With the Canadian stock market getting that much more volatile for the month of March, Canadian investors may be weighing whether it’s a good idea to add some gold exposure to their portfolios. Indeed, if you’re like many Canadian investors with a considerable amount of exposure to the U.S. names, you’ve probably seen your portfolio fall like the S&P 500, which recently dipped into correction territory, rather than the more resilient and value-rich TSX Index.
And if you’re a young Canadian growth investor with just a bit more of the high-tech (and high-multiple) U.S. tech stocks, you may very well be down by 15% or more. Indeed, the important thing is not to panic or overreact, especially since much of the tariff fears are already priced into the broad stock markets. What’s the good of selling after an already sizeable plunge has struck? Either way, I believe that it’s far better to consider the road ahead rather than the rocky one that’s behind us.
And while Warren Buffett’s recent stock sales have made him look like a genius (hey, they call him the Oracle of Omaha for a reason! Anytime you doubt the man’s abilities, he comes back in a big way!), I think emulating the man by raising your own pile of cash could leave your portfolio a sitting duck to the forces of inflation. In any case, the big question on the minds of many is whether gold can help add some stability to your TFSA (Tax-Free Savings Account), RRSP (Registered Retirement Savings Plan), or non-registered brokerage account.
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Time to hedge with gold miners?
Of course, gold is often an asset held by more risk-averse investors who tend to be in their 50s or 60s, not their 30s or 40s. But with rising levels of geopolitical uncertainties, tariff risks, and central bank unknowns, gold’s record run may still have room to the upside, especially if central banks keep loading up on the asset. Indeed, it’s too late to turn back time and score a few ounces of gold at less than US$3,000.
However, I’m certainly not against buying a few ounces today (maybe just one ounce as the asset hovers around its all-time highs) with the intent of buying a few more on a pullback. Will Trump give us some clarity on tariffs in the coming weeks and months? Possibly. And while things could get nastier, at the very least, we’ll have more certainty, and if the threats aren’t as bad as fears (perhaps PM Mark Carney will have further progress in his talks with Trump), the TSX Index may have permission to move higher along with gold.
AEM and ABX: 2 dividend payers that can shine in 2025
Personally, I’m a big fan of Agnico Eagle Mines (TSX: AEM) and Barrick Gold (TSX: ABX), not just because they’re well-run, large-cap gold miners, but because they’ve got a very generous dividend in place. As gold keeps on moving higher, I view shares of both companies as having the ability to raise dividends at an above-average rate while continuing to post stellar capital gains, especially relative to the rest of the market. Of course, gold isn’t a productive asset. However, these two miners have yields currently sitting at 1.5% for AEM and 2.1% for ABX. Personally, I’d be inclined to nibble on both for the rest of the year.
