Bill’s Blog | July 2, 2025
2025 has proved to be volatile, due to several serious issues: Mr. Trump’s trade and tariff agendas, the ongoing tragic wars in multiple countries, growing debt issues, the inflation crisis, devaluation of currencies and purchasing power. Despite the many uncertainties, the major markets have been extremely resilient. The main reason is that global liquidity continues to be strong. We had a correction in April with the tariff announcements, but since then, the Bull has continued to charge forward with major indexes all in the green and with many record highs. The Canadian dollar is up over 5% YTD at .7305 to the US dollar. The US dollar is down over 10% YTD. I forecast that the year will end with positive returns in most markets, with another possible correction in the fall.
So, what are the real issues and the best strategies in uncertain times?
- Diversification is critical. Consider putting your wealth in multiple asset baskets that are non-correlated. Many Canadians have their wealth concentrated in only two or three asset classes, like real estate, stocks, bonds, cash or a business. I recommend having 6 or 7 asset classes to protect your wealth.
- Be open to learn about new ideas and investment strategies. Understand market cycles, and what are the big trends to invest in and what to avoid. For the next 10-plus years, the three major trends are AI Adoption and building out the necessary infrastructure, which will require huge amounts of Energy and Commodities (such as uranium, oil and gas, copper, lithium, and silver), as well as the move towards Digital Assets and Currencies (including Bitcoin and Central Bank Digital Currencies, or CBDCs).
- I have guided clients for over 15 years to have a sizable portion of their wealth in physical precious metals outside the banking system. Why? Physical gold and silver have no counterparty risks. Both metals are in high demand from central banks, sovereign nations and savvy investors. Silver and gold have outstanding returns again of 26% YTD. When I provided a Silver alert a month and a half ago, the gold/silver ratio was 102 to one, but today it is down to 91 to 1 as I forecasted it would decline, and it should continue to decline to a 70 to 80 ratio to 1. Several clients and I took action, and our silver has appreciated nicely.
- The real estate market in several regions of Canada is struggling (especially BC and Ontario) with 30 to 40-year lows in house sales and high inventories. The Vancouver and Toronto condo markets are a mess, with little to no buyers as presale purchasers have vanished. Mainly due to falling prices, extreme building costs, poor government regulations, and rentals are not profitable.
- A word of caution: If you are considering purchasing a home in the next couple of years, consider that over 2 million Canadians need to refinance, and many will struggle to afford the higher payments. Prices should decline. There are still pockets of the market that are doing well. But it is the regions where house prices are extreme valuations, 5 to 12 times local income ratios, that are experiencing the severe problems. Know your market, and a healthy market and income ratio should be about 3 to 4 times the price of a detached home (with townhouses and condos less expensive).
- The last issue that is impacting Canadians is the high inflation in food and housing, as already mentioned. As an example, beef prices have gone up 16 to 20% since January 2025. General food prices have gone up 3.8%. Coffee is up 15%. For those living in BC (as I do), our food prices are 20% higher than the rest of Canada. Thankfully, fuel costs have declined due to the Conservatives exposing the futility of the carbon tax, which has done nothing to improve the environment and has cost Canadians billions in over-taxation.
- Canadians continue to see growing unemployment, 6.7% and youth at 20%. With governments running massive deficits, expect inflation to persist, higher taxes and the diminishing purchasing power of our dollars in the years to come. We are in a serious recession.
- Here are two of the real issues: wages in Canada have grown 24% inflation-adjusted since 1981, and real estate has grown 163.5% inflation-adjusted. It is not a mystery why housing is so unaffordable for most Canadians.
- Here is a recent Coinbase ad: “In 2012, it would require 30,000 Bitcoin to purchase an average home in America. Ten years later, it would require 20 Bitcoin. Today, five Bitcoin can purchase a nice American home”. Strongly consider purchasing assets that outperform inflation!
- Big institutions, corporations and governments worldwide are accumulating Bitcoin as an asset diversifier and developing strategic sovereign funds. Why? Mainly, due to sound regulation in the USA and the massive adoption of this new asset class.
Yes, there are many challenging issues we all face today. It would be wise to get your budget under control (spend far less than you take in), consistently save monthly and reduce or eliminate debt. It is doing these simple disciplines with your finances and budget that puts you on a stable financial path.
Bill Westmacott, BC Life Insurance broker, Estate Planning, and Wealth Solutions