Bank of Canada Holds Rates Steady: What it Means for Your Portfolio

The Bank of Canada has kept its policy rate at 2.25%, but this decision does not necessarily mean investors should wait for another rate cut before investing in stocks.

CANADA'S economy is showing improving strength, despite the ongoing Canada-U.S. trade war and oil prices near US$95 a barrel amid Middle East conflict.

This scenario makes it difficult for the central bank to lower rates as quickly as some investors might like, according to Jitendra Parashar at The Motley Fool Canada.

Parashar suggests that instead of waiting for another rate cut, investors could consider two top Canadian stocks: Bank of Montreal (TSX:BMO) and RioCan Real Estate Investment Trust (TSX:REI.UN).

BMO has delivered impressive gains despite cooling recently, with its shares up 37% over the last year even as it has pulled back slightly over the last month.

The bank's adjusted net profit climbed 19% year-over-year to $2.9 billion in the third quarter of its fiscal year 2026 (ended in July), driven by strength across key businesses and continued investment in technology and artificial intelligence capabilities.

RioCan, on the other hand, offers a juicy 5.6% annualized distribution yield and has gained 11% so far this year, with its units trading at $20.73 per share and giving it a market cap of about $6 billion.