By the time you read this we will have voted in a new prime minister for Canada. If history is any indication, not much will change. Politicians will make many impractical promises that go unfulfilled, the US will still be our biggest trading partner, innovation will continue to make the world more productive and increase a lot of people’s material standard of living. Another thing that will not change is that the simple pleasures of life, a good meal with friends, a walk with your significant other, being greeted at the door by the people that love you, or your loyal pet, will continue to provide more pleasure than your smartphone or social media ever will.

Economically, as investors try to sort out what’s next, one thing that many pundits have started to wonder about is the US dollar’s reign as the world’s reserve currency since the end of World War II; specifically, there’s talk that the US dollar could be toppled in favour of another currency. Currently, and as shown below, almost 60% of global currency reserves are held in US dollars, which is not much different than in 1980.

What does this mean for Canadians who often find this confusing? In foreign currency markets they call it the "cleanest dirty shirt". When you go in your closet and you find that all your shirts are dirty but you really need a shirt, you pick the least dirty shirt! The maxim speaks to the fact that the US economy is not perfect, as is currently evidenced, among other things, by reckless fiscal spending, a mercurial commander in chief, and an erratic tariff policy; however, none of that discounts the fact that the US is incredibly productive, follows the rule of law, innovates, and attracts global capital, so we can see why they will continue to be our largest and most powerful trading partner for the foreseeable future.

So what does any of this mean for you as an investor? Continue to follow your financial plan and we’ll continue to invest in sound and growing companies that have dominant positions in Canada, the US, and around the world. It is important to remember that the leaders of these companies are stewards of capital, which often includes their own, and they go to work every day to compete and exploit opportunities. They do not stand still, they cut costs, and they will use AI to increase productivity.

In essence not much will change!

Randy, Ian & Harrison