Andex Chart
The 2026 Big Picture: Key Insights
Long-Term Growth of Asset Classes
- U.S. stocks delivered the highest annualized returns (11.8%) since 1935, followed by Canadian stocks (9.9%) and international stocks (8.4%). Fixed income assets like bonds and T-Bills yielded lower returns (5.6% and 4.2% respectively).
- $1,000 invested in Canadian stocks in 1935 grew to $5 million by 2025; U.S. stocks reached over $24 million.
Volatility and Diversification
- Stocks offer high returns but also high volatility. International stocks are especially volatile due to currency swings.
- Diversified portfolios (Balanced, Growth, Income) help manage risk, with balanced portfolios showing moderate volatility and consistently positive returns over longer periods.
Impact of Inflation
- Inflation significantly erodes purchasing power over time. Equities have outpaced inflation, while T-Bills and GICs have barely kept ahead.
Market Cycles and Downturns
- Bear markets (20%+ declines) and recoveries are part of investing history. Canadian stocks saw 11 downturns since 1935; all were eventually followed by strong rebounds.
- The longer the holding period, the lower the likelihood of loss. For example, Canadian stocks produced positive returns 100% of the time over any 10-year period.
Historical Events and Market Timing
- Despite 15 recessions, wars, and crises, staying invested proved beneficial. Attempts to time the market often backfire.
- Notable events (wars, crises, policy changes) are marked, highlighting their impact on markets but also the resilience of long-term investment.
Currency Effects for Canadian Investors
- Foreign returns are affected by Canadian dollar fluctuations, which can amplify or reduce gains from U.S. and international holdings.
2026 The Big Picture Report
