Shiraz Ahmed explains his approach when clients come with emotion-driven desires to divest from US equities or move to cash
This week’s game of tariff brinksmanship appears to have left a lasting impression on Canadian consumers and investors. Calls to buy Canadian have resonated, even after the initial tariffs were delayed by 30 days. Social and traditional media report senses of betrayal and a desire among Canadians to show solidarity, fly the flag, and vote with their dollars against a deeper entrenchment with the United States.
As good as some of those emotional decisions might make Canadians feel, Shiraz Ahmed has to be a voice of reason for his clients. The Senior Financial Advisor & Senior Portfolio Manager of the Sartorial Wealth Team at Raymond James explained how he’s been addressing his clients’ mixture of emotions, whether that’s fear, rage, or pride. He outlined how other advisors can help manage those emotions for clients and prepare them for any outcome when the 30-day tariff delay runs out.
“It is a very fluid situation. I think a lot of Canadians are going towards a ‘buy Canada’ behaviour from a retail consumer standpoint as well. But everyone is starting to become a little bit more of a conscious consumer,” Ahmed says. “From an advisor’s perspective a lot of my work is about talking people through this now, asking them what their base case is and seeing if the US administration has done enough to derail their plans.”
In those conversations Ahmed works to pare the emotional responses that a politician like President Trump elicits away from the rational inputs an investor needs to consider. He reiterates the global importance of the US economy for investors and talks through the possible outcomes over the short, medium, and long term. He cautions against knee-jerk or emotional responses and outlines exactly what he and his clients know and don’t know, to try and inform more rational decision making during a period of heightened emotion.
While Ahmed has been cognizant of calls to buy Canadian, he hasn’t seen much of a trend towards investing Canadian. He notes that there will always be an element of conscious consumption in investing, whether clients are motivated by religion, moral values, or environmental concerns. He argues, though, that deepening home bias in response to US trade tensions may be a losing formula for Canadian investors.
Ahmed also specializes in cross-border services and has many clients making a move south of the border to pursue job opportunities. When they express concerns about their move, he notes the apparent end-goal of Trump’s trade policies. He believes the President wants to use tariffs to drive more industries to operate inside the United States. Clients who have pursued or are pursuing job opportunities in the US may actually be better served by this outcome.
In the meantime, Ahmed is controlling for market volatility. He is reminding clients that volatility is expected in any market environment and something that can be controlled for with appropriate diversification and behavioural control. His practice, he says, also has a quant-based model with an underlying algorithm, allowing his team to trade on risk. During periods of heightened volatility his model can adjust quite well because it’s driven by momentum. As he demonstrates that utility to clients he can also remind them that equities are not the only source of volatility out there. He views his own role as a risk manager and he believes that the onset of volatility due to Presidential decisions should be cause for all advisors to revisit their risk management processes.
As they work on their risk management, Ahmed also believes this is a moment for advisors to communicate clearly and frequently with clients. They need to be clued in to the news and have answers when clients come with scary headlines. He says that clients will be getting this information from somewhere and if an advisor isn’t ready with a response they can lose credibility in the eyes of the client. In these moments, too, it can be worthwhile to take a step back with the client and give them perspective on all the supposedly world-ending moments they’ve already lived through.
“The sky is always falling, but fortunately for us it never falls,” Ahmed says. “This too shall pass, it’s just the magnitude and severity before it does is to be determined. But we’ll get through this like we get through everything else. This isn’t even the first time there’s been a tariff war between the US and Canada.”
