Plus: cars that charge faster than it takes to read this newsletter March 24, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🥤 Prebiotic pop 💔 Divorce drama 📉 Shaky stocks? Soda makers have experimented with unhinged flavours for a while, like New Coke. Now they’re investing in equally curious fizzy drinks. | Coca-Cola THE WEEK IN MARKETS Everything But America The markets were mostly flat last week, but the storyline of 2025 has come into clear focus: the resurgence of EBA — Everything But America. Since January 1, U.S. stocks are down 5%, Canadian stocks are up a smidge, and global stocks outside the U.S. are up 9%. During the tech-driven rally of the past few years, investors were so smitten with U.S. tech companies, and so cool on everyone else, that TINA — “there is no alternative” to U.S. tech — became something of a mantra. Now market analysts are hyping up new global tech super-groups with names like the Terrific Ten that stand to rival the Not-So-Magnificent Seven. What changed? For one, Trump 2.0 mayhem — his tariff barrage, his plans to gut civil services, his shift away from NATO — alongside cresting fears that U.S. tech stocks have become overvalued. Or, maybe this whole EBA storyline will end up being wrong. We’re only three months into the year, after all, and this is far from the first time global observers have clucked about the end of U.S. dominance. THE WEEK IN ONE NUMBER $25 If every household spent this much on Canadian, rather than American, goods every week, our economy would grow by 0.7% and support 60,000 new jobs. WHAT HAPPENED LAST WEEK IMPORTANT Canada pulled in its welcome mat. The population grew at the slowest pace in three years, rising by just 1.8% in 2024, down from 3.1% in 2023. Ottawa’s about-face on immigration explains why: in 2024, the number of non-permanent residents entering Canada decreased for the first time since 2021. Immigration has become a divisive issue among the public, while economists hold that it’s critical to a healthy economy. What should our next prime minister do to keep everyone reasonably happy? One suggestion via The Conversation: Canada has a golden opportunity to lure innovation-boosting researchers here now that President Trump is slashing funding to top U.S. universities and thereby improve our global competitiveness. First, though, Ottawa would need to drop its plan to cap the number of international grad students it lets in. Charging your car could be as fast as filling your gas tank (and buying a slushie). Last week Chinese automaker BYD rocked the EV world when it announced that its new charging system lets drivers travel 400 kilometers on just a five-minute charge. That’s enough juice for a trip from Toronto to Ottawa, or at least it would be if BYD cars were available in Canada. Battery technology has come a long way in a hurry: 10 years ago, trying to charge a car quickly risked it bursting into flames. Now the hottest question is how fast other EV markers will be able to catch up to BYD. INTERESTING Coke and Pepsi bet big on weird-tasting soda. Both mega-brands are investing heavily in “prebiotic beverages,” which are sodas made with fibres like chicory root and nopal cactus that boost gut health. Pepsi just bought Poppi for US$2 billion, while Coke has launched its own prebiotic brand, Simply Pop. The so-called functional beverage market — which also includes sports drinks, vitamin drinks, etc. — is growing by 10% per year and is expected to hit almost US$200 billion globally by the end of 2026, up from $120 billion in 2021. Prebiotics are just the latest entry in the “healthy but not water” market segment, presumably aimed at the same people who insist Coke Zero “tastes just like Coke.” Man accuses wealth manager of stealing his money and his wife. A UBS client has alleged in a recent lawsuit that, in 2023, when he arrived to finalize a separation agreement with his soon-to-be ex-wife, he was surprised to discover that: a) his new UBS wealth manager was there, b) his new wealth manager demanded that he pay his ex-wife over $9 million, and c) oh by the way, his new wealth manager was sleeping with his ex and together they’d allegedly schemed to get him to move the family trust to UBS. Surely, there’s a rule prohibiting investment managers from dating their clients? Nope — not in Canada or the U.S. (the $9 million ask might be another story). —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🍽️ Lean Cuisine frozen meals recalled for containing “wood-like material” (other than the food). Source 📰 Italian newspaper creates an edition completely generated by AI. AI now seeing what it can do to generate some readers. Source 🏙️ Feds providing $2.55B in low-cost financing to build Toronto rentals. Finally, the relief real estate developers so desperately need. Source 💰 Report: Gen Z will be the richest generation by 2035. Researchers think it’s due to an excess of disposable mad rizz. Source CRASH & BURN TO THE MOON 🍔 McDonald’s is once again testing plant-based burgers in Canada to make absolutely sure no one wants them. Source 💊 Science determines that most treatments don’t help back pain. Luckily your Tommie Copper back brace just looks cool. Source 🏦 Starting next year, Canadian banks will cap overdraft fees at $10. But the lollipops will cost $35. Source 🏕️ 83-year-old B.C. man returns camping book to library after 64 years. He doubts he’ll be pitching any more tents. Source WHO CARES THE BIG IMPORTANT STORY INVESTING Stocks Have Been a Reliable Bet for Decades. Is That Changing? As we mentioned up top, the vibes in the stock markets are not terrific. Six months of gains have evaporated in weeks, and, with more Trump-driven turbulence likely on the agenda, some market watchers have begun to doubt whether the U.S. will continue to deliver world-leading economic growth. And, since U.S. companies account for roughly 60% of global stocks, there’s lots of chatter about whether equities in general will continue to deliver strong returns. So, is it time to dump your stocks and invest in other assets? Let’s discuss! Stocks always go up — right? The conventional wisdom — mentioned here often! — is that one of the best ways to build long-term wealth is to invest in a diversified portfolio heavy on stocks, particularly U.S. stocks. The logic follows: governments want capitalism to keep chugging along, so they’ll usually step in to juice the economy (by cutting interest rates, say) whenever things turn south, thereby avoiding long periods of negative stock returns. That’s why, though stocks can be risky in the short term — beating bonds only about 60% of the time over one-year horizons — they’ve historically outperformed other assets over long stretches. In his book Stocks for the Long Run, the economist Jeremy J. Siegel notes that, from 1801 to 2021, U.S. stocks beat bonds 74% of the time over 10-year horizons and 92% of the time over 30-year periods. (The TSX’s long-term performance is roughly similar.) That’s pretty great! It seems like there’s a “but” coming here. Yep. Even before all the recent market unpleasantness, researchers armed with new data had been poking tiny holes in stocks’ reputation for bulletproof outperformance. One paper found that U.S. stocks in the 19th century performed worse than previously thought. (Because of a giant bank collapse, many investors who held their money in U.S. stocks for 30 years would have made as little as 2% annually.) Stocks in countries besides the U.S. have underperformed at times too. The average annual return on French stocks since 1900 is a modest 3.4% after inflation, compared to 6.5% for the U.S. Italy has done worse: 2.1%. Then there’s the famous example of Japan’s so-called lost decades, a 30-year downturn after its stock market blew up in 1990. So is it time to get out of stocks altogether? Well, hold on. Sure, things look shaky, but they also looked that way after the 2008 financial crisis and the 2020 pandemic crash, and if you had panic-sold back then, you would have missed the epic rebounds that followed. To be sure, nothing in life is certain; we can’t tell you what lies ahead for stocks, be it in the U.S., Canada, or globally. But if you’re worried about being overexposed to any one market, consider the fact that diversifying globally has been a decent bet historically: according to UBS, from 1900 to 2023, global stocks excluding the U.S. returned 4.3% annually after inflation, far outperforming global bonds’ 1.4% return over that period. Add the U.S. to the mix and the global return looks even better, rising 5.2% annually over 123 years. Mind you, those gains came despite two world wars, the Great Depression, and enough economic turbulence to fill a textbook. Point being: if the future is anything like the past (fingers crossed it’s better), investing in stocks will continue to be a reasonable way of growing wealth — because even if the U.S. or any other one country falters, markets globally will likely find a way to keep marching up. —Ben Mathis-Lilley OTHER VERY GOOD READS 🔨 How to Fix Housing Twenty-five doable ways to make Canada affordable again. | Maclean’s 🚂 The Job That Changed Graydon Carter* The legendary editor on the Canadian National Railroad. | The Atlantic 🗳️ It’s Officially Election Time Catch up on federal politics before the April 28 vote. | The Walrus *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF SOCIAL Toronto is basically New York’s stunt double at this point, so why not. THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Dan Xin Huang (news editor), (Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Eva Grace Clement Cruz (editorial producer), Matthew Karasz (markets editor), Jared Sullivan (senior editor), Peter Martin (senior editor), and Devin Friedman (editor-in-chief). Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE A friendly reminder: Wealthsimple and the Canada Revenue Agency will never ask for personal or financial information via email, including your SIN, account password, or banking details. 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