Skip to main content

Featured

Canadian Money Brief: 5 Things to Know Today — May 18, 2026

  A quick scan of the five stories shaping your wallet right now — from the Bank of Canada's next big decision to your mortgage renewal and a brand-new federal agency hunting financial criminals. 1 Bank of Canada Rate Holds at 2.25% — Next Decision Is June 10 The Bank of Canada kept its overnight policy rate steady at 2.25% at its April 29 meeting, citing a rise in energy-driven inflation and ongoing uncertainty from U.S. tariffs. Governing Council held firm while acknowledging a rate hike could become necessary if oil-linked price pressures prove persistent. The next announcement lands on Wednesday, June 10, 2026 — mark your calendar. Why it matters: Your variable-rate mortgage, HELOC, and lines of credit are directly tied to this rate. With bank prime rates sitting at 4.45%, every meeting counts. 2 Markets TSX Slips Below 34,000 as Bond Yields Spike The S&P/TSX Composite Index finished last week down close to 2%, sliding under the 34,000 mark. A global bond market selloff...
Post a Comment
Read more

article

Labels

How to Prepare Your Investments for Rising Rates in Canada

 

On October 25, the Bank of Canada made a decision: they kept the interest rates steady at 5%. This means that investors need to adjust their portfolios to cope with the new normal of higher borrowing costs and lower bond prices. Here are some tips on how to do that:

1. Reduce your exposure to long-term bonds. Long-term bonds are more sensitive to interest rate changes than short-term bonds, so they will lose more value when rates go up. You can switch to shorter-term bonds or bond funds, or use bond ladders to stagger the maturity dates of your bonds.

2. Diversify your income sources. Interest income from bonds will likely decline as rates rise, so you may want to look for other sources of income, such as dividends, real estate investment trusts (REITs), or preferred shares. These assets can provide steady cash flow and may also benefit from economic growth and inflation.

3. Consider adding some inflation protection. Higher interest rates often come with higher inflation, which erodes the purchasing power of your money. You can protect yourself from inflation by investing in assets that tend to rise in value when prices go up, such as commodities, gold, or inflation-linked bonds.

4. Review your asset allocation. Higher interest rates may affect the performance of different asset classes, so you may need to rebalance your portfolio to maintain your desired risk-reward profile. For example, you may want to reduce your exposure to growth stocks that rely on cheap debt to fund their expansion, and increase your exposure to value stocks that have strong cash flows and dividends.

5. Seek professional advice. Adjusting your portfolio for higher interest rates can be complex and challenging, especially if you have a long-term horizon and multiple goals. You may want to consult a financial planner or advisor who can help you create a personalized plan that suits your needs and preferences.

Labels:

Comments

Post a Comment