In maple we trust

If you were guided only by the malcontents on this pathetic blog you’d never invest in Canada. And that would be a mistake.

You need to own some maple. In a B&D portfolio with 60% in growthy stuff, a third of that should be Canadian. Despite Drake and Danielle Smith, there are solid reasons why sticking the TSX into your retirement or investment account is more than patriotic. It’s wise.

First, performance. So far this year the main stock index is up (as I write this) by 10.7%. That beats the vaunted S&P 500 (ahead 8.6%) plus the Dow (up 5.4%). In the last 12 months, Bay Street has soared 20.8% in value, again beating the American indices.

Why?

The bulk of the TSX is made up of financials and resources. Our banks are respected globally, prudently-run, massively profitable, professionally regulated, safe and – especially – stable in a crazy world. As for resources, the world’s appetite for oil, copper, energy and minerals is insatiable. Canada is well-positioned, all the way from AI to the dirty, greasy business of drilling wells. No matter what Trump does or how the trade wars progress, these sectors will endure and thrive.

Second, these are good days to diversify beyond the USA. Not since the days of robber barons has America been trending so heavily towards protectionism. Tariff walls may have worked in the past, but it’s been globalization that’s made human life materially better. That’s been the result of technology. Witness TikTok, X, Facebook and even Truth Social erasing borders, melding cultures and allowing corporations to find the most efficient way of finding markets, growth and production.

Trump is an interruption. Not a profound change. Don’t bet against America, but also don’t put all your eggs in that basket. More chaos lies ahead. Canada is an excellent refuge. Like our banks, we are wealthy, stable and well-run by incredibly boring people.

By the way, the main index in Canada – the S&P/TSX – is made up of 225 of our biggest companies representing 80% of the capitalization of the entire market. That’s close to $3.5 trillion, about a third of which is in the big banks alone. (The entire Canadian economy is $2 trillion.)

There are eleven sectors to the market, and to be listed all the companies must be Canadian – either incorporated or established here, regulated here, with most assets here and with their HQ in Canada. There are strict rules for the two hundred which make up the index in terms of capitalization, share price and liquidity. This is vastly different from the world of crypto, or even the major small-cap markets. Like we said, b-o-r-i-n-g. But also profitable.

The biggest players?

RBC, TD, Shopify, Enbridge, CP, CN, Canadian Natural Resources, BeeMo, Brookfield. The index is rebalanced four times a year to ensure the rules of eligibility are met.

So, how do you invest?

Sure, you could buy shares in the ten biggest guys. Or you could gain more diversification and stable returns by purchasing stock in all 225 corps that make up the index. Studies have consistently shown that in order to achieve even modest diversification, which dampens risk, an investor needs to hold at least 60 individual companies.

The cheaper, faster, better way is with an ETF. There are a bunch of exchange-traded funds giving exposure to the Canadian equity market which also have great liquidity and low embedded fees. As you likely know, all of the portfolios that my suspender-snapping, disturbingly capitalistic colleagues build are made of ETFs. No individual stocks. It works.

For example, ZCN includes 200 big maple stocks which make up 95% of the entire market. Index weights are capped a 10% of the market capitalization – so this fund (like a few others) will pretty much mirror what the entire shebang does.

Yes, America is great for teenage marching banks, the Epstein files, SpaceX, Lady Gaga, billionaires and bullies, but you need to own Canada. Now more than ever.

About the picture: “Here is Sophie, a breed representative of the national dog of Cuba, who lives a life of luxury in the Ontario cottage country heartland,” writes  blog dog who wishes to be anonymous. “Spoiled rotten, she enjoys the great outdoors, forest bathing, and the companionship of her owner who is equally spoiled.  Despite dodging some serious medical procedures she maintains an unmatched level of vitality.  A positive attitude can go a long way in life, she says.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/07/30/in-maple-we-trust/