Inflation

Inflation

Four ETFs to play the modern gold rush

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• Gold is shining again; prices have surged to record highs this year and are forecast to climb further.

• Central banks are buying at a record pace, while investors seek protection from rising debt and currency debasement through gold ETFs.

• BMO’s gold ETF suite offers choice: ZGLD for stability, ZGD for growth, and ZJG for high-octane exposure.

Gold shines in 2025

By Erin Allen, Director, Online Distribution, BMO ETFs

(Sponsor Blog) 

Gold’s reputation as an ancient store of value has rarely felt more modern.

The metal has been one of 2025’s standout performers among major asset classes, surging to record highs of around US$3,900 per ounce as of September 2025. The rally has been fueled by central bank buying, rising fiscal concerns, and investors seeking protection from a weakening U.S. dollar.

BMO Capital Markets recently lifted its gold price forecasts to an average of US$3,900 for the final quarter of 2025 and US$4,400 for 2026, reflecting what analysts describe as structural changes in the geopolitical and financial landscape¹.

The key driver: debt. With deficits in the U.S., Japan, and Europe ballooning, gold is increasingly being viewed not just as a safe haven, but as a strategic hedge against long-term currency debasement.

In this piece, we unpack what’s driving gold’s renewed strength, assess whether it’s sustainable, and outline ways investors can gain exposure through BMO ETFs from the physical metal itself to large and small-cap miners.

Central banks are quietly building reserves

One of the biggest tailwinds for gold has been record levels of central bank buying.

According to Reuters, central banks now hold 36,000 tonnes of gold, having added more than 1,000 tonnes annually for three consecutive years². This surge reflects a broad reassessment of what constitutes a safe asset.

Geopolitical instability and questions over the long-term stability of U.S. Treasuries have prompted central banks to diversify reserves. Gold has even overtaken the euro to become the second-largest global reserve asset, and for the first time since 1996, represents a larger share of reserves than Treasuries².

Chart 1: Foreign central banks hold more gold than Treasuries

Gold fell from 75% to 15% of reserves; Treasuries rose and surpassed gold holdings around 2023 for central banks.

The World Gold Council notes that while emerging markets typically hold 5–25% of their reserves in gold, developed economies hold more than 70%³. This steady official-sector accumulation underscores the global shift to tangible assets amid growing fiscal and political uncertainty.

Trade tensions and currency debasement fears

Gold’s strength also reflects what Bloomberg calls the “debasement trade.” As government debt piles up and fiscal discipline erodes, investors are moving out of major currencies and into alternative stores of value such as gold, silver, and Bitcoin⁴.

The U.S. dollar is down roughly 8% year-to-date, while gold continues to post record highs. Bloomberg notes that the current cycle echoes previous bouts of U.S. dollar weakness following the global financial crisis and periods of aggressive monetary easing⁴.

As George Heppel, Vice President, Commodity Research at BMO Capital Markets, explains, both cyclical and structural forces are converging¹:

“What we’re really seeing this year is the combination of a short-term thesis and a long-term thesis for holding gold, which has created a perfect storm for the metal. And naturally all of this increases concerns around sticky or growing inflation and the potential for negative real rates next year, which makes gold an attractive asset to be holding as an inflation hedge,” he says.

With U.S. debt climbing and political gridlock persisting, investors have reason to question the durability of fiat currencies. Gold, with no counterparty risk and a finite supply, has reasserted its role as a monetary anchor.

According to the Congressional Budget Office (CBO), the recently passed One Big Beautiful Bill Act (OBBBA) – also known as the “Trump tax cuts” – will add an estimated US$19 trillion to U.S. debt over 30 years as written, or US$32 trillion if made permanent⁵.

“The passage of OBBBA will put tremendous pressure on the nation’s fiscal and economic health. Layered onto an already unsustainable outlook, the new law increases the risk of higher interest costs, slower growth, volatile markets, and reduced capacity to respond to future crises or invest in national priorities,” the CBO warned.

Chart 2: Debt soars under OBBBA

Projected U.S. debt-to-GDP rises sharply from 2025 to 2054, peaking at 219% under the highest scenario in the chart.

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Gold ETF demand surges to near-record levels

While central banks are leading the charge, investors are not far behind.

According to ETF.com, global gold ETFs have attracted US$44 billion in inflows this year, equivalent to roughly 443 metric tonnes of the metal⁶. That puts 2025 on track to rival the record US$49.5 billion set in 2020: the strongest year ever for gold-backed funds. Canada alone saw over $1B flow into commodity ETFs, largely driven by gold, according to National Bank of Canada’s September flows report.

Gold ETFs have become the preferred way to access gold, offering liquidity, transparency, and simplicity: all without the complications of physical storage.

Investment banks turn bullish

Institutional sentiment has followed suit.

BMO analysts believe the gold market is undergoing profound structural change, driven by debt, inflation, and de-dollarization. The bank has raised its long-term gold-price assumption to US$3,000 per ounce, up from US$2,200, placing it near the top of sell-side consensus¹. Continue Reading…

Almost six in ten Canadians worry they’ll run out of money in Retirement: especially women and young people

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The majority of Canadians are afraid they’ll run out of money in Retirement, especially women and young people, according to a survey released Wednesday morning by the Canada Pension Plan Investment Board (CPPIB).

The 2025 CPPIB Retirement Survey  (for Financial Literacy Month) says 59% of all Canadians are afraid of running out of money during Retirement, with the percentage jumping to 63% for women, compared to just 55% of men. It also found a whopping two thirds (66%) of Canadians aged 28 to 44 share the same fear. As the CPPIB graphic  below illustrates, those who have a financial plan are slightly less worried.

 

As you’d expect the CPPIB to point out, the Canada Pension Plan (CPP) helps protect retired Canadians from this risk: as it says above, CPP “benefits are payable as long as you live and [are] indexed to inflation.”

Indeed, CPP and the other main government retirement income program, Old Age Security, are both valuable sources of inflation-indexed retirement income. CPP is available as early as age 60 and OAS at 65 but a staple of Canadian personal finance commentary is that the longer you wait to receive benefits, the higher the benefits will be. In the best of all worlds, you’d wait until 70 for both programs to start paying out, even if you have to keep working longer and/or start withdrawing money from your RRSP before it’s mandated at age 71/72. (While the CPPIB doesn’t mention it, retirees with no other savings may also benefit from the Guaranteed Income Supplement to the OAS: and the GIS  is tax-free.)

The second graphic reproduced below is less straight-forward: it appears to present various excuses for delaying the creation of a proper financial plan to help get to Retirement. Roughly half of younger Canadians cite their need to advance their careers and make more money, and to buy their first home as priorities.


While it’s true that if nothing else, the future arrival of CPP and OAS benefits should put minds partially at ease about covering off basic Retirement expenses, it seems to me pretty obvious that at least for those who lack a generous employer-sponsored pension plan (ideally an inflation-indexed Defined Benefit pension), that it will be necessary to maximize savings in RRSPs and TFSAs as soon as possible.

Because of the Time Value of Money and the magic of compounding investment returns (especially when tax-deferred in RRSPs and TFSAs), the sooner you start saving in these vehicles the better. There’s no excuse not to make RRSP contributions from the get-go, ideally as soon as you land your first real job, since it reduces your income tax. Yes, decades from now when RRSPs become RRIFs you’ll have to pay some tax on the ultimate withdrawals, but that’s more than made up by the tax-deferred investment growth. Continue Reading…

Gold’s Shiny Moment — But I’m still not buying it

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By Alain Guillot
Special to Financial Independence Hub

It’s all over the news. The price of one ounce of gold is over $4,000

Millions of people — and even some governments — consider gold to be an investment. Good for them.

Ever since I became interested in investing, I’ve always dismissed the idea of owning gold. I still haven’t changed my mind, but I must admit: the gold bugs are having a good moment.

As of October 22nd, gold was trading at $4,067. That’s a 48% increase from one year ago when it was $2,744. Congratulations, gold bugs. Especially to my friend Michael who has been telling me to buy gold for the past 10 years.

It’s been an amazing run. If you had put your money into gold at the beginning of the millennium, in January 2000, you would have ended up with more money than if you had invested in the S&P 500. A lot more. About three times as much, as you can see from this chart.

And remember: the S&P 500 represents real businesses. Companies producing goods and services, generating profits, paying dividends, and giving you a claim on future cash flows — cash flows that are much larger today than 25 years ago. Gold, on the other hand, is — as British economist John Maynard Keynes put it — a barbarous relic. It produces nothing. It just looks shiny.

Yes, it has some industrial use in electronics, and millions of people all over the world wear it as jewelry. But economically speaking, it’s just a shiny object.

So how does this shiny object — which does nothing except sparkle — outperform one of the greatest bull markets in U.S. history? It boggles my mind.

Why I still prefer stocks

First, let me tell you why I prefer stocks.

The reason I prefer stocks over gold is simple: cash flow compounds.

When you own productive assets:

Companies earn profits.
They reinvest those profits to grow.
They pay dividends or buy back shares.
Your slice of the economic pie keeps expanding — even while you sleep.

That compounding effect is relentless. It’s like planting a tree that keeps bearing fruit year after year. Gold, on the other hand, just sits there. It doesn’t grow. It doesn’t reproduce. It doesn’t innovate. You’re entirely dependent on the next buyer being willing to pay more for it than you did.

That’s not investing. That’s speculation.

Why some like Gold

I admit it, gold does have a legitimate purpose:  it serves as insurance against currency collapse or geopolitical disasters. Imagine for a second that you live in a country with high inflation, like Venezuela. If you have gold, you don’t care that the local currency, the Bolivar, collapses. You are good, you have gold.

One possible reason for gold’s recent rise is central banks. Many of them have been buying gold as part of their foreign exchange reserves. Traditionally they buy U.S. dollars, but some of them are switching to gold because their relationship with the U.S. has been deteriorating. Continue Reading…

3 books I just read that Retirees DIYing their pensions need to read

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My latest MoneySense Retired Money column looks at a must-read new book on Retirement as well as two related books on DIY stock-investing. You can read the full column by clicking on the highlighted headline: Who you gonna trust: Barry Ritholtz or Jim Cramer?

The must read and main focus of the MoneySense column is William Bengen’s A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More. If that sounds familiar it should: Bengen’s original book on the 4% Rule is considered the bible of retirement, with his famous “SAFEMAX” guideline of 4% a year being an annual amount of withdrawals that should be “safe” for retirees to continue for a full 30 years, even after inflation. The original book,  titled Conserving Client Portfolios During Retirement, was first published in 2006.

Never mind that even Bengen considers 4.7% be a more universal SAFEMAX. The original book was aimed at financial advisors and professionals while the new one ostensibly is aimed at retail investors and retirees. I say ostensibly because I was a little disappointed with it and found the plethora of complicated charts and tables a bit much for lay investors. Still, there’s a lot of common sense there: Inflation is big long-term threat to retirees as are bear markets. Withdrawing too much from portfolios can be disastrous if you are unfortunate enough to retire just as a bear market hits and/or inflation starts to bite.

On the other hand, sticking with the old 4% rule or even the smaller amounts of 3% or even 2% advocated by some cautious souls, could result in you withdrawing less than you really need to enjoy retirement, although the tax department and any heirs might commend your caution and frugality.

How to make money in any market

Amazon.ca

While it’s rare for me to buy new hardcover books because I receive so many “free” review copies of financial books, I actually did buy A Richer Retirement as soon as it was available on Amazon. Plus, unusually, I also bought two other brand new books on the related topic of investing and stock-picking.

One was Jim Cramer’s How to make money in any market, by the sometimes revered but often maligned host of  CNBC shows Mad Money and Squawk on the Street. It’s fashionable for some financial journalists who believe in efficient markets and indexing to diss Cramer but I am not in that crowd. In fact, Cramer recommends that newcomers to investing put the first US$10,000 into an S&P500 index fund or ETF.

However, for seasoned investors and even retirees, Cramer suggests putting half a portfolio in index funds and the other half in individual stocks. Where we part company is his recommendation that the bucket of stocks be restricted to just five names, which would mean 10% in each. For my money, that’s way too concentrated and risky, even though he often brags about how he is often accosted by Nvidia Millionaires who tell him they bought that stock as soon as he announced on air that he had renamed his dog Nvidia.

How NOT to invest

Amazon.ca

Finally, regulars to this site may already have read Michael Wiener’s review of Barry Ritholtz’s How NOT to invest, which appeared here in this blog a few weeks after appearing on his Michael James on Money blog.

To be sure, those who are fond of disparaging Jim Cramer might quip that should have been the title of his own book, seeing as there are actually ETFs out there that try to profit by shorting Cramer’s picks. As of this writing, my copy has arrived but I have not yet finished reading it, as it’s a bit longer than the other two.

But based on the book blurbs and Michael’s review, I have no doubt it will be worth reading, whether for younger investors or seasoned ones and/or retirees.

Finally, while I only just received my review copy, I note that David Chilton is publishing a new edition of his classic financial novel, The Wealthy Barber, which any young person just starting to invest should acquire.  I look forward to revisiting it.

 

 

 

The common mistakes made by Retirees

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By Dale Roberts, CutTheCrap Investing, Retirement Club

Special to Financial Independence Hub

We all make mistakes. There is no such thing as the perfect portfolio. In the accumulation stage we usually have time to recover from mistakes and hopefully we’ll learn from those mistakes. Learning from mistakes will usually move us towards a more passive global core index-based portfolio. In retirement, we don’t always get a second chance. It is crucial to be aware and avoid any retirement pot holes. Kyle at the Canadian Financial Summit asked me to discuss and outline some of the key and common retirement mistakes. Of course, they are too many to mention in a 45-minute interview. Below, I will outline more of the common mistakes in retirement.

Here’s an AI outline of the Canadian Financial Summit.

The Canadian Financial Summit is an annual, free, virtual conference for Canadians to learn about personal finance and investing from Canadian experts. It covers topics like retirement planning, tax optimization, and investment strategies, with content tailored specifically for a Canadian audience to address Canadian-specific financial products and regulations. The goal is to provide practical advice to help attendees save money, invest better, and improve their financial literacy.

Canadian Financial Summit Speakers

The Summit begins on October 22 with headliners such as David Chilton (new Wealthy Barber book out in November), Rob Carrick, Jason Heath, Preet Banerjee and more. Here’s the list of speakers and topics.

My segment will air on October 24th. You can register through this Canadian Financial Summit link.

Once again, I am covering common retirement mistakes. Here’s the range of topics I had prepared for my discussion with Kyle. We touched on a few of these.

We have to start in the accumulation stage

Many retirement mistakes are born in the accumulation stage, and in the retirement risk zone.

Too much risk

Most investors take on too much risk. They are not investing within their risk tolerance level. That said, it has not been a problem since 2009: we have not been tested. But retirees and near retirees were certainly burned by the financial crisis and the dot com crash. For too many, their retirement was greatly impaired.

And of course, we can add in not taking on enough risk, for those who are risk averse. We need to take on the risk necessary to achieve our financial goals. All said, we always need to invest within our risk tolerance level.

The accumulation stage is dead simple

Go for growth while investing within your risk tolerance level. More money is “more better.”  More money will create more retirement income.

Paying ridiculously high fees

Fire your wealth-destroying high-fee mutual funds and the advisor they rode in on. Ditto for the retirement stage. You can do the research necessary, or look to an advice-only planner who specializes in retirement planning.

Don’t count the dividends

Don’t PADI – Potential Annual Dividend Income.

That’s like watching the oil gauge as you try to make the car go faster.

The dividends do not contribute to wealth creation. Dividends are a removal of value; that’s it. The share price drops by the value of the dividend. If you move the dividends back to your stock or ETF holding to buy more shares you are simply owning more shares at lower prices.

As Yogi Berra would ask: do you want your medium pizza cut into 8 slices or 6 slices?

You still have a medium pizza, no matter how you slice it.

Dividends are a tax drag in taxable accounts. You are paying tax on money you don’t need. You are paying tax on money that creates no value. It’s phantom wealth creation, but with real taxes.

Avoid covered calls and other specialty income

They underperform by design. That fact should be outlined in the prospectus.

Canadian home bias

This can be related to a fascination with Canadian dividends or Canadian Blue Chip stocks in general. For sure, building a portfolio of Canadian Blue Chips is known to greatly outperform the TSX Composite. But we need greater diversification to reduce risk.

A Canadian with severe home bias is putting all of their chips on a few sectors, one country and one currency. It’s not smart.

We should consider a global portfolio, at the very least a Canadian and U.S. portfolio.

Stock portfolios that are too concentrated

It’s common to see portfolios with just a few stocks. We need 15 to 20 stocks to mimic an index. You’re likely best to hold 20 or more.

We create severe company risk with a concentrated portfolio.

Clear your debt

Carrying debt into retirement is a common “mistake.”  A recent report suggested that 29% of Canadian retirees will carry a mortgage.

Consider the tax burden that it takes to create the income to pay the mortgage. Every extra dollar is at the top marginal rate. It’s a mortgage payment plus tax on top. A $3,000 monthly mortgage payment might cost you $4,000 or more when you consider taxes. It could also contribute to OAS claw back.

Consider the car payment as well. Try to enter retirement with a paid-off vehicle.

Not using spousal RRSP accounts

Use RRSP spousal accounts for tax advantaged income splitting in retirement.

This allows us to ‘split income’ before the age of 65. At age 65 we can then split income from your RRIF.

Ditto for setting up joint taxable accounts. Pay attention to attribution rules for taxable accounts.

The Retirement Risk Zone

Not preparing the portfolio (de-risking) for retirement before retirement is a common mistake. We enter the retirement risk zone several years before retirement. That was our topic last year for the Financial Summit.

Mistakes in Retirement

Not running a retirement cash flow calculator

This is a must for every retiree. A retirement calculator will help you discover the most optimal (and tax efficient) order of account harvesting. That is when, and how much, to remove from your RRSP / RRIF, Taxable accounts, and TFSAs, working in concert with pensions, other amounts plus, CPP and OAS. It can help us create tax efficiency and manage OAS claw backs.

Most Canadians will benefit from the RRSP / RRIF meltdown strategy. It involves delaying CPP and OAS for the massive increases in pension-like, inflation-adjusted income.

Check out Retirement Club for Canadians

From age 65 to 70, CPP increases by 42%, OAS increases by 36%.

To delay CPP and OAS we often use the RRSP / RRIF accounts (and at times a slice of TFSA or Taxable) to bridge the gap during those years. That is, we spend more heavily from the RRSP / RRIF while we wait for increased CPP and perhaps OAS.

It’s different for everyone, the retirement cash flow calculators will help you uncover the right approach for you. Only the software knows.

There are many retirement calculator options that are free use, or available at a very low fee. We are reviewing many of them at Retirement Club.

Examples: MayRetire, Milestones, Adviice, Perc-Pro from Frederick Vettese, optiml.ca, PWL Capital also offers a retirement calculator.

Not spending, not enjoying their money

We might embrace a U-shaped spending plan. We spend more in the early years: the go-go years. It might dip in the slow-go years, and then increase again in the later no-go years as health care cost, living in place, or retirement home plus assisted living costs increase greatly.

We might call that a ‘you-shaped’ spending plan. Continue Reading…