Yes, interesting times may call for interesting portfolio changes! Or not. 🙂

Inspired by a few recent reader questions and a new blogger article I found that I will link to below, here is my quick take on whether I should be making any changes to our portfolio: with a new U.S. President.

Should I change our Portfolio – With a new President?

Reader questions, adapted slightly for the site:

Reader #1:

With a new U.S. administration about to take office on January 20, 2025, it’s easy to imagine things like tariffs on U.S. imports, an overheated U.S. economy, etc. fuelling the rise of inflation.

Thoughts? Should we be using this reality in our investing style going forward? What changes should we consider? Also, with net interest income improving in that type of scenario. Banks seem like a good idea?
Just a thought for a future article.

And…

Mark, I know you’re investing more in U.S. stocks and global stocks using a low-cost indexed fund now vs. before – at least you have written about that for the last few years since the pandemic. So, with the pandemic now over and with the U.S. stock market up so much since 2023, what’s your investing plan when a new U.S. President comes into office? Do you still support that administration and that economy moving forward beyond 2025?

Readers, thanks for your questions. 

Deep subjects and questions! 🙂

And, there was also this recent post from Millennial Revolution:

I’ll unpack a few themes to provide some answers…what I am doing and what I will continue to do.

1. Politics is messy, at best

Like the Revolution article above, although I don’t always get it right (!) on this site, I try to avoid writing too much about politics and/or the broader economic climate including the influence that each subject has with the other since these subjects are far too polarizing. It’s very difficult to have any meaningful discussion online these days…

2. Equity diversification still works

Until my overall investing approach stops working towards meeting my goals, I’ll keep at it.

For new and established readers on this site, you might be aware I’ve mentioned that our investing approach could be considered a “hybrid approach” – a structure that was established about 15 years ago as follows:

1. We invest in a mix of Canadian stocks in our taxable account – to deliver income and some growth, and
2. Beyond the taxable account, while we own a mix of Canadian and U.S. stocks, we own (increasingly) more low-cost ETFs like XAW and QQQ in particular in our registered accounts: inside our RRSPs, TFSAs and my LIRA for extra diversification.

I like the approach, the process and the results.

As a hybrid investor, I just don’t see how I should be making any significant changes to our portfolio for income, growing income, and total growth for the coming years.

When the market is hot, low-cost ETFs like XAW, QQQ and some select stocks in my portfolio run – like Waste Connections (WCN) has in recent years.

YTD the stock is up nearly 30% in my portfolio.

If the market turns bearish, while most stocks will go down in price many blue-chip stocks will still pay dividends regardless of the market correction. The Boards know that shareholders invest in their companies for stable cashflow. Even dividends can be increased in a bear market by some companies. One good example is owning Fortis (FTS) – which has been paying higher dividends for 51 consecutive years through all kinds of market cycles…

I’m trying not to fix what isn’t broken per se. 

That said, I also don’t see the U.S. stock market flying higher, up another 20% for 2025 coming.

Sure, that could happen I guess but 2023 and 2024 have been great investing years coming out of the pandemic for the U.S. so I would expect, at some point, some reversion to the mean will occur. If and when and how much that reversion will be, well, I have no idea… Continue Reading…