Canadian investors have seen sharp market swings over the course of 2025, with declines stemming from sweeping tariffs, rising geopolitical risks and global uncertainty. Stocks have tumbled as recently as Friday, October 11 — where a reported US$2 trillion in stock value was lost in a single day thanks to President Trump’s announcement of 100% tariffs on China.
While the market turbulence might cause some investors to pause or pull back, former Dragon’s Den star entrepreneur Kevin O’Leary says historically, volatility can mean opportunity — if you know how to approach it.
“Nobody likes volatility, but the market was extremely expensive,” O’Leary said in an interview with Yahoo! Finance on March 13. “I’ve lived through multiple corrections of up to 20%.”
The sharp pullback in stocks — particularly in the tech-heavy Nasdaq and small-cap Russell 2000 indices — caught O’Leary’s attention.
“I can’t catch the bottom, but I’ve seen great companies that still have great growth prospects selling down,” he said.
O’Leary believes this kind of downturn is exactly the moment when investors should be stepping in, even if the headlines are full of doom and gloom.
“Everybody feels, ‘Oh my goodness, it’s the end of the free world as we know it’ — this always happens,” he said. “As an investor you learn that you have to hold your nose, and when there’s blood in the streets you have to be buying. It’s an old adage, but it’s not incorrect.”
What O’Leary says he’s buying
So, what exactly has O’Leary been buying? Rather than picking individual stocks, O’Leary revealed he buys indices, favouring rule-based exchange-traded funds (ETFs) that provide broad exposure while following a disciplined strategy.
“I use ALPS [mutual funds] because I once had an ETF company that did this,” he shared. “I use their OUSA product for the S&P 500 and OUSM for the Russell 2000, and I bought more because it’s on sale.”
For investors north of the border, a similar strategy can apply to ETFs listed on the Toronto Stock Exchange (TSX). For example, the iShares Core S&P/TSX Capped Composite Index ETF (TSX:XIC) or the Vanguard FTSE Canada All Cap Index ETF (TSX:VCN) offer broad market exposure at low cost. If you’re looking for greater exposure in the U.S., funds like Vanguard S&P 500 Index ETF (TSX:VFV) are available in Canadian dollars.
While O’Leary is confident in the long-term benefits of buying during downturns, he cautions against trying to predict the exact bottom.
“You just have to look long term and realize these are buying opportunities, but never think you’re going to catch the bottom. I don’t even have to guess to do that, I don’t try to time the market,” he remarked.
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O’Leary’s strategy meets Buffett’s wisdom
O’Leary isn’t the only high-profile investor who champions index investing — Warren Buffet has long been a vocal advocate of the strategy for everyday investors.
Buffett has previously stated: “In my view, for most people, the best thing to do is own the S&P 500 index,” meaning shares in an index fund.
The legendary investor — who Forbes estimates is worth US$160-plus billion — believes everyday investors are better off putting their money into a broad-based, low-cost index fund that captures the long-term growth of the U.S. economy.
He believes so strongly in this strategy that he instructed 90% of his wife’s inheritance be invested in “a very low-cost S&P 500 index fund” after he dies.
The beauty of this approach is its accessibility — anyone, regardless of wealth, can take advantage of it.
While investing in an index fund is straightforward, some investors may want guidance on building a portfolio that aligns with their personal financial goals. That’s where a financial advisor can help.
For investors looking to build or rebalance portfolios, CIBC Investor’s Edge offers a comprehensive, low-cost platform for DIY investors. You can research individual stocks, ETFs and bonds, access analyst reports, and use educational tools to understand risk and performance — all in one place.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.