Buy Bay

The nasty TSX slipped to a record high close on Tuesday. Yeah. Another one.

Bay Street has advanced almost 15% so far in 2026 and is up 31% since last summer. That eclipses the mighty American S&P 500, where all the billionaires live.

Turns out the Iran war has been good for us. It’s also evident Trump’s tariffs, trade war, threats and insults have done diddly to hurt the Dominion. Investors who stuck with the Canadian market, sensibly holding an ETF embracing all sectors, have done well. In fact, more than well. In just eight months they have seen the kind of returns that accumulate after three decent years.

As mentioned the other day, we’re also creating far more jobs than America, with lower inflation (the US number came in today at 3.4% while we’re at 2.8%) and significantly cheaper interest rates. The latest forecasts also put our economic growth ahead of that of the USA.

These are some of the reasons Canadian stocks rock. And why you should own this market (as a third of the 60% equity portion of your portfolio). Consider holding ETFs for the composite index (11%), dividends (6%) and REITs (5%).

So why would maple be sizzling when Trump hates us, Alberta has been playing footsie with secessionists and Quebec’s election in October could see a resurgence in separatist sentiment?

Because that stuff is unserious, compared with what investors really want, which is making money. It turns out our market is beautifully positioned in this volatile world to do just that.

Bay Street has benefitted from a global rotation away from the over-hyped and over-valued US tech sector characterized by the SpaceX orgy and resultant flaccidity. We have a real economy, not a nation of weird, spooky, humming data centres. We’re resource rich. And we have a host of crafty bankers. A heavenly marriage.

By the way, these are the major sectors of the Toronto market:

Financials 36.1%
Energy 17.4%
Materials 15.6%
Industrials 10.5%
Info Technology 7.2%
Utilities 3.6%
Consumer Staples 3.3%
Consumer Discretionary 3.1%
Communication 1.6%
Real estate 1.3%
Health Care 0.3%

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Compare that to the American market where AI hysteria has pushed tech giants to a whopping 50% share of market capitalization. Now that more investors have decided to trade traditional for tech, Canada looks good.

We have precious metals, which have appreciated as doubts increase over the US$ and American bonds/debt. And, yup, we’re rich in uranium, critical metals and even boring fertilizer components. We have great banks, well-regulated, creative and expansionary. Net interest margins have benefitted from Canada’s stable monetary environment. Canadians owe these guys about $2 trillion in mortgages, with a weensy default rate.

Borrowing costs here are reasonable. The labour force is stable and well-educated. Health care is universal and a massive social advantage. To date our trade agreement with the US has sheltered us from 47’s failed 19th Century tariff policies, and now we have a majority federal government actively diversifying the economy away from dependence on a single, wonky customer.

Capital has been pouring into the country as a meaningful hedge against American unreliability, volatility and stupidity. That country is on the verge of electoral mayhem. Canada is comparatively serene and refreshingly boring, even with the yahoos in Alberta and the dreamers in Quebec City.

Trump’s crazy Iran war has jacked energy prices and directly fed TSX gains. Oil and gas companies are in great shape. The financial sector supporting them is also driving the market. We have world-class transportation and logistic companies, miners, refiners and also practical tech leaders like Shopify.

In this currently messed-up world, replete with serious wars, climate disasters and expanding political polarization peppered with racism, nationalism and protectionism, Canada shines. Investors are voting with their capital. You should be proud. And you should own it.

About the picture: “Hi Garth. Here is Jack, a friend’s golden doodle at their cottage,” writes Glenn. “Jack has a balanced and diversified portfolio of tummy rubs, table snacks and time in the lake. Thanks again for your timely advice coaching our household on proper money management.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2026/08/12/buy-bay/