I’m not ignoring all this. However I’m doing what I all the time do: staying disciplined, doing my analysis, specializing in discovering worth, all whereas understanding there might be market swings and a must adapt the portfolio, as wanted. It’s not attractive, but it surely works. It’s a basis to construct a robust portfolio capable of face up to market challenges.
Let’s take a fast look again at 2024 and see the way it’s positioned Canadian buyers for 2025.
In some ways, 2024 was similar to 2023. Know-how shares, fuelled by the unreal intelligence (AI) bandwagon, led the markets. Huge cap tech (i.e., the Magnificent 7: Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla) had been the market leaders.
Nonetheless, issues modified in September, when the U.S. Federal Reserve lowered rates of interest by 50 foundation factors—its first fee minimize in 4 years. That set the stage for extra sectors to participate out there rally. Decrease rates of interest and robust financial knowledge created an setting the place buyers might, and did, do nicely.
Due to a easy U.S. presidential election—and by that I imply the outcomes arrived shortly, had been clear and had been uncontested—the market soared even greater. With one month left in 2024, the U.S. economic system is doing extraordinarily nicely.
From a market perspective, we’re leaving 2024 as we entered it—on a excessive.
What’s forward for the markets in 2025
Traditionally, November, December and January are the very best months of the 12 months to take a position. There’s an previous saying in investing: “As goes January, so goes the 12 months.”
And, I feel the adage will maintain true for 2025. I’m not anticipating one other 12 months of 20%-plus positive factors in 2025, however I see extra conventional returns of about 10%.
