Gold and silver prices retreated sharply after a record-breaking run, while equity markets finished mixed, highlighting renewed market volatility. With rising inflation, softening global growth and central banks facing tough policy choices, investors are looking for stability in defensive assets.
BNN Bloomberg spoke with Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel, who says investors should consider rebalancing portfolios, adding dividend-paying defensive stocks and using structured or hedged products to manage risk in an uncertain environment.
Key Takeaways
- Gold’s pullback is seen as a healthy correction and potential buying opportunity for underweight investors.
- The market remains overextended after strong momentum, and rebalancing is key before volatility returns.
- Defensive sectors such as telecommunications, utilities and infrastructure offer attractive dividend yields.
- Global cracks are emerging, from U.S. regional bank stress to European debt risks and Canada’s stagnating growth.
- Investors should consider hedged or structured products to protect gains and manage portfolio risk.
Read the full transcript below:
MERELLA: Gold retreated from its recent record surge, with silver also plunging today. Equities ended the day mixed. Our next guest has investment ideas to hedge against key risks and likes defensive stocks right now. Let’s bring in Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel. Martin, happy birthday!
MARTIN: Oh, thank you.
MERELLA: Congratulations. Gold plunged today but is still above the US$4,000 mark. Is this a buying opportunity for you?
MARTIN: I really think so. Gold just had its largest drop since April 2013, and silver fell about eight per cent. If you still believe in the debasement trade, which I do, and consider the Federal Reserve’s activity and the risks coming out of the White House, then this pullback is the opportunity we’ve been waiting for. There’s also a bit of seasonal weakness around Diwali, when demand temporarily dips as those markets close for the holiday. Gold was overbought, and now we’re seeing a healthy correction. For investors who are underweight, this is a good time to add some gold and silver to portfolios.
MERELLA: How much of this do you think is due to being overbought versus other factors?
MARTIN: It’s probably got more downside in the short term. The momentum over the past few months was so strong that we need to flush out some speculation. Some investors had leveraged up into the sector, and we need to shake that out. Once that happens, I think we’ll reset and continue to push higher — as long as the Fed and the White House continue with current fiscal and monetary policies.
MERELLA: Earnings have been strong so far, and tech earnings are expected to show strength. Do you think investors should book profits now or hold on for higher returns?
MARTIN: I saw something interesting on X today — it said one of the major cheat codes in life is learning how to master the graceful exit. It’s about knowing when to step back with no drama, just discipline. Markets may still be partying with strong corporate earnings and record highs, but now could be a good time to rebalance. I call it taking a graceful exit from certain exposures — not abandoning the ship or going to cash, but rebalancing, protecting gains and positioning for what’s historically been a weaker seasonal period. When the music does stop, those vaccinated with discipline will be well prepared to re-enter with strength.
MERELLA: Yeah, sometimes the music still goes on in my head — and that’s part of the problem, the music hasn’t stopped. Inflation jumped in September to 2.4 per cent, higher than expected. How do you think that affects the Bank of Canada’s next move?
MARTIN: They’re in a tough spot. You have stagnation and inflation, an economy that isn’t growing, political gridlock and job losses under U.S. tariff pressures. What does the Bank of Canada do? I still think they’ll have to cut rates to stimulate the economy, but that’s difficult when inflation is resurging. I don’t envy their position.
MERELLA: Let’s talk about some of the defensive stocks you like — telecommunications and utilities, including Telus and Fortis.
MARTIN: Yeah, they may be boring, but sometimes boring is exciting. When you leave the big party, you go home to boring — to dividends and liquidity that will be there the next morning. Telus has a dividend yield of more than seven per cent, Fortis around three and a half to four per cent. I also like Canadian Utilities at roughly four and a half per cent and Brookfield Infrastructure at about 4.3 per cent. You’re getting solid dividends and maybe two or three per cent growth on top of that. That gets us to our eight to 10 per cent target return, and with two-thirds of that coming from dividends, it’s easier to hit those targets without needing the party to keep roaring.
MERELLA: You mentioned FOMO earlier — investors worried about missing out on fast-growing tech and AI stocks. How do you convince them to take a more balanced approach?
MARTIN: If you already have exposure to those segments, as many of our clients do, it’s easier to say, “Let’s rebalance,” maybe take some profits or add some put protection. If you’ve been sitting in cash, it’s tougher — and probably not the right time to capitulate and jump into the market. We’re starting to see some cracks: U.S. regional banks under pressure, private credit markets wobbling, and gold moving higher. On the macro side, we’ve got sovereign debt risk in France, tax policy driving millionaires out of the U.K., German industrial output falling, and Canada’s economy stagnating. If you’ve missed out, trying to chase those high-performing tech names now is risky.
MERELLA: Are you continuing to add to ETFs right now?
MARTIN: Yes, we are. For investors who don’t want to own individual stocks, there are ETFs like the Global X “Ring” ETF, which covers all three major telecom companies, and XUT, which includes Canadian Utilities, Fortis and Brookfield. Those ETFs are great for gaining diversified exposure to defensive sectors.
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This BNN Bloomberg summary and transcript of the Oct. 21, 2025 interview with Martin Pelletier are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
