Dear Clients and Friends,
We hope you and your families had a wonderful holiday season. On our side the holidays were a mix of hectic fun and quiet recovery. Simon was skiing with his kids in Mont Tremblant for part of the holiday while Michael took a trip up to Québec City with the family for part of the holiday. One of us (guess who) started a new ritual: morning workout, sauna, then cutting a hole in the lake ice for a quick dip. Sounds crazy, but it wakes you up like nothing else and leaves you feeling ready for anything. Maybe we should prescribe ice baths the next time the market gets shaky or as political tensions heat up—cools the nerves right down.
A Few Housekeeping Items
2025: A Year in Review
| 2025 MARKETS (as of 12/31/2025) | 2025 | 3 yr | 5 yr | 10 yr |
| S&P 500 TOTAL RETURN (USD) | 17.9% | 23.0% | 14.4% | 14.8% |
| DOW JONES INDUSTRIAL AVERAGE TOTAL RETURN (USD) | 14.9% | 15.4% | 11.6% | 13.1% |
| TSX 60 TOTAL RETURN (CAD)~CANADA | 29.1% | 20.5% | 16.0% | 12.8% |
| MSCI EAFE NET RETURN (USD)~EUROPE | 31.2% | 17.2% | 8.9% | 8.2% |
| MSCI WORLD NET RETURN (USD) | 21.1% | 21.2% | 12.2% | 12.2% |
| S&P CANADA ALL BOND INDEX TOTAL RETURN (CAD) | 2.5% | 4.3% | -0.2% | 1.9% |
| INVESTMENT PORTFOLIOS | 2025 | 3 yr | 5 yr | SI | Inception |
| CONSERVATIVE EQUITY TOTAL GROSS RETURN (CAD) | 17.5% | 28.2% | 14.3% | 15.3% | Oct 15′ |
| DIVERSIFIED INCOME TOTAL GROSS RETURN (CAD) | 13.2% | 15.6% | 10.4% | 11.0% | July 17′ |
| FOCUSED TOTAL RETURN TOTAL GROSS RETURN (CAD) | 19.1% | 34.7% | 17.8% | 22.8% | April 20′ |
| CANADIAN DIVIDEND PORTFOLIO (CAD) | 18.7% | NA | NA | 16.2% | April 23′ |
| CORE BOND PORTFOLIO (CAD) | 3.5% | NA | NA | 4.4% | June 23′ |
| *Your own returns will vary depending on the amount of fixed income you hold, cash flows in and out, and management fees. |
| LARGEST MUTUAL FUND IN CANADA | YTD | 3 yr | 5 yr | 10 yr |
| RBC SELECT BALANCED PORTFOLIO (A) NET RETURN (CAD) | 11.6% | 11.9% | 6.2% | 6.4% |
| 2025 | ||
| BIGGEST WINNERS | ||
| 2025 Return | Contribution | Company |
| 68.8% | 2.5% | ADVANCED MICRO DEVICES |
| 57.3% | 2.4% | ALPHABET |
| 48.3% | 0.7% | GOLDMAN SACHS |
| 47.9% | 0.4% | ASML HOLDINGS |
| 38.3% | 1.3% | ROYAL BANK |
| BIGGEST LOSERS | ||
| 2025 Return | Contribution | Company |
| -14.2% | -0.2% | ORACLE |
| -13.5% | -0.2% | HOME DEPOT |
| -9.9% | -0.2% | COSTCO |
| -4.8% | -3.5% | USD/CAD |
| -4.7% | -0.2% | CANADIAN NATIONAL RAILWAY |
| 2024 | ||
| BIGGEST WINNERS | ||
| 2024 Return | Contribution | Company |
| 195.8% | 12.7% | NVIDIA CORP |
| 77.3% | 9.0% | TESLA INC |
| 57.5% | 4.7% | AMAZON COM INC |
| 56.1% | 2.9% | BROOKFIELD CORP |
| 42.2% | 2.3% | APPLE INC |
| BIGGEST LOSERS | ||
| 2024 Return | Contribution | Company |
| -22.7% | -0.3% | NORTHLAND POWER INC |
| -17.7% | -0.2% | ASML HOLDINGS |
| -14.3% | -0.2% | NUTRIEN INC |
| -11.2% | -0.2% | CANADIAN NATIONAL RAILWAY |
| -10.6% | -0.5% | ADVANCED MICRO DEVICES |
| 2025 WORST TRADE OF THE YEAR | ||||
| Date | Name | Change | ||
| 5/12/2025 | LVMH Moet Hennessy Louis Vuitton | BUY | 25% | |
| 5/12/2025 | Alphabet Inc. Class C | SELL | 102% | |
| NET RESULT | -77% | |||
| CONTRIBUTION | -1.02% |
| 2025 BEST TRADE OF THE YEAR | ||||
| Date | Name | Change | ||
| 3/21/2025 | JPMorgan Chase & Co. | BUY | 36% | |
| 3/21/2025 | UnitedHealth Group Incorporated | SELL | -33% | |
| NET RESULT | 73% | |||
| CONTRIBUTION | 1.46% |
| Date | Name | Change | ||
| 11/26/2025 | Micron Technology, Inc. | BUY | 48% | |
| 11/26/2025 | Apple Inc. | SELL | -6% | |
| NET RESULT | 54% | |||
| CONTRIBUTION | 0.68% |
Lessons from the Trade Ledger
We don’t trade often, but we try to be smart when we do. Sometimes we get it right, and sometimes we learn a lesson.
- The “Winning” Mistake: Our worst trade was trimming Google to buy LVMH. We made 25% on LVMH, but Google went up 100% in that same window. It’s a reminder that sometimes the best thing to do is nothing at all.
- Timely Swap: We sold United Health before a significant crash and moved into JP Morgan, netting a 73% relative gain on that move.
- Tax Loss Efficiency: In December, we sold Oracle at $224 to capture a tax loss, waited 30 days, and bought it back at $194. We ended up with 10% more shares for the exact same amount of capital.
Scorecard: How Our 2025 Predictions Fared
Last year, we made some guesses about the future. We’d give ourselves a “B+” grade.
- The greatest re-organization of government and shift in the public sector in 50 years will begin in the U.S. and follow through to Canada and the U.K. before the end of the year.
Yes, we have seen major changes happening.
- There will be a record level of strikes and service disruptions as public employees and unions try to push back against reduced spending and increased automation.
Yes, there have been service disruptions across many areas, Canada Post being a recent one.
- Discussions will move from inflation to deflation as people question the spending decreases, tighter consumer spending, and efficiency gains in the economy.
No, discussions did not move to deflation; we may be early.
- The U.S. will not impose a 25% tariff on all goods coming in from Canada.
We got this one sort of wrong since most of our goods are not tariffed under CUSMA.
- Relations between China and the U.S. will normalize for the positive and reach a more balanced state while globalization continues to reverse.
Yes, relations have stabilized.
- The Canadian economy will continue to worsen at a slow pace. Policy will be grid-locked with the Liberals holding power as long as possible, we will likely not see a change from a Liberal federal government until July to November.
Very wrong, we are still under a Liberal government.
- The Canadian economy will officially enter recession.
No, while the second quarter was negative the third and fourth quarters improved.
- Rates in Canada will fall another 1-1.5%; prediction: overnight rate below 2% by this time next year.
Yes, we were very close, overnight rate went down -1% on the low end of our estimate and is currently at 2.25%.
- The Canadian dollar will remain weak throughout the first half of the year but will begin to strengthen as a future reversal in tax and trade policies becomes more evident.
Yes, this is exactly what happened as the Canadian dollar rallied back in the back end of the year.
- The biggest surprises of 2025 will be autonomous driving and robotics—both AI driven.
We seem to have been early; while major advancements were made, 2026 is looking more likely.
- Demand for energy will increase dramatically.
Yes, very true and was a major theme of investments in 2025.
- S&P 500 7,200 end of 2025; 15,000 – 2030
We were very close with the S&P going from 5,881 and ending at 6,845.
Looking Ahead: Our 2026 Predictions
The “crystal ball” is out of its locked container for its annual appearance. Here is what we see for the coming year:
The Big Picture
Technology & Energy
As the deep freeze of January settles in we hope you are managing to stay warm. We are excited for the year ahead and look forward to navigating the 2026 markets, tackling whatever opportunities arise with a steady hand. Thank you for your continued trust; we wish you a prosperous, healthy, and Happy New Year.
Sincerely,
The Hale Investment Group