May 29: Dealing With Economic Turbulence

May 29, 2025

How to stay calm and carry on during a period of tariffs and economic roller-coastering

There were some weeks in the past few months where we studiously avoided watching TV news or “doomscrolling” on social media. The tariffs, the bluster about annexation and statehood, the scary ups and downs of the markets – it’s a lot.

To figure out what to do we made a call to Janet Gray, an advice-only Certified Financial Planner with Money Coaches Canada.

Overall, her message was one of staying calm, and not being “impulsive or reactive.”

“We’ve been here before,” she says of the economic and market uncertainty, noting that there is usually volatility in the markets when there are big question marks on where the economy is going. She recalls similar wild up and down markets during the 9-11 crisis, the pandemic, and the credit crunch of 2008-9.

This current tariff war, she notes, is a brand of “idiocy we have never seen before,” but it’s having similar effects to previous uncertainties.

“The messaging for people is the same,” she advises. “It’s hold the course… don’t take on new debt if you can wait,” and think twice before making any big discretionary spending decisions. The tariff situation, she explains, has not yet played out fully but could lead to things like higher unemployment or higher interest rates.

You don’t want to buy a house or a car in a period where you might lose your job, or lending rates start to rise, she explains.

“This is a time to hunker down, and to support the local and national economy” by buying Canadian, she continues. There’s a crisis, sure, but it will have an end point, she predicts.

“Even after 2008/9, the markets did return,” she notes. Many sold off their positions in a panic; others chose not to “buy low” when market prices were way down.

“So, it’s a time for patience. Wait it out. Don’t watch a lot of media, and be prepared to talk with your financial adviser,” she says.

Volatile times for markets, and the potential for scarcity and higher prices for goods and services, would be managed more easily by those who have a good financial plan, she suggests.

“If people had a plan, they might not feel this way,” she notes, adding that any long-term plan ought to call for the setting aside of some cash reserves for a time of instability whenever that occurs. Another way to safeguard your savings from market swings is to “have a diversified portfolio in the first place.”

If you are young, say in your 30s, time is on your side and there are still decades coming your way with higher market returns, says Gray.

The market ups and downs are particularly worrisome for older folks who are facing mandatory withdrawals from their registered retirement income funds (RRIFs), she continues. For them, she recommends keeping enough cash in your portfolio to cover several years of scheduled withdrawals. That way you are avoiding “selling low” to cover the cost of your RRIF withdrawal, she explains.

She calls this a “cash wedge” strategy.

Another way to eliminate or reduce the RRIF withdrawal issue is to convert some or all of your RRSP to an annuity. “An annuity is a way of hedging your bets – you get the security and safety and confidence of continued payments even if the markets go down.”

In conclusion, Gray says we are in a period of “short-term pain,” so we focus on needs over wants and think about “reducing, minimizing or delaying discretionary spending.” Maybe take a small local vacation this year, and “go big in the future” when times are back to normal.

Planning, she reiterates, is essential. “Every dollar you make should have a job,” she says.

And don’t get scared by the headlines. “People react more to negative news,” she notes. Remember, she says, that slow and steady progress is the key to financial success, a “tortoise versus hare” way of thinking.

We thank Janet Gray, as always, for taking the time to talk with us.

Annuities are one of the retirement income options provided by the Saskatchewan Pension Plan. With an annuity, you convert some or all of your SPP account balance to a monthly lifetime payment. SPP’s annuities come in several varieties that offer benefits to a surviving spouse or beneficiary. Your annuity payment will never vary, even if market conditions take a downward turn.

Check out SPP today!

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Janet Gray, Money Coaches Canada

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