BJK Financial Group Blog

Staying the Course Amid Tariff Uncertainty
What investors should be thinking about

My perspective: Stay focused on the long term, review diversification, and use volatility thoughtfully rather than reacting emotionally.

Recent headlines surrounding new U.S. tariffs on certain Canadian goods have created understandable concern for investors. As negotiations between Canada and the United States continue to evolve, many Canadians are wondering what this means for the economy, financial markets, and their portfolios. Reports indicate that the latest tariffs affect selected categories of Canadian exports and have prompted discussions regarding potential Canadian responses.

While these developments may increase uncertainty and market volatility, I believe the most important message for investors is simple: stay focused on your long-term plan.

Market Volatility Is Normal

Periods of uncertainty are nothing new. Markets have navigated recessions, political changes, financial crises, pandemics, inflationary periods, and trade disputes throughout history. While every situation is unique, the lesson for long-term investors is often the same: short-term headlines can create market volatility, but successful investing typically requires patience and discipline.

Trade tensions can create challenges for businesses and investors. Companies may delay investment decisions, adjust supply chains, or reassess growth plans. Economists have also noted that uncertainty itself can affect business confidence and economic activity.

However, making significant portfolio changes based solely on news headlines can sometimes prove more damaging than the event itself. Markets often react quickly to uncertainty, but they can also recover quickly when clarity emerges.

Diversification Matters More Than Ever

One lesson reinforced by recent events is the importance of diversification.

Many Canadian investors naturally have significant exposure to Canada and the United States. While North America remains home to many innovative businesses and continues to be a vital component of most portfolios, there may be benefits to ensuring investors have meaningful exposure to opportunities outside North America as well.

International equities provide access to different economies, industries, and currencies. They can help reduce overall portfolio concentration and may offer opportunities when certain regions are trading at valuations that differ from those found in Canada and the United States.

For some investors, particularly those with a heavier equity allocation, it may be worthwhile to review whether increasing international equity exposure could improve diversification. Examples of funds that may be considered include international equity mandates such as the National Bank International Equity Fund, which provides exposure to companies and economies outside North America.

This is not about abandoning North America. Rather, it is about maintaining a balanced portfolio that is not overly dependent on the economic or political environment of any one region.

Bonds Can Still Play an Important Role

Another area worth revisiting is fixed income.

When markets become volatile, investors often focus on equities. However, bonds continue to play an important role in many portfolios by helping reduce overall volatility and providing potential stability during uncertain periods.

The economic impact of tariffs can be complex. On one hand, tariffs can contribute to inflation by increasing the cost of certain goods. On the other hand, they can potentially slow economic growth if businesses delay investment and consumers become more cautious.

If economic growth slows meaningfully, many investors tend to seek stability through higher-quality fixed income investments. This is one reason diversified portfolios often maintain an allocation to bonds, even when equity markets are generating strong returns. Recent market commentary has highlighted the importance of diversification and risk management during periods of heightened trade uncertainty.

For investors with a high concentration in equities, it may be worthwhile to review whether their portfolios have sufficient fixed income exposure. Investors may wish to discuss with their advisor whether additional international diversification or fixed income exposure is appropriate for their individual circumstances. These types of investments may help provide diversification and potentially reduce overall portfolio volatility. The suitability of any investment will depend on an individual's objectives, time horizon, and risk tolerance.

Volatility Can Create Opportunity

While volatility can be uncomfortable, it can also create opportunities.

Market declines often make investors nervous, but they may also allow investors to purchase quality investments at lower prices than were previously available. Nobody knows exactly where markets will move in the short term, and attempting to predict market movements consistently can be extremely difficult.

For long-term investors, periods of weakness can sometimes be viewed as opportunities to gradually build positions rather than reasons to abandon a financial plan.

This is where discipline often becomes more important than prediction.

The Value of Dollar-Cost Averaging

One strategy that may be particularly useful during volatile periods is dollar-cost averaging.

Rather than investing a large amount all at once, investors contribute a fixed amount on a regular schedule. When markets decline, those contributions purchase more units. When markets rise, they purchase fewer units. Over time, this process can help smooth the impact of market fluctuations.

For investors holding excess cash or making regular contributions to investment accounts, market volatility may provide an opportunity to continue investing systematically while maintaining a long-term perspective.

Dollar-cost averaging does not eliminate investment risk, guarantee profits, or protect against losses. However, it can help reduce the emotional component of investing and encourage consistency regardless of market conditions.

Focus on What You Can Control

The current tariff dispute will likely continue generating headlines in the months ahead. Markets will continue to react to economic data, corporate earnings, central bank decisions, and developments in trade negotiations.

However, investors have limited control over those events.

What investors can control is maintaining an appropriate asset allocation, diversifying across regions and asset classes, investing consistently, managing risk appropriately, and staying focused on long-term goals.

For some investors, this may be an appropriate time to review asset allocation and discuss whether additional international diversification or fixed income exposure could strengthen their portfolio. For others, it may simply be a reminder that a well-constructed investment plan is designed to weather periods of uncertainty.

In my view, the current environment reinforces principles that have always mattered: stay diversified, remain disciplined, think long term, and avoid making emotional decisions based on short-term market events.

While volatility may increase in the near term, investors who remain focused on their objectives and maintain a disciplined approach are often best positioned to navigate whatever comes next.

Important Disclosure
This article is provided for general informational purposes only and should not be considered investment, tax, or legal advice. Any investment strategies or fund examples discussed are provided for illustrative purposes only and may not be suitable for all investors. Investors should consult with their financial advisor before making investment decisions. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

References

• iA Private Wealth Investment Products & Platforms. Monthly Market Snapshot. December 2024.
• Ivey Business School. “Ask the Experts: Trump’s 50% Tariffs on Canada.” July 23, 2026.
• ABC News. Reporting on U.S. tariffs affecting selected Canadian goods. August 21, 2026.
• Global News. Reporting on Canada’s response to new U.S. tariffs. August 22, 2026.
• CBS News. Reporting on U.S.-Canada tariff developments. August 22, 2026.

This article reflects the author’s general views at the time of writing and is intended for educational purposes only. Any reference to specific funds is provided solely as an example of investment solutions that may be considered and does not constitute a recommendation to buy or sell any security.