I am not ignoring all this. But I do what I always do: stay focused, do my research, focus on finding value, always knowing that there will be market fluctuations and the need to adjust the portfolio, as needed. It’s not sexy, but it works. It is the basis of building a strong portfolio that can withstand the challenges of the market.
Let’s take a quick look back to 2024 and see how it is positioned for Canadian investors in 2025.
In many ways, 2024 was very similar to 2023. Technology stocks, boosted by the artificial intelligence (AI) bandwagon, are leading the markets. Big cap tech (ie, the Magnificent 7: Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla) were the market leaders.
However, things changed in September, when the US Federal Reserve cut interest rates by 50 basis points—its first rate cut in four years. That set the stage for many sectors to participate in the market rally. Low interest rates and strong economic data create an environment where investors can, and do, do well.
Thanks to a smooth US presidential election—and by that I mean the results were quick, clear and undisputed—the market soared. With one month left in 2024, the US economy is doing very well.
From a market perspective, we leave 2024 as we entered it—we are ahead.
What is coming for the markets in 2025
Historically, November, December and January are the best months of the year to invest. There’s an old investment saying: “As January goes, so goes the year.”
Also, I think the saying will be true in 2025. I don’t expect another year of 20%-plus returns in 2025, but I do see an additional traditional return of around 10%.
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