Happy New Year!

 

I hope your 2026 is off to a good start

 

This time of year always offers a welcome pause; an opportunity to reflect on what’s passed and consider how those events have shaped the path forward.

 

2025 certainly gave us no shortage of talking points. Some developments felt monumental, others less so, but by the time December arrived, markets began to display something that felt surprisingly familiar: resilience.

 

The year opened with a new political regime taking office in the United States. Here at home, headlines were dominated by provocative rhetoric, including talk of Canada becoming the “51st state.” By April, markets were confronted with a far more tangible shock “Liberation Day” and the sudden reality of sweeping tariffs across much of the global economy. Almost overnight, the progress markets had made in moving past elevated inflation and higher interest rates appeared to unravel.

 

The second quarter brought more change. Canada elected a new Prime Minister, tasked with navigating an increasingly entrenched trade war. The most surprising development, however, came from abroad: Asia-Pacific nations responded to Liberation Day by flooding markets with long-dated U.S. Treasuries. This drove the U.S. dollar sharply lower and ultimately forced the U.S. government to pause its tariff agenda; a powerful reminder of the connections between global markets.

 

By the third quarter, markets began to demonstrate their underlying strength.

 

Economic momentum continued despite uncertainty, labour markets in both Canada and the U.S. cooled, and interest rate cuts moved forward. Concerns remained; particularly around a potential U.S. government shutdown layered on top of unresolved trade tensions but optimism quietly returned.

 

We also saw the artificial intelligence theme move beyond theory, as real-world adoption began to highlight its potential as a meaningful productivity driver.

 

The final quarter brought a sharper edge back to markets. Many of the year’s themes resurfaced, pushing inflation higher not due to weakening fundamentals, but because of renewed uncertainty around costs, supply chains, and retaliation risks. As expected, volatility returned. Still, November’s sell-offs proved contained. Rather than triggering panic, markets entered the year-end stretch with something they once knew well: vigilance, not fear.

 

As we move into the new year and headlines continue to sound alarm bells, I want to remind you that our focus remains unchanged. By investing in exceptionally well run businesses that have repeatedly proven their ability to adapt and endure we remain confident that these companies can continue to evolve and benefit over time, regardless of the shifting landscape.

 

Once again we never lose sight of the responsibility that comes with what you’ve entrusted to us. We are grateful for your confidence and wish you a happy, healthy New Year shared with those who matter most.

 

As always, thank you for placing your trust in our team. We’re here to discuss your portfolio and to answer any questions or concerns you may have

 

Phil