Published on The Globe and Mail
By Brenda Bouw

March 12, 2025

Buy Canadian stocks only?

Buying Canadian goods and services is relatively easy when it comes to groceries, personal care products, shoes and clothes – but it’s a lot more complicated with stocks.

For years, Canadians have been encouraged to avoid “home bias” in their portfolios, and the U.S. economy has been an obvious diversifier because of its size and scale. Even if an investor wanted to sell all of their U.S. holdings, a market correction isn’t the time to do it – unless you’re okay with losing thousands of dollars for patriotic purposes. (And don’t forget that many Canadian companies do business in the U.S., making any decision to shun U.S. holdings even more complicated).

The Globe’s Rob Carrick argues you’re hurting yourself when you avoid the U.S. market because you miss out on globally dominant companies in areas like technology and health care where the Canadian market is weak.

Many portfolio managers I asked this week have the same stance on owning U.S. stocks.

“I get that people are extremely unhappy with the Trump Administration right now. But make no mistake, the U.S. is home to the greatest companies in the world,” says Barry Schwartz, executive vice-president and chief investment officer at Toronto-based Baskin Wealth Management. “My goal is to own the best companies that will deliver the highest compound returns over the long-term. There’s just more of those names to pick from in the U.S.”

Jennifer Tozser, senior wealth advisor at National Bank Financial Wealth Management in Calgary, says she’s not avoiding U.S. stocks – nor are her clients asking for it.

“My job is not to exclusively invest in Canada; it’s to make money for Canadians,” she says. “The policies implemented during Trump’s presidency, particularly the ‘America First’ approach, created an environment where certain U.S. stocks were relatively isolated and could benefit from these policies. When making investment decisions, it’s crucial to consider these factors.”

Ms. Tozser also owns several Canadian stocks “not just because they’re Canadian but because they’re global leaders in their own right.”

Kevin Burkett, partner and portfolio manager at Victoria-based Burkett Asset Management Ltd., says his clients generally focus on performance and risk management rather than political concerns.

“While some clients express worries about political tensions, our role is to ensure they remain invested in a diversified, well-constructed portfolio,” he says. “We emphasize that U.S. markets continue to offer attractive opportunities in certain sectors and that making investment decisions based on political sentiment rather than fundamentals can be costly in the long run.”

Canada still an attractive place to invest

While the consensus is that it’s wise to own U.S. stocks, some investors believe Canada is a lot more attractive right now, despite the tariff impacts.

Newhaven Asset Management Inc. is one of the few Canadian asset managers without U.S. exposure in its portfolio before the recent bout of volatility, according to portfolio manager Rebecca Teltscher. She has viewed the U.S. market as too speculative for her liking in recent years, driven partly by the AI boom.

“So, we avoided the space entirely and instead focused on more reasonably priced stocks north of the border,” she says.

Ms. Teltscher believes there are good companies in the U.S. and might consider buying a few if multiples come back to reasonable levels.

“For now, we are extremely happy with our decision to focus on reasonably valued stable Canadian stocks,” she says, noting that more than half of the names have some form of U.S. or global revenue stream.

Stephen Takacsy, chief executive officer and chief investment officer at Montreal-based Lester Asset Management Inc., has also been more focused on Canadian stocks, even before the tariff turmoil, because he believes they’re better valued and some companies are being unfairly punished.

Mr. Takacsy suggests investors steer clear of certain U.S. companies aligned with Trump policies – citing Tesla Inc. TSLA-Q as an example – because he says their businesses are affected by the political fallout.

“Our mandate is to make attractive risk-adjusted returns for our investors, and the risks are definitely increasing for certain U.S. stocks,” Mr. Takacsy says, adding that many U.S. stocks are seeing their fundamentals deteriorate due to Trump’s policies.

“Some European investors are now even contemplating pulling money out of U.S. banks” he adds.