Let’s be blunt. The 2025 stock market has been rough. A lot of that comes down to Trump’s bipolar tariff moves, targeting major trade partners, including Canada. All this has shaken investor confidence in the U.S.
Still, short-term noise like this shouldn’t derail a long-term investing plan. Trump won’t be in office forever, and markets have weathered worse before bouncing back to hit new highs.
That said, I know some of you like to be more hands-on with your portfolio. So here are two ideas for putting $10,000 to work this year – one for passive long-term growth, and one for an active short-term bet.
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Staying the course with quality
Over the long term, I want to be an owner of quality businesses – companies with strong balance sheets, consistent earnings, high profitability, and durable competitive advantages.
The best exchange-traded fund (ETF) to do that with, in my opinion, is the BMO MSCI All Country World High Quality Index ETF (TSX: ZGQ).
ZGQ screens for three key fundamentals: high return on equity (ROE), stable year-over-year earnings growth, and low financial leverage. In plain terms, this means the companies it holds are generally profitable, reliably consistent, and not drowning in debt.
I also like that ZGQ caps individual stocks at 5%, so the portfolio is less concentrated and not overly dominated by any one name. The 0.50% management expense ratio is on the higher side, but not unreasonable given the strategy.
And despite that higher fee, ZGQ has delivered over the past 10 years. The ETF has returned 12.9% annualized on a total return basis. ZGQ is a solid bet if you’re looking for diversified, global growth through quality companies.
Hedging against a recession with Treasury bonds
If you’re concerned that Trump’s renewed trade war could push the economy into a recession, one of the best ways to protect your portfolio is by holding high-quality government bonds.
Specifically, look at long-term Treasury bonds issued by the Canadian federal government with maturities of 10 years or more. These bonds come with virtually no credit risk, and they tend to perform well during recessions as central banks cut rates to stimulate the economy.
For easy access, the best Canadian ETF in my opinion is the BMO Long Federal Bond Index ETF (TSX: ZFL).
It offers targeted exposure to long-term Government of Canada bonds, trades with a reasonable 0.22% expense ratio, and pays out monthly distributions. As of April 17, the annualized yield sits at 3.1%.
