Sell America

Last year we rocked.

If you owned a Bay Street equity fund, you know. The total return for the TSX was a thrilling 32%, the best gig in more than 15 years. The banks were hot. Golds were torrid. The dividend yield was sweet. And we creamed the Yanks.

In contrast, the total return (capital gains + dividends) of the mighty S&P 500 was a mere 17.9%.

So, what now? Can we do it again? In fact, given recent events is it time to step back? To sell America? Pig out on maple?

Was Trump’s atttack on the Fed the last straw?

Lots of people are talking about bailing on the US, chatter which has grown louder since the rabid president allowed a Grand Jury subpoena to be issued against Fed boss Jerome Powell. Trump called him “that jerk” in a speech yesterday in Detroit, keeping up a year-long attack on the central bank boss because he won’t slash interest rates, fast and deep.

The criminal allegation against Powell – that he lied to Congress regarding renovations to the Fed’s century-old buildings, which cost a bundle – is a sham of course. We all know it. Powell said so in his historic Sunday night vid. Trump wants to personally control monetary policy of this global institution and is willing to lie and cheat to gain it.

At this point we all think Powell will win. Mr. Market shrugged it off Monday morning, but not before stocks dipped, bonds flared, the US$ fell and gold rose. The very idea was at the same time chilling and ridiculous.

But wait. So much about the US is, well, weird.

The Fed attack is unprecedented. It speaks ill of the president in new and unique ways.

But he’s also turning into an autocrat. Some say America is quasi-fascist already.

Armed, masked paramilitary troops on city streets. Disappearings of residents and even citizens. Racial profiling approved by the highest court and routinely used by federal agents. The invasion of a sovereign country and kidnapping of its boss. The new assault on Greenland and the potential blowing-up of NATO. Crippling global tariffs and trade war. Now threatened intervention in Iran. Withdrawals from international agreements. Lawsuits flying. Criminal indictments of political foes. Mass deportations of brown people. Pardoning of January 6th criminally convicted. Treaties abrogated. The abrupt gutting for foreign medical aid, causing death. Attacks on universities and law firms. Missile strikes on private boats in international waters. Renee Good.

Whew. Do you really want to support this?

Many say no.

Canada is better. Sell America, they urge. Buy gold, Europe, Asia and any decent ETF heavy on international and light on USA.

So it’s no coincidence Bay Street has done great. Or that bullion jumped insanely during year one of Trump 2.0. Or that the American dollar dropped 8% in the last year. There are millions of investors now walking away from the States, worrying that Trump will become more extreme as his term heads to a conclusion, that the White House will try and torpedo the coming midterm elections (November), that the Fed will ultimately be corrupted impacting the entire global financial system, or that – gulp – this guy turns into Putin or Xi.

Others say only fools would bet against America.

This is the largest economy in the world. The greatest military. The most innovative society. The dominant culture. The leading companies. The mother of technology. Resilient, freedom-loving citizens. How could you be a serious investor without exposure to it?

Indeed. Look at profits. They move markets more than a rogue leader.

Corporate earnings are expected to hit double-digits again in 2026, from the small caps right up to Nvidia and Apple. FactSet data suggests boffo bottom lines in every quarter of the year, peaking in Q4 and coming in for an annual return of 15% or so.

Yes, the employment picture in the States is weak. Yup, inflation will probably return. And, it seems likely, interest rates will remain stuck in place until at least the summer. In the meantime, Trump can and will do anything he wants, pushing the boundaries of legality and history, while seeing that his family is enriched.

It’s a mess. Probably a tragedy. It will take a long, long time for America to recover.

But sell it?

Not a chance.

About the picture: “I am sending a few of my very many pictures of my favourite dog, Rosie,” writes Brooke. “She is a 5 year old lab collie cross. Many thanks for everything you do on your blog, keeping people informed and educated.”

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

Source: https://www.greaterfool.ca/2026/01/14/sell-america/