The market mood is mixed. On one side, Trump tariffs are creating uncertainty as the United States is Canada’s biggest export market for oil and gas, aluminum, and steel. If the tariff threats become a reality, a year-long tariff could reduce Canada’s gross domestic product (GDP) growth to zero. On the other side, the Bank of Canada is cutting interest rates at an accelerated pace. If the trade war intensifies, the government could consider introducing relief packages for affected sectors to put off the fire of uncertainty. A third possibility is tariffs don’t materialize, and Canada witnesses a strong recovery.
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Navigating uncertainty with all-weather TSX stocks
You can navigate all the scenarios by investing in all-weather TSX stocks that can generate positive returns in every climate over the medium and long term.
Telus stock
Telus (TSX: T) is a defensive stock that can generate cash flows and revenue in any weather. You need broadband and wireless subscriptions. Previously, Telus operated in regions where it had built its fibre network. The telecom regulator’s mandate of sharing networks removed the exclusiveness and pricing power the incumbents had on its fibre network. Telcos started competing on price, which affected profit margins.
While BCE stuck to its decision to offer services only on its network, Telus adapted. It started acquiring customers in other regions by offering bundled services running on rival networks. This increased Telus’s revenue and reduced its capital expenditure requirement as it doesn’t need to spend billions on building a fibre network to acquire new clients. Meanwhile, Telus created competition for smaller players by offering bundled services at attractive price points.
Consumers win as they get more for less, and Telus wins as it gets more subscribers. All the subscription money after expenses converts into higher free cash flow which is passed on as dividends. Telus stock is trading at a nine-year low, an opportunity to lock in over 7% dividend yield and hop on to the recovery rally early.
Barrick Gold stock
Barrick Gold (TSX: ABX) stock performs well in times of uncertainty. The tariff uncertainty has weakened the Canadian dollar. Gold prices rise when the U.S. dollar is weak. However, trade uncertainty could also drive up gold prices as central banks worldwide store more gold reserves to strengthen their currency.
Barrick Gold stock can hedge against stock market volatility by offering an alternative investment. The company mines both gold and copper. It has increased its mining output and improved its efficiency in 2024. A higher gold price could help the company realize windfall profits, allowing it to buy back more shares and pay dividends. At the same time, many investors use Barrick Gold stock as an alternative to investing in gold in the commodity market.
Descartes Systems
Descartes Systems (TSX: DSG) stock is also an all-weather stock with resilient growth, a strong balance sheet, and a 22% net profit margin in the third quarter. The supply chain and logistics management solutions provider feeds on high trade volumes and trade complexities.
Trump tariff uncertainty could boost demand for Descartes’s global trade intelligence solution that provides updated information on global trade movements, regulations, and trends. If free trade persists, Descartes’s global logistics network could help manage the flow of data and documents related to inventory, assets, and people in motion. If tariffs are imposed, its customs compliance technology could help exporters securely and electronically file shipment and tariff information with customs authorities.
The company will benefit in every scenario, making the stock a buy at every dip.
Final thoughts
Individual stocks can expose you to company-specific risk. You could consider investing a small portion in market exchange-traded funds (ETFs) and technology ETFs. They are a great tool to diversify your investments and benefit from the overall sector growth.
