Why U.S. Stocks Still Belong in Your Portfolio — Even Now

I’ve had a few questions over the past month asking me whether it still makes sense to hold U.S. stocks amid rising political tensions and an increasingly divisive trade landscape. By most economists’ standards, there’s an overwhelming sentiment that holding U.S. equities remains a smart choice.

For many, ethics and political sentiment take a backseat to a broader truth: U.S. markets are deeply interwoven with global innovation and progress. Holding U.S. equities is less about nationalism and more about aligning with the engines of global change.

This logic resonates when you consider the theory of creative destruction, first proposed by economist Joseph Schumpeter in 1942. Schumpeter described how economies evolve through waves of disruption - where old systems collapse, and new ones rise in their place.

At the turn of the 20th century, it was the railways that redefined urban life and commerce. In recent decades, it was the internet, reshaping media, retail, and communication. Today, we’re entering a sixth wave - defined by artificial intelligence, robotics, IoT, and clean tech.

These technologies are not only transforming industries; they’re altering how we live, work, and think. And where is much of this innovation headquartered? Right in the U.S.

Eight of the ten largest companies in the world — Microsoft, Apple, Amazon, Google, Meta, Nvidia, Broadcom, and Tesla — are U.S.-based. They’re also leaders in AI, digitisation, and robotics. The U.S. market has become synonymous with the innovation economy, and many Canadian investors have taken notice over the years.

From a macro perspective, decisions should be made on the best long-term outlook for the economy, rather than focusing on the current storm. While Canadians may forgo buying U.S. retail goods during this tariff war, including U.S. equities in a portfolio means Canadians will be spending those allocated dollars on Canadian goods and services at some point in the future.

Yes, the current U.S.-Canada trade outlook is rocky. Yes, political headlines may make some investors uneasy. But as history has shown, rational investing is about diversification, innovation exposure, and maintaining a mid to long-term focus.

While we don’t have to agree with a country’s leadership, recognising its significant role in shaping the future of how we go about our daily lives can’t be overlooked.

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