Tariffs are sending markets on a wild ride. Here's advice for young investors

A person walks past the TMX Market Centre in Toronto, Wednesday, Sept. 11, 2024. THE CANADIAN PRESS/Paige Taylor White

Wild swings in the stock market can be difficult to stomach for many investors, let alone young Canadians who are just starting their investing journey.

But even as the trade war between Canada and the U.S. brings a heaping spoonful of additional volatility, experts say in the grand scheme of things, it could just be a blip in young investors' portfolios — if they stick it out.

“The first step is you’re not going to do anything,” said Sara McCullough, a certified financial planner and owner of WD Development.

• Latest news & updates on tariffs and the trade war here

“You’re not panicking, you’re not selling anything, you’re not going to buy anything.”

For those concerned about their investments, McCullough said to take stock of their portfolio, review their risk tolerance and look at why they’re invested.

If your portfolio is meant to help you buy a house in the next three years, that money shouldn’t have been in the market in the first place, she said.

Investing for the long term is crucial for young investors, which is why they should be able to sail through the current market volatility.

However, if they realize they truly can’t stand to see big fluctuations in their portfolio, it might be time to make some changes.

That means lowering the risk level of the portfolio by reducing the stock exposure and diversifying, Paul Shelestowsky, senior investment adviser at Meridian Credit Union and Aviso Wealth.

“Maybe we need to add more bonds to the portfolio and less stocks to give peace of mind,” he said.

Bonds experience fewer fluctuations and grow over time at a steadier rate compared with stocks. Shelestowsky said people can also move to Guaranteed Investment Certificates (GICs), which have a fixed rate of return and guarantees your original investment will be safe. The trade-off is the returns on GICs are typically low, especially after factoring out the rate of inflation, and the money is typically locked in for a set period of time.

In Shelestowsky’s opinion, there are degrees of decision-making in a volatile market. Moving money out of investments to sit in the portfolio as cash stands as the worst option.

“The medium option is to just stay invested,” he said.

The best financial option? Add to your investment holdings during volatility.

“Most people during times of volatility want to flee to safety to help themselves psychologically, but in the long run, they’re actually hurting themselves financially,” he said.

When stocks broadly tank in times of volatility, it can be a good time to load up on companies at a discount, Shelestowsky said.

“This level of chaos and volatility can actually work in younger people’s favour,” he said.

McCullough said it’s important to understand how markets behave normally.

“We’ve had such positive markets for so long (that) we’ve forgotten,” she said. “If you’re a young investor, you didn’t go through 2008, or if you did, you had very little money at that time, so it didn’t matter to you.”

But the markets can go down, she said.

“This is not strange behaviour. This is what it does.”

Some days, it can be hard to ignore the wild fluctuations in the market and its mental toll despite having a well-balanced portfolio.

McCullough said people shouldn’t be looking at their portfolio frequently — especially on a broadly negative day. Instead, check in quarterly.

“Leave it alone, don’t look,” she said.

“You have to get over the human part of yourself,” McCullough said.

“Complain to your friends, have a glass of wine, go for a run, buy a puppy, do what you need to do, but don’t take it out on the investments.”

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Ritika Dubey, The Canadian Press

This report by The Canadian Press was first published March 25, 2025.

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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:

• CTVNews.ca will have in-depth coverage, real-time updates, and expert analysis on what the tariffs will mean for Canadians.
• CP24.com will report on any developments out of Queen’s Park and what the tariffs means for the people of the GTHA.
• BNNBloomberg.ca will explain what this means for the business community, investors, and the market.