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Friday, February 7, 2025
The Turner Report: Trump, Biden, a bullet and what future holds
NOTL's Jim Caldwell says Canadian investors shouldn't panic no matter what happens in this fall's U.S. election. GARTH TURNER

The lovely lady with the brown doodle chatted while my dog Hoovered hers. She’s in NOTL with husband and pooch from Pittsburgh.

One week earlier a bullet whizzed through Donald Trump’s ear, at a rally 33 miles from her home, up Highway 8 in Butler.

“It was Jesus that brushed it away,” she said. And that was a cue to get Cody out of her doodle’s bottom and keep moving.

American politics has seldom been like this. Maybe never.

On this side of the river, we’ll have to deal with a situation new in our lifetimes. Religion, race, tribalism, patriotism and a battle between left and right make the coming presidential vote a rising risk to wealth.

Trump’s a cult now. The Democrats dumped Joe. Financial markets are preparing for the former president to be the next one.

Polling shows 62 per cent of Canadians think Trump will be bad for us. From tariffs to a potential border tax, a weaker loonie and shredded free-trade deal — it makes six in 10 of us pick Biden. But that guy is gone. So the Trump reality grows.

Outside the post office I ran into Jim Caldwell. Like his brother, Tom (also a NOTLer), he’s a financial guy.

Their wealth management business has been around for decades. Long enough, I figured, to yak about what Donald (and Jesus) may have in store. Plus what to do about it. We made a date to talk.

If the Democrats keep the White House, it’s status quo. The American economy chugs along. Stock markets (lots of new highs lately) focus on profits and interest rates. The U.S. stands with Ukraine and NATO. Debt romps higher. 

But what if Trump wins?

All we know is what he says. Lower interest rates and corporate tax breaks. Fewer green regs and drill-baby, drill. The stock market will love it. Bond prices will go up, yields down — for a while. 

The concern is more stimulus, trade tariffs and protectionism, plus more deficit and a mass deportation of newcomers is a recipe for inflation.

Inevitably the bond market reacts as investors demand higher rates. The Fed hikes. Plus, Trump would have to move fast on his agenda. As a former president he has only four years ahead, with mid-term elections in 2026 — which could see a Democratic revival.

Does this mean investors, especially NOTL retirees who abhor losses, should run to cash or GICs?

Nah, says Caldwell. Don’t be a wuss — history proves those who make sudden moves to avoid risk end up creating more of it.

“This is all noise,” he insists. “You should invest and stay invested. Own good equities and be diversified — not one or two stocks, but a whole basket of companies. We don’t know what Trump will do. Maybe cut taxes again, stimulate growth and the market.”

“Sure, I have concern about tariffs and Canada. We’re the fly next to the elephant, yes, but why try to predict these things? Maybe this is all overblown — what one man can actually do.”

True enough. History proves investors who slept through the 1987 crash, the dot-com crash, Y2K, 9/11, the credit crisis or COVID did just fine. In fact, studies show accounts of dead people — untouched for decades — outperform those of active investors.

The best advice: invest through exchange-traded funds rather than individual stocks for less risk and more diversification. Hold some fixed-income (like bond funds or preferreds) to balance equity risk.

Don’t OD on maple. Keep a quarter of your portfolio in U.S. dollar-denominated assets. And stuff your TFSA and other registered accounts, since our taxes have only one direction to go.

So, yeah, ignore Trump. Even if He isn’t.

Garth Turner is a NOTL resident, journalist, author, wealth manager and former federal MP and minister. Email: garth@garth.ca.

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