January 2026

The year has already started out with lots of worthy news items, so we thought we would share our thoughts on 2025 and expectations for 2026. The RBC Wealth Management Global Insight Weekly has a good review of how the US equity market did in 2025. Note for most accounts, we held 4 of the 7 most impactful stocks on the S&P 500 last year (see diagram on page 2). For 2026, RBC’s view around investment return expectations is aligned with ours…."We think a ‘positive’ rather than ‘above-average’ year is the outcome to plan for”. We believe continued improvement in market breadth and a positive economic environment in the US are tailwinds for equity markets.

We are determined to continue to manage any market volatility we expect this year in a prudent fashion and ensure there is a strong connection to your individual investment plan. As always, we would be pleased to discuss this in more detail personally.

November 2025

Hard to believe it’s November already and the holiday season will be upon us soon. As we approach the home stretch for 2025 in what has been a better year for equities than many expected at the April “liberation lows”, we wanted to share our thoughts on where we go from here.

Attached we include a Technical (using trends in market data to identify opportunities) report, Trend & Cycle: The Long View – November 2025. While some of you will like the detail and the charts included in this report, many of you are more interested in the bottom line. So with that in mind, the long term is still supportive of markets, however there are some reason for caution in the short term (you may recall that we have been counselling some caution in our past notes). This section from page 2 summarizes the current situation very well, in our minds.

The bottom line is that while historically high valuations and market concentration remain an understandable concern for fundamentally focused investors, we believe the current technical backdrop remains supportive of staying invested in equities with the caveat that a pause or pullback would not be surprising before year-end. Our recommendation continues to be for investors to use recent strength in equities to rebalance portfolios to maintain diversified equity exposure and to be cautious chasing the well-advanced leading stocks in fear of missing out.

This statement mirrors our positioning and strategy. Specifically, we have done the following in 2025:

• Reduced equity positioning slightly
• Maintained a balance of leading growth stocks with more defensive and dividend oriented stocks
• While we typically re-balance holdings annually, we decided to do a mid-year trimming of some stocks which had really moved up strongly

As always, please let us know if you would like to discuss anything in this report.

September 2025

We hope everyone had a wonderful summer! With Fall fast approaching, we wanted to reach out and provide some thoughts on the markets and our strategic investment positioning. RBC’s US Recession Scorecard has been updated and is essentially unchanged from the last time we shared this with you. These findings give us confidence that maintaining our cautious approach is the best strategy for now. Despite this report being “inconclusive”, there are reasons to be more hopeful. In particular, the Central Banks in the US and Canada are now contemplating interest rate cuts this Fall, which should be supportive of Equity markets.

Should you have any questions about this report or our investment strategy, please reach out as we would welcome an opportunity to connect with you.

June 2025

Summer is fast approaching and we wanted to provide a couple of updates for you.

Firstly, Danielle is heading away with her family for a couple of weeks to Europe at the beginning of July (July 1st to 20th inclusive). This will be her first time away from the office for longer than a week in the past 10 years and it’s Kate’s first trip to Europe. Needless to say – we are all excited to explore the sites. First stop is to visit Harry Potter at the Warner Brothers Studio in London before heading to Legoland in Denmark and finally some hiking and exploring in Norway. In Danielle's absence, please contact Anita at anita.shin@rbc.com or by phone 604-257-3200. You may also contact Alison at alison.baker@rbc.com or 604-717-2127.

Secondly, the positioning of our investments under care became slightly more defensive earlier in the year. Obviously, tariff discussions have been considered but there is also a mix of other factors that have influenced us. While not all the news has been negative, the uncertainty of economic outcomes has risen this year, in our estimation. Thus we believe a little more caution remains warranted for now. Included is the Global Insight Weekly, which features the updated U.S. Recession Scorecard. While there has been some improvement this month, it is still a mixed message. The graph on page 2 allows for a quick look at Global Portfolio Advisory Committee’s thoughts. We would like to point out that the Yield Curve indicator is pointing towards expansionary economic conditions by most measures. While the Committee has kept the Yield Curve in the red for now to be prudent, it is important to emphasize that we are seeing some improvement there.

May 2025

The included Global Insight Weekly has a really good article on the current challenge of the Federal Reserve (FED). Usually when there are concerns about the economy the Fed acts like the calvary and comes to the rescue. However, the Fed is somewhat boxed in by inflation concerns. This is why we have raised the amount of dry powder (cash) in client accounts and, where mandates allow, continued to overweight Alternative strategies, which can provide steady returns regardless of market directions. In our view, a more balanced investment strategy is prudent until we get more certainty on tariffs and the impact on the economy.

April 2025

So called “Liberation Day” did not feel that liberating, as stock markets responded negatively around the world. For over a month now we have increasingly viewed our positive expectations for markets to be in jeopardy. While we expected heightened volatility, Trump 2.0 seems more determined to play a longer game in his efforts to change US trade relations, regardless of who this impacts in the US and elsewhere. With this in mind, we have been incrementally increasing the defense in our client portfolios. Attached is the latest RBC Global Insight Weekly, which has some analysis and thoughts on the latest tariff announcements. As always, please reach out if you would like to discuss.

February 2025

Many investors are feeling nervous due to the ongoing headlines regarding US tariffs. In our last note, we referenced that we expected increased market volatility but remained constructive on the year ahead of us. The Global Insight Weekly attached herein goes a long way to explaining our comfort with our current investment positioning. The opening paragraph provides a good summary of our thinking: “What matters more for the market, Washington policy or plain vanilla corporate profit trends? While Washington, D.C. will likely capture a lot more business press headlines this year and policy developments could generate volatility, we think good old fashioned earnings trends will determine the U.S. equity market’s fate over the mid and long term. We look at the ongoing Q4 earnings season and the earnings outlook for the year.”

Rest assured that we will continue to monitor the situation and will make adjustments if needed.

January 2025

Welcome to 2025! There is a lot of noise out there right now and divisiveness around politics continues. Despite all of that, the portfolios we manage are off to a good start and we wanted to share our thoughts for 2025.

We remain bullish and are not amending our asset allocation at this time. There are certainly things to be concerned about but as we know “the stock market climbs a wall of worry”. We have many Fundamental Analysts, including some that are exclusive to our firm, to help us with our investment decisions. We also use Technical Analysis as part of our process. We have discussed the slower recovery that we expected after the challenging market of 2022 and this did in fact come to pass. Now the question is: where do we go from here? Technical Analysis can help put where we are now into perspective and provide insights for the year to come. Accordingly, we have attached the “Trend & Cycle: The Long View” from Robert Sluymer, Technical Strategist of our Portfolio Advisory Group. The document is 27 pages so we wanted to highlight a couple of things that we think are important.

The chart on page 5 shows that the market moves in long term bull and bear markets. We are currently in a secular bull market that could last into the next decade. Obviously, within these bull markets we can have significant corrections like we saw in 2020. The chart on page 6 shows that these corrections or cycle lows typically occur every 3-4 years. Therefore, based on this analysis, we remain positive on equity markets because we are in a secular bull market and still in the early stages of the shorter 4 year cycle. To us, this helps us remain confident in our positioning despite some high valuations among a few stocks. Valuation levels impact our stock selection but not necessarily our overall asset allocation decisions. The same goes for potential tariffs. It is influencing our stock selection and industry allocations, but not our view that markets will remain positive this year.

We trust you will find this helpful and please reach out if you would like to discuss.

December 2024

As we come to the close of another year we look back at our multi-year forecast of a “U” shaped recovery (slower recovery) and see that this is what has in fact transpired. Based on this forecast we have positioned portfolios for something different each year: 2022 - time for protection; 2023 - time for patience, 2024 - time for rewards. Indeed, as we look at our portfolio returns, we are pleased with the strong performance we are seeing this year. Our prudent investment style is to protect on the downside and be aware of the pattern of returns we deliver as this can be more important than total return; especially when drawing from the portfolio. We read an article this year that we could relate to, as it spoke to the benefits of protecting capital and not chasing returns. Our clients have seen us protect investments in times of market turmoil and this article does a good job of explaining why this is important. The below table from the article in particular quantifies the importance of managing volatility and the numbers may surprise some people.

Future notes to you will focus more on our thoughts for 2025, but in the meantime, enjoy this article and we look forward to connecting soon.

Wishing you health in happiness.

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