Risks abound for Canadian investors, but here are three risk-mitigating strategies

financialpost.com:

It is helpful when investing to have a near-term view balanced by a longer-term one looking for trends that could turn into opportunities or realized risks.

In the next 12 months, there will be some important differences between Canada and the United States that, if you’re not careful, could have an impact on both your portfolio and your everyday life. In particular, we are worried that Canada may already be in a recession that is being masked by our high level of immigration. You can see this in the rising unemployment numbers and negative real gross domestic product per capita.

Therefore, this is not the time to take risks such as deploying excessive leverage to purchase a home or even a business, assuming you even have access to funding. Couple this with the material changes to capital gains inclusion rates and it may be worth exiting any rental or revenue properties and reconsidering reinvesting any free cash flow into an existing business opportunity or starting a new one, at least until we get better clarity as to a bottoming in the broader economic landscape.

Meanwhile, the U.S. economy is chugging along and is on a much more solid footing than Canada, with moderate growth, falling inflation and low levels of unemployment. The bottom line is that the average American is significantly better off than the average Canadian, who is being held back by significant affordability challenges paired with much higher taxation.

This is no doubt having an impact on our currency as the Bank of Canada will have to cut rates at a faster pace than the U.S. Federal Reserve. We do worry that this will worsen as our federal government doubles down on policies that got us here to begin with as a means to get re-elected in 2025.

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