation stocks to cheaper equities. Whether that continues mostly depends on risk appetite, the duration of the trade war, and the whims of President Trump. Lots of Canadian investors have piled into the bull market in U.
S. stocks the last few years and are now sitting on big gains on paper. Selling them off could result in a hefty tax bill, writes Tim Shufelt.
Adam Gray/Getty Images Are we entering a bear market? How do you operate a portfolio in a recession? Which industries should you invest in to protect your capital? Shufelt: By some measures, U.S. indexes have already crossed the bear market threshold.
It seems likely that the TSX will get there, but who knows. We are in a world of radical uncertainty and forecasters are pretty much in the dark. As for a recession, the odds are certainly rising.
If you’re the tactical kind of investor, defensive sectors tend to hold their value in times like these. Think utilities, consumer staples and telecoms. Should I reduce my exposure to the stock market? Shufelt: It’s crucial for investors to not let their emotions get the best of them.
Easier said than done though, when you’re watching your savings vanish in real time. These are the moments when it’s important to fall back on your investment plan – how your portfolio is structured based on your risk tolerance, age, financial circumstances, etc. If you’re overdue to rebalance, now might be a good time for that, while keeping in mind the tax implications on capital gains.
Otherwise, try not to obsess over financial markets. You’ll be more likely to make a mistake if you’re constantly plugged into the madness. RESPs We have an RESP for our son that has lost about $5,000 in value over the past few weeks.
Is there any way to stave off these losses? We will begin withdrawals from the RESP this coming September. Carrick: I think RESPs need to managed a bit like RRSPs – start reducing risk as you get to the point where you need to start drawing down on the plan. What should I do with my 16-year-old’s RESP? Carrick: Let me tell you what I did with the RESP for our two sons when they went to university.
At some point when they were in Grade 10, I started to take the risk out of their RESPs. I sacrificed some potential gains in order to preserve the value of the RESP, which was enough to cover their degrees. I went with GICs maturing in August, round about the time tuition bills came in.
By Grade 12, I wanted the RESP to be bulletproof and was fully in GICs or investing products designed to hold cash. Retiree investors What advice do you have for elderly retirees who are seeing their portfolios affected by the market ups and downs and who don’t have the same length of runway as younger retirees? Raman: For older retirees, many experts suggest shifting toward more stable investments. But, the balance that you’d want to strike is ensuring continuing income while helping to preserve the legacy.
The goal should be to protect the funds for future generations, ensuring there’s a balance between income needs and long-term security. What advice do you have for individuals with DC pension plans? Raman: With a DC plan, you’re responsible for how your money is invested – so it’s key to review if your portfolio still fits your risk level and retirement timeline. If you’re nearing retirement, shifting gradually (emphasis on gradually ) into more stable assets can help protect your savings from short-term swings.
But, if you’re still years away from retirement, your portfolio has more time to recover from market swings. If your adviser is telling you to delay retirement because of market volatility, that adviser may not be right for you How long should we expect it to take for our economy to adjust so we can gauge what the “new normal” means for our retirement income streams? Raman: The million-dollar question! A lot of things are up in the air right now. Not only are we wading through uncertain economic waters, but we are also in the middle of an election campaign.
Different parties are promising different things when it comes to retirement income: raising the RRSP age limit, increasing GIS by 5 per cent, increasing the amount retirees can make tax-free, etc. All that to say, things could become clearer in the coming months about what that new normal looks like. What I can tell you is that now is a great time to stress-test your retirement plan, because we can’t be sure how long the economy will take to adjust.
My RRIF, which begins paying out this year, is mainly composed of Mawer Balanced funds. I am 72 – should I be switching to something safe and less volatile? Carrick: I’m a former investor in the Mawer Balanced Fund. I left because my wife and I consolidated our investments with an adviser – not for any issues with the fund.
I spent zero minutes worrying about this fund over the years because I knew I was in good hands and received good long-term results. This is a long way of saying that Mawer Balanced is suitable for someone who wants a sensibly managed, well-diversified portfolio and is willing to ride the ups and downs of financial markets for five to 10 years or more. Remember, this fund has a significant weighting in bonds, which have performed better than stocks.
I’m a retiree. I’ve seen my TFSA, which is fairly conservative equities, lose 10 per cent. Is it gonna get better? Raman: It’s never fun to watching your investments tumble – especially in retirement.
It’s hard to have hindsight in these moments, but from every financial adviser I’ve talked to, they have all said the same thing: things will bounce bank. Easier said than done, but markets do bounce bank, it’s just a question of when. The important thing to remember is that acting out of fear can lock in losses that might have otherwise bounced back.
Keeping calm How do I keep calm and not panic, considering all the market volatility? Carrick: So, it’s obvious from the questions here that a lot of people are really worried about the stock market and their investments. Let me offer a few thoughts: What kind of questions should I be asking my adviser right now when it comes to my portfolio? Raman: There are a couple key questions you can ask your adviser right now. First, you can ask them to do a detailed cash flow analysis with you, so they understand how much you spend each year.
That will ensure that you have enough cash to cover your spending, even when markets dip. Next, you can ask your adviser how your plan is being affected by market conditions. It’s a good sign if they give you an answer that is specific to your goals, as opposed to a generic answer, according to experts I’ve talked to.
This is also a good time to get a second opinion on your financial plan. You can seek out a fee-only or advice-only planner to review your plan. These advisers don’t earn commissions on products, so their analysis may be more objective.
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