Jan 22, 2025
While we adhere to strict editorial guidelines, partners on this page may provide us earnings.
Canadian markets have shown resilience in the last 12 month, with the S&P/TSX Composite Index and key sectors such as energy and financials posting solid gains. However, renowned investor Jim Rogers warns that a financial storm is looming. In a recent interview with ET Now, Rogers cautioned that the North American equities markets are long overdue for a major financial correction. “When the next market collapse comes, it’s going to be the worst in my lifetime.”
With this ominous prediction, Canadian investors may be reevaluating their portfolios. Rogers recommends focusing on cash and defensive assets like precious metals and agriculture as part of a protective strategy.
Hoarding cash: Jim Rogers' economic collapse investing strategy
Rogers, who co-founded the Quantum Fund, has navigated through turbulent markets before, notably during the economic turmoil of the 1970s and again during the dot com bubble and burst. As a result, the esteemed investor has learned a thing or two about weathering a market storm.
Advertisement
Based on his experience, Rogers suggests holding a significant amount of cash in preparation for the next collapse.
“I am not spending my cash yet. I would like to have more cash because, when the next market collapse comes, it’s going to be the worst in my lifetime,” Rogers said.
He continues with a few other solid suggestions: “If I were buying today — and I’m not — I would probably buy silver or agriculture.”
In Canada, investors may want to consider a similar approach. Keeping cash in a high-interest savings account or short-term Canadian government bonds, such as T-bills, can offer some security while preserving liquidity for future opportunities.
Must Read
- Stop the leak: 5 costs Canadians (still) overpay for every single month. How many are sabotaging your 2026 budget?
- What's your worth? Here are the 3 net worth milestones that change everything for Canadians (and what they say about you)
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and that ‘anyone’ can do it
Keeping cash in a high-interest savings account
Keeping cash in a high-interest savings account can be a smart hedge during a stock market correction as it keeps your earnings safe from market volatility.
Keep in mind that, during a stock market correction, many investments lose value rapidly, and liquidity becomes crucial. By keeping your investment cash in a high-interest savings account, your cash balance is secure and unaffected by market swings. This ensures you have readily accessible funds to cover expenses or invest when better opportunities arise.
Holding cash during a market correction puts you in a strong position to exploit investment opportunities. When stock prices fall during a correction, many high-quality assets can become undervalued. Cash on hand allows you to buy stocks, bonds or ETFs at lower prices, capitalizing on the potential for future growth once the market recovers.
Advertisement
While cash may not deliver the high returns of other investments in the long run, holding cash in a high-interest savings account during a stock market correction provides liquidity, safety and the opportunity to buy assets at discounted prices, making it a valuable hedge against market volatility.
In you're looking for a high-interest savings account, Scotiabank is one of North America’s premier financial institutions and Canada’s most international bank. Scotiabank offers a broad range of leading products and services, including HISAs.
Precious metals as a hedge against uncertainty
Precious metals like gold and silver are often seen as hedges against inflation and economic uncertainty, primarily because they cannot be printed by central banks like traditional currency. In the past 12 months, gold has drawn significant attention from investors, reaching new record highs as concerns over inflation rise.
Read More: How to invest in defensive stocks in Canada
Silver, while also rallying this year, remains well below its historical peak. Rogers noted this discrepancy as a reason for his interest in the metal. “Silver is down 40% or 50% from its all-time high... Gold has been making all-time highs,” he explained. “Silver is down — it’s hard to find things that are down.”
For Canadian investors, exposure to precious metals could be achieved through gold mining stocks like Barrick Gold (NYSE:GOLD) or Franco-Nevada (NYSE:FNV), which have performed well amid rising commodity prices.
You May Also Like
- Here’s how to retire in 10 short years no matter where you live in Canada — even if you’re starting with $0 savings
- If you’re still feeling the pinch this month — don’t panic. Here are 5 easy ways to fix your finances without a total overhaul
- How Warren Buffett’s simple buy-and-hold real estate approach offers a lesson for Canadian homeowners and long-term investors
- Approaching retirement with no savings? Don’t panic, you're not alone. Here are easy ways you can catch up (and fast)
Romana King is the Senior Editor at Money.ca. She writes for various publications, and her book -- House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth -- continues to be an Amazon bestseller. Since its publication in November 2021, this book has won five awards, including the New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award in 2022.
