Market volatility is ever-present, however its magnitude varies relying on the prevailing headwinds. Uncertainty reigns in 2025 primarily as a result of commerce tensions and geopolitical dangers. Economists count on slower financial progress within the second half of the 12 months, though home demand lends assist for financial exercise in Canada.
On the funding entrance, the Toronto Inventory Alternate continues to shock traders. The index surged 10.2%-plus within the final three months, elevating the year-to-date acquire to 17.5%-plus. It additionally recorded a number of file highs within the first week of September alone. Nevertheless, you possibly can’t rule out setbacks or a market pullback in a difficult atmosphere.
Managing short-term volatility
The answer to mitigate short-term volatility is to take a position for the long run. Shopping for and holding shares for longer durations can assist trip out market downswings. This funding technique allows you to generate extra earnings by way of compounding progress.
If I’m investing for long-term wealth creation and to obtain pension-like passive revenue, there are solely two Canadian shares to carry without end. My high picks belong to the highest two heavyweight sectors, financials and power.
Dividend pioneer
The Financial institution of Montreal (TSX:BMO), TSX’s dividend pioneer, is a no brainer selection. This $125.6 billion lender, which is 208 years previous, has been a dividend payer since 1829. The dividend monitor file is 4 years shy of 200 years or two centuries. At $175.30 per share, the dividend yield is 3.7%.
BMO’s robust earnings progress in Q3 fiscal 2025 is mirrored within the inventory’s 29.9%-plus year-to-date acquire. Within the three quarters ending July 31, 2025, internet revenue climbed 25% to $2.3 billion in comparison with $1.9 billion in Q3 fiscal 2024. Notably, the availability for credit score losses (PCL) declined 12% year-over-year to $797 million as a result of improved credit score high quality.
The Massive Financial institution’s CEO, Darryl White, describes the U.S. Business and Wholesale lending companies as an influence alley. The web revenue of the U.S. enterprise elevated 51% to $709 million from a 12 months in the past. BMO acquired the Financial institution of the West in 2023 and is now totally built-in with Canada’s oldest lender.
Power big
Enbridge (TSX:ENB) wants no justification given its management place in North America’s oil and fuel midstream trade. BMO holds the longest dividend monitor file in Canada, whereas ENB boasts a 30-year dividend progress streak. In case you make investments right now ($66.98 per share), you possibly can partake within the hefty 5.6% dividend. Present traders additionally get pleasure from a 14.7%-plus year-to-date return.
The $145.6 billion power big owns and operates pipelines all through Canada and the US. Its low-risk, utility-like enterprise mannequin ensures stability and era of predictable money flows. In response to administration, the expansion alternatives for the 4 core franchises mixed by way of 2030 are value $30 billion. The secured backlog for execution is $29 billion.
Within the first half of 2025, earnings elevated 35% year-over-year to $4.8 billion. The web money offered by working actions reached $6.3 billion, representing a 5.5% leap in comparison with the identical interval in 2024. Its President and CEO, Greg Ebel, mentioned Enbridge is in an ideal place to serve the rising power demand and capitalize on the rising energy demand in North America.
Purchase and by no means promote
You may set your self up for wonderful, wholesome long-term returns by combining BMO and Enbridge in your funding portfolio. Purchase the shares right now and make sure to maintain them for the long run.
