2025 is a year where you might want to tread with caution. Many different trends are shaping up. Trump tariffs uncertainty is affecting several sectors and putting pressure on the export-led Canadian economy. The Bank of Canada is slashing interest rates to increase money in the economy to support growth. Both these actions could continue to depreciate the Canadian dollar. How do you invest amid such uncertainty?
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How to invest through all this going on in Canada
You could use the weaker Canadian dollar to your advantage and invest in stocks that earn in U.S. dollars and pay in Canadian dollars.
Slate Grocery REIT
Slate Grocery REIT (TSX: SGR.UN) is a good option to consider as the real estate investment trust (REIT) earns rental income in U.S. dollars and gives distributions to Canadian investors in Canadian dollars. You could benefit from a higher conversion rate. Moreover, Slate Grocery REIT is a defensive stock as its tenants are largely grocers in the United States, where retail properties are scarce due to high construction costs. Grocery stores continue to operate in any type of economy.
The REIT’s average in-place rent of $12.65 per square foot in 2024 is below the $23.801 market average, giving it ample room to increase rent. Investing in this unit could earn you a monthly payout, giving assurance that your invested money is generating returns amid uncertainty.
Invest in evergreen stocks
TC Energy (TSX: TRP) is an evergreen stock you can invest in any market condition. While the company has been stuck in many project delays and oil spills, it has overcome them by streamlining its structure. The company spun off its oil pipeline business to South Bow and retained the gas pipeline business. It also completed phase one of its Coastal GasLink pipeline, which connects to the country’s first liquefied natural gas (LNG) export terminal, LNG Canada.
If Trump tariffs are implemented and they persist for the long term, they could impact TC Energy’s earnings. However, the company’s management clarified, in the fourth-quarter earnings, that most of its revenue comes from regulated cost-of-service pipeline tolls and take-or-pay contracts. The shippers will have to pay even if they refuse to ship, keeping its short-term revenue unaffected by tariffs.
If tariffs are implemented, TC Energy’s stock could fall. However, that would create a buying opportunity as tariffs may not last long. Moreover, the company is already working on exporting LNG to other countries and reducing its dependence on the United States.
Technology ETFs
There are rumours that technology could be next on Trump’s tariff list. A good way to navigate through this uncertainty is to invest in technology exchange-traded funds (ETFs) in both the United States and Canada. ETFs help you get exposure to some of the top stocks in that sector for a lower unit price.
TD Global Technology Leaders Index ETF (TSX: TEC) can give you exposure to some of the top U.S. technology stocks, including Apple and Nvidia. Any technology trend in the United States could drive the TEC ETF. It invests 87.4% in U.S. tech stocks and 10.7% international stocks. The ETF charges a 0.35% management fee and has returned 22% in the last five years. You could buy units of this ETF for less than $50 a unit, making investing in tech stocks affordable.
In Canada, you could consider iShares S&P/TSX Capped Information Technology Index ETF. It can get exposure to stocks like Shopify and Constellation Software.
Investor takeaway
The economy will keep changing. There would be winners and losers. The key to navigating the economic dynamics is to invest in resilient businesses that can earn revenue in every situation.
