Plus, is AI giving you brain rot? February 18, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🏗️ Tin taxes 🧠 AI imbeciles 💰 Cash comparisons Bad news, Americans: the price of protecting your noggin from mind control is probably going up. We explain below. | Touchstone Pictures THE WEEK IN MARKETS Investor trivia time! What’s been the top-performing asset so far in 2025? It’s not Bitcoin, or Nvidia, or the S&P 500, or Big Tech’s Mag 7. It’s good old-fashioned gooooold, which is up 10% year-to-date, up about 50% since this time last year, and scoring all-time highs seemingly every week as it closes in on CAD$4,200/oz. (US$2,950/oz.). This rally is a big reversal from a few years ago, when speculators bet that high interest rates and the rise of cryptocurrencies would cost gold some of its shine. This Bloomberg piece dives into why the bears were wrong, but the upshot is (1) rates have started coming down, which means cash isn’t yielding as much in the bank and is therefore less desirable, (2) Chinese and Russian investors are scooping up gold to blunt the impact of potential future U.S. sanctions, and (3) ordinary investors are sick of watching inflation eat up their gains in dollars, so they’re buying up gold bars from Costco and crossing their fingers it keeps enjoying a speculative surge. Even if it doesn’t, gold has long been seen as a safe haven, and in these, let’s say, interesting times, safety has a lot of appeal. WHAT HAPPENED LAST WEEK IMPORTANT Should you buy the dip? With Trump back in office, the only certain thing seems to be policy uncertainty, which has led to some turbulent days in global markets. Some retail investors have been trying to surf the chaos by strategically buying the dips — i.e., waiting for routs, then scooping up stocks before they recover. That’s what many did after the recent mini-crashes caused by DeepSeek and tariff announcements. So, should you follow the dip-buyers’ lead? Goldman Sachs has suggested probably not, because investors rarely time the markets as well as they think they can, and it’s easy to miss out on big returns as you wait for the perfect moment to jump in. Americans will have to pay more for their tinfoil hats. The U.S. is moving ahead with a 25% tariff on all steel and aluminum imports. Canada is America’s top supplier of both, with exports of US$7.5 billion in steel and US$9.4 billion in aluminum last year. President Trump has claimed supplies of both metals can easily be replaced by domestic producers. And yet, as Scotiabank’s Derek Holt pointed out, the U.S. aluminum industry itself has admitted that its smelters are running at full capacity, meaning American companies will still have to rely on imports in order to meet demand — imports that will now be more costly thanks to Trump’s tariffs. Hence former finance minister Chrystia Freeland called the tariff “economic self-mutilation.” Here in Canada, the metal levies could jeopardize 43,000 jobs. INTERESTING Using AI makes you dumber. Or at least that’s how many headlines framed a new study from Microsoft (a major investor in OpenAI) and Carnegie Mellon. According to the study, workers who regularly relied on AI to do their jobs reported feeling as if their cognitive abilities had “atrophied.” But the researchers also point out that people have been off-loading tasks to technology since the invention of the wheel — remember when we used to memorize phone numbers? — and it doesn’t necessarily make us less bright. They suggest AI could be designed to foster critical thinking — by explaining its reasoning, say — which could boost worker efficiency and corporate profits. That’s what Wall Street is banking on, with early case studies suggesting AI could increase worker productivity by 25% — about how much the PC juiced worker efficiency a generation ago. No wonder some AI funds are up as much as 50% over the last year. “We didn’t build this great company by doing the same semi-diseased sh— that everyone else does.” That is the money quote from an internal town-hall talk that JPMorgan CEO Jamie Dimon gave last week. (Someone leaked the audio to Barron’s.) What semi-diseased, uh, stuff was the mega-banker referring to? Work-from-home, which has been at the centre of an ongoing tug-of-war between C-suite execs and their employees. —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🤖 Study conducted by BBC journalists finds that chatbots distort news stories. BBC journalists don’t care, just happy to still have jobs. Source 📉 Meta lays off 4K largely well-reviewed employees for bad job performance. They underperformed by assuming any of that mattered. Source 🇨🇦 Tim Hortons might switch to Canadian suppliers to avoid U.S. tariffs. Confident they can make everything taste just as bad. Source 👔 Canadians cancelling streaming services to protest tariffs. Too bad, nothing eases the sting of a trade war better than 83 hours of Suits. Source CRASH & BURN TO THE MOON 🫥 Poll finds more than half of Canadians feel “financially paralyzed.” The rest are just having some financial numbness and tingling. Source 🍺 Aluminum and steel tariffs could hurt U.S. craft-beer breweries. Craft-beer guys desperately searching for something else to define their entire personality. Source 📳 BuzzFeed launching social-media platform to “spread joy.” Perfect if your idea of joy is meeting other people who take Buzzfeed quizzes. Source 🍳 Cooking eggs “too stressful” for Gen Z. Just gonna watch a few hundred omelette tutorials and go to bed. Source WHO CARES THE BIG IMPORTANT STORY SAVINGS We Asked 2,500 Canadians to Be Honest About Money. Here’s What We Learned People don’t tend to talk that freely about their financial situations, even with friends. As a result, the brain is left to make assumptions. And whenever the human mind encounters a void, it often fills it with negative thoughts — in this case, the nagging suspicion that everyone else is in a better financial spot, and less anxious about money, than you are. Which, turns out, isn’t true! We (or, slightly more precisely, our sponsor, Wealthsimple) recently hired a research firm to ask 2,500 people from various provinces, backgrounds, and income levels — who together form a representative sample of the country — nosy questions about money. Here are some of the things we discovered. (You can find a full breakdown — and test your other assumptions! — here.) Finding #1: Pretty much everyone worries about money! Two-thirds of respondents said they were “often” stressed about their finances, including three-quarters of those under age 35. That’s compared to a 2018 study which found that only 23% of Canadian adults felt excessively stressed most days, so anxiety seems to be on the rise. (Nothing like a global pandemic and intensifying trade tensions to shake the nerves!) Women and residents of big cities were extra likely to be stressed about finances. Finding #2: The high cost of living is a big concern. Respondents said they earn, on average, $56,832 a year before taxes (which is in line with official StatCan data). Subtracting income tax and other deductions leaves them with around $40,000 — then take out another $15,000 for rent or mortgage payments, which have been growing sharply in recent years. We’re left with approximately $25,000, or barely $2,000 per month, which explains why one-third of Canadians say they can’t afford their monthly expenses. Finding #3: Canadians believe they need a big nest egg to retire. On average, respondents said they’d need $1.3 million in savings to feel comfortable in retirement. That’s a lot. But what you think you need may not be what you actually need, depending on your target lifestyle; in the not-distant past, Canadians indicated that they ideally wanted $1.7 million to retire. Our humble suggestion? Don’t guess. Use a retirement calculator (which you can easily find online) to start figuring out how much that lifestyle will really cost. Finding #4: Most folks aren’t very close to getting there. As we’ve seen, many Canadians are convinced they need substantial savings in order to retire. But knowing that and socking away money are different things. More than half of the people surveyed across age groups did not yet have $25,000 saved for retirement. (So if that’s you, you’re not alone! More on what you can do about it below.) Even among Canadians 55 and older, only 16% said they had more than $500K put away. Which surely has something to do with the affordability crisis. Finding #5: Saving is hard, but most people are being smart about it. More than 80% of Canadians polled have a Tax-Free Savings Account, and 62% have a Registered Retirement Savings Plan. This is an important first step; because of the tax benefits these accounts provide, contributing to one or both of them is the best way for many people to save. THE UPSHOT: Don’t give up! That’s the main takeaway here. Yes, you might not be in the perfect spot, but neither are a lot of other Canadians. The worst thing you can do is throw up your hands and not begin saving and investing today — because it gets so, so, so much harder the longer you wait. And if money is tight, just do the best you can. An investment of $100 a month could grow to almost $51,000 over 20 years, with $26,700 of that being interest (that’s assuming a 7% annual return). The only way to eat an elephant, as they say, is one bite at a time. And a bite of elephant goes down a lot smoother with low-cost index funds growing in tax-advantaged accounts. Revisit these two guides (scroll to the bottom) if you need more direction: A Simple(ish) Five-Point Money Plan for Young(ish) Canadians A Simple(ish) Five-Point Money Plan for Mid-Career Canadians OTHER VERY GOOD READS 👪 Why Gen Z Will Never Leave Home Soaring housing costs in Canada mean no empty nests. | Maclean’s 🔍 A Crypto Crime Fighter’s Arrest in Nigeria He pioneered crypto investigations. Then he got caught up in one. | Wired 🥇 This Is Why People Are So in Love With Gold An interview with a Diamond District gold seller. | Odd Lots THE WISDOM OF SOCIAL We even made “BFF” bracelets and let America braid our hair. 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 Maximum margin rate shown is as of February 17, 2025, based on the rates from Canada’s five largest banks with similar asset requirements. Margin rates from these banks range from 6.45%-7.00% for CAD loans of $100,000 or less, depending on assets with the financial institution. Actual rate may vary. 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