Welcome to August 2025

Welcome to August! Lots going on this summer in the economy and at Drake Financial Ltd. The financial markets continue to hang around record highs. There is a lot of pent-up optimism in the marketplace. The question remains whether it is misplaced or not. Both the US and Canadian economies have been quite resilient so far, given the turbulent times with the tariff threats and negotiations shaking the world economies.

Economic Trends

The evidence of the economic resilience in Canada is the metrics coming from the economy showing a pretty flat and slightly improving national real estate market and a positive GDP. The trade deficit is surprisingly a little lower. In a smaller way, this reminds me of 2009 to 2010 when the storm of the Great Recession passed and left stagnation in its wake, and then a few green shoots began to grow. I think that is where we are now. We started the year strong and then hit the skids with the US tariffs and the uncertainty it created. We seem to be now at the start of the new normal. But there is still a lot of settling in to come, with some industries failing and others (many new ones) thriving. Canadians are optimistic and will continue to innovate and succeed. The one headwind is debt, and if you want to look deeper into it, read the article in my blog from the Financial Post.

Here at Drake, we are hard at work researching new investments to bring you the best yielding opportunities while preserving your capital. In the next month, we will be announcing many new issuers and investments. But it’s still summer, so here is what we have been up to.

Peter and I attended the 2025 Real Estate Industry Classic Golf Tournament at the Westwood Plateau, and thanks to Peter anchoring our team, we ended up winning the tournament. In our group was Peter Pasula, Guyle Clark of the law firm Clark Woods, Matt Cook, former Vancouver Canucks hockey player, and myself.

Here is the group photo:

We had an unexpected visitor on the tee box above. Black bears are part of the hazards at Westwood Plateau Golf Course. But we persevered to win at -17!

Have any of you met Niki Soor, our Chief Compliance Officer? If you have not met Niki, you need to stop in one Friday afternoon after lunch and have a coffee with her. She has the rare ability to be working and giving you her full attention at the same time. We will be hosting a Chamber of Commerce event August 20th and will let you know next month how much fun it was. Reservations are full, and guests will enjoy live professional music and targeted wine tasting!

Monthly Quiz

We will see how good you are at summer sports trivia this month. There are 10 questions, and I only got 6—so let me know if you do better!

QUIZ: QUIZ: A salute to summer sports - The Abbotsford News

Financial Literacy

Emergency Fund

What is an Emergency Fund?
An emergency fund is spare cash that is used during personal financial distress. Events such as the loss of a job, an illness, or a recession are examples of when many individuals would need to use their emergency fund to continue to survive. Thus, the primary purpose of the fund is to meet emergency expenses during unforeseen circumstances. By doing so, it reduces the need to borrow debt at high interest rates or to utilize one’s retirement funds.

How much should my emergency fund be?
According to many financial advisors, an emergency fund should be able to cover approximately 3–6 months of total expenses. Have you ever noticed how good a bargain you can negotiate when you don’t want the product so much? The same psychological forces work in your favor when you have surplus cash in your account.

What are the benefits of an emergency fund?

1. Reduces stress levels
   In light of an emergency, such as a sudden job loss, car troubles, or unexpected home repairs, such incidences indeed threaten one’s financial wellness, which ultimately induces stress.

   Without any sort of cushion to combat potential events, individuals are accumulating significant risks that can be detrimental to their day-to-day lives. However, by building an emergency fund, it gives individuals confidence and the ability to overcome such unexpected events without being financially concerned.

2. Encourages saving behavior
   By building an emergency fund, it motivates individuals to save and reduce the temptation of spending their money on frivolous goods, such as luxuries ranging from televisions to video game consoles.

3. Avoids bad debt
   With an emergency fund, individuals would not need to even consider using bad debt—such as high-interest credit cards—to fund their needs. Due to irresponsible behavior, using this sort of debt can lead to higher payments caused by additional interest, fees, and overall higher penalties.

Monthly Advice

Summer is a time to spend with your family, relax, and enjoy the beautiful weather. While I write this, I am at my sister and brother-in-law’s in the Cariboo watching deer jump their tall fence protecting their new berry plants. It was entertaining watching to see how the buck would get out…was there any doubt he could jump 7 feet? Our Canadian economy is like that. It surprises to the upside.

Now is the time to reallocate your investment portfolio from fear (GIC and MIC only) to neutral. Neutral or moderate means different things to different people based on their risk tolerance, timeline, size of portfolio, and investment experience. If you want to rebalance your investment portfolio without investment recommendations, call the office for an appointment and Peter or I can fit you in.

Sources:

GDP : Gross domestic product (GDP) at basic prices, by industry, monthly, growth rates

 Housing Starts: Monthly Housing Starts and Other Construction Data Tables | CMHC

 Inflation: Canada Inflation Rate

 Trade Deficit: Canada Balance of Trade

 Real Estate Sales Volume: August 15 2025 News Release | CREA Statistics

 Real Estate Values: August 15 2025 News Release | CREA Statistics

 Investors should pay attention to Japan’s bond market red flags | Financial Post