I am not ignoring all this. But I am doing what I always do: staying disciplined, doing my research, focusing on finding value, all while knowing there will be market swings and a need to adapt the portfolio, as needed. It’s not sexy, but it works. It’s a foundation to build a strong portfolio able to withstand market challenges.
Let’s take a quick look back at 2024 and see how it’s positioned Canadian investors for 2025.
In many ways, 2024 was very similar to 2023. Technology stocks, fuelled by the artificial intelligence (AI) bandwagon, led the markets. Big cap tech (i.e., the Magnificent 7: Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla) were the market leaders.
However, things changed in September, when the U.S. Federal Reserve lowered interest rates by 50 basis points—its first rate cut in four years. That set the stage for more sectors to take part in the market rally. Lower interest rates and strong economic data created an environment where investors could, and did, do well.
Thanks to a smooth U.S. presidential election—and by that I mean the results arrived quickly, were clear and were uncontested—the market soared even higher. With one month left in 2024, the U.S. economy is doing extremely well.
From a market perspective, we are leaving 2024 as we entered it—on a high.
What’s ahead for the markets in 2025
Historically, November, December and January are the best months of the year to invest. There’s an old saying in investing: “As goes January, so goes the year.”
And, I think the adage will hold true for 2025. I’m not expecting another year of 20%-plus gains in 2025, but I see more traditional returns of about 10%.
