You’re not crazy. The economy doesn’t just feel different, it IS different

Canada is struggling to get a grip on stubborn inflation pressures; it’s facing tariff threats from its southern neighbours every other week, it seems; and people are feeling nervous about their jobs – in part because of AI-driven restructuring.

Stock markets hate uncertainty, but Canadians on Main Street are bound to feel it more acutely than those on Bay Street. It’s no secret that women tend to absorb the impact first and longest through career interruptions, caregiving responsibilities, and greater income volatility over a lifetime. In fact, a recent report showed that 71 per cent of jobs held by women in Quebec are in professions highly exposed to artificial intelligence, compared to only 49 per cent of jobs held by men.

For women investing in Canada, these uncertain times might have you thinking you need to sell your investments and stuff that cash under the mattress. If this is you, I’d encourage you to avoid taking knee-jerk steps out of fear. Instead, this is exactly the time to ask better questions and thoughtfully review your situation.

Step 1: Review your portfolio with intention, not fear

A portfolio review is a reminder of why you set up your investment strategy in the first place.
Before changing anything, ask yourself: What is this money for? When will I realistically need the funds (which determines your time horizon)? And what risks matter to me right now?

Market volatility is uncomfortable, but the real risk is selling your investments at the wrong time out of panic or because your investment strategy no longer fits your life circumstances. That’s why being clear about your personal risk tolerance matters far more than confidence in the market.

Step 2: Determine what a healthy cash buffer is for you

Having safe, liquid funds is important for emergencies – a buffer in case you need car repairs, are concerned about losing your job, or simply want some emotional comfort during turbulent times.

But before you move money into cash, think about what you’re really seeking. Are you looking for protection, or are you looking for certainty? And do you understand the cost of holding too much of it?
Cash can feel safe in the moment, but at these rates of inflation, your purchasing power can quickly erode. Too much liquidity can also mean missing out on long-term compounded growth.

Bottom line: cash can support resilience without having to weaken your financial strength.

Step 3: Understand how to leverage RRSPs and TFSAs

How you hold your investments is just as important as what you invest in.

RRSPs are primarily used for retirement savings, and while they provide long-term, tax-deferred growth, they’re less flexible for short-term needs.

TFSAs can be used for a multitude of reasons while also providing tax-free growth. Also important is that withdrawals don’t trigger tax consequences, and you can restore the contribution room in the future.
In uncertain times, liquidity and optionality are important, and yet too many women are underutilizing the strategic flexibility that TFSAs offer, especially when life circumstances change unexpectedly.

For more information on different investment accounts, read Tax Shelters 101: The Accounts That Build Wealth Faster for Canadian Women.

Step 4: Check for home bias risk

Canada represents roughly 3% of the global equity market, yet many Canadian portfolios are heavily concentrated in domestic stocks. This overexposure is known as home bias, and while investors like to be in something familiar, familiarity doesn’t mean you’re diversified.

Exposure to other economies helps reduce systemic or concentration risk so no single economic shock derails your portfolio returns. So be sure to spread your investments beyond Canada’s borders and across asset classes.

For women investing in Canada, you shouldn’t have more than 40% allocated to equities in your home market.

Step 5: Allocate more weighting to defensive assets

Certain sectors and types of stocks have historically demonstrated more stability during economic turbulence.

For example, financials like banks and insurers, utilities, telecommunications, and consumer staples, tend to be less sensitive to economic cycles because regardless of how the economy is doing, people still need to do business with them. They also tend to generate steady cash flow and pay out dividends, which helps smooth out volatility.

You can’t completely eliminate risk, but you can manage it thoughtfully.

Step 6: Revert to dollar-cost averaging

Volatile markets prey on fear and anxiety, and you’ll be tempted to try to time the market.
However, trying to predict when to buy or sell almost always leads to missed opportunities and unnecessary stress. If your stress is running high, use the dollar-cost averaging method, which involves investing a fixed amount at regular intervals, regardless of market conditions.

For women investing in Canada, this strategy will reduce pressure to try to get as much information as possible before deciding. Because in the end, you can’t possibly know how markets will fare. You can’t outsmart the market. But you can build confidence by showing up steadily and letting time do the work.

Final Word

No investment portfolio is foolproof, and we can’t directly control the economy or policies that shape it. But we can deploy resilient strategies: being clear about our goals, diversifying our portfolio, using the right accounts and automating investments so we take emotions out of the equation.

The goal isn’t to outguess the economy. It’s to build an investment strategy strong enough to carry you through it.