Q2 investment update: Chaos to comeback
Remember that early April market chaos? No? Good. That means you were doing investing rightāthat is, not panicking.
If youāre enjoying patio season right now or planning your next escape, it may be hard to remember how markets so recently threw a tantrum. Weāre talking trade war headlines and stock dives. But just like a celebrity romance, things changed fast.
Now letās give the quarter (April 1 to June 30) the spotlight it deservesāchaos, comeback and all.
Zoom In | Portfolio performance
The dip didnāt stick š¬ ā”ļø š
Global trade tensions were top of mind in early April, sending markets down sharply. But in a few short weeks, stocks snapped back.
Our Equity-focused Portfolios rebounded strong, while those with more bond exposure saw less volatility1.
See historical performance here
Tell me moreā¦
Itās been a strong period for Canadian and international equities, proving again that a globally diversified portfolio is not just a nice-to-have but a strong investment strategy. (You may hear us talk about this a lot in these updates.)
The S&P/TSX Composite Index rose 8.53% in the quarter and 10.17% year to date (up to June 30) ā great news for your Canadian investments.
The MSCI EAFE Index, which tracks a basket of equities from developed countries outside the U.S. and Canada, posted a formidable 5.97% return for the quarter and 13.3% year-to-date (as at June 30). Yes, the international component of your portfolio was working overtime this quarter.
Meanwhile, in the U.S., the S&P 500 Index rebounded from its April low, boosted by tech giants such as Nvidia and Microsoft2 ā reaching a new record by June 30. The index grew 5.18% for the quarter and 0.76% year to date.
š”Investor insight | Automating your investments
āBattered stock markets continue slideā āToronto Star, April 5
āTSX hits record highā
āBNN Bloomberg, May 16
Yikes, right? When you saw the news in early April, your first instinct may have been to pull backāor yank your money out altogether. But then you wouldāve missed all the good stuff that followed.
Emotion-led investing rarely wins. Instead, automate it. Set up pre-authorized contributions to keep your strategy steady with dollar-cost averaging. Itās consistency over chaosāand a smarter way to ride the waves.
Zoom Out | Getting down with the markets š
Everyone wants to protect their investments. But hereās a little secret: market declines are par for the courseāand they happen more often than youād think.
š Quick history lesson: The U.S. stock market pulls back by about 13% every year, on average, before it recovers3. Even a steep drop of 20% or more tends to happen every three or four years!
Size of decline |
Frequency |
|---|---|
5% or more |
3 to 4 times per year |
10% or more |
Once per year |
15% or more |
Once every 2 years |
20% or more |
Once every 3 to 4 years |
Size and frequency of median equity declines on the S&P 500, on average, from 1928 to May 31, 2025. Source: 1832 Asset Management L.P.
But markets are resilient, and over time theyāve bounced back4.
Thatās why smart investing is less about market acrobatics and more about how you react to it. Are you:
a) panicking and cutting your losses whenever thereās a ācorrection?ā Or
b) riding out the valley until it peaks again, while focusing on your long-term goals?
Keep in mind how much you could stand to earn by staying invested for the best-performing daysāand how much youād stand to lose.
More cautious investors may consider one of our Balanced Portfolios, which are less concentrated in stocks and considered low-to-medium risk.
š Global markets
- Stock performance: International and Canadian equities outperformed the U.S. in April and May.
- What this means: Diversification for the win! Global diversification, a key strategy of Tangerine Portfolios, quietly did its job.
šØš¦ Canadaās economy
- GDP: Up in Q1 largely due to an export surge.
- Unemployment: Rose to 7.0% in May, the highest since 2016, excluding the pandemic.
- Inflation: The Consumer Price Index, which measures changes in the prices of a basket of common goods and services, reached 1.9% in June, up from 1.7% in May.
- Bank of Canada: Interest rates held steady at 2.75%, but upcoming cuts are possible.
- What this all means: While there are signs of slowing down, rate cuts may stimulate investment.
The Big Question
With Michael Allen, Head of Investments
Q: Looking back on this yearās economic uncertainty, is there anything you wouldāve done differently?
A: Well, you know what they say about hindsight being 20/20? My wife and I invested our 2025 TFSA and RSP contributions in early Januaryānot ideal timing, as it turns out! If Iād had a crystal ball, we would have done it in April instead.
But markets are unpredictable, and tariffs hit harder than expected. I still believe in investing earlyāthis experience doesnāt change that. Like everyone else, I felt the volatility in real-time. Weāre in this together.
š„ Watch: Michael Allen explains whatās different about investing at Tangerine
The short of it
Stay invested, stay calm and let the markets do the heavy lifting. Catch you next quarter š
Ready to start investing?
Weāve got simple options that keep your money working for you in the short and long term.
Investing is about building the future you want for yourself, and our team of Tangerine Advisors are here to help. Clients are encouraged to reach out at 1-877-464-5678 Monday to Friday from 8 am to 8 pm ET.
1 Diversification does not guarantee a profit or eliminate the risk of loss.
2 Holdings are not buy/sell recommendations
3 By average, weāre referring to the midpoint of the maximum drawdown, or potential loss, for the S&P 500 index each calendar year from 1928 to May 31, 2025. Source: 1832 Asset Management L.P.
4 Past performance is not indicative of future returns.
