As we close the books on 2025, it’s tempting to look at the record highs in equities achieved this month, against all the headwinds, and call it a "Goldilocks" year. But if you’ve been following our commentaries over the past twelve months, you know that the view from 36,000 feet has been anything but smooth. This was the year that the "Higher for Longer" mantra finally broke, only to be replaced by a far more complex reality: a North American trade war and an AI-driven momentum that is starting to show its age.

Yet rather than spend time in our last newsletter of 2025 looking through the recent noise, I thought we would take a look back over the year. I’m also going to depart from our traditional holiday edition style and leave out the parodied rendition of a Christmas song and focus on something much more important – our staff and how things went for them this year. So, join me on a journey through the past four quarters. 

 

Q1 – Awaiting the new emperor

The opening weeks of the year were filled with anticipation as to what Trump was going to do post-inauguration. As the chart below shows, the TSX meandered for a couple of weeks in January but caught a small tailwind into mid-February. Nerves began to fray, however, towards the end of February and shed more than 5% before mid-March. What would turn out to be a head-fake rebound, stocks did improve enough to deliver a 0.8% lift for the first quarter.

 

 

 

While this was happening, Ally was doing her final prep work for the CFA (Chartered Financial Analyst) Level III exam in February. Her CFA journey started before the pandemic, so thankfully the only distractions were coming out of the Oval Office. Well, all the hard work paid off, and Ally passed the exam and became a Charter member in May. This is probably the highest distinction in the financial industry and of the small proportion of investment advisors that carry the designation, an even smaller fraction of female advisors has it. With this achievement, Ally has cemented her position among the best advisors not only in Peterborough and Ontario, but across Canada.

Some would have taken some time off after finishing Level III, but Ally instead put together a very well attended event in Peterborough, called Women and Wealth.

 

Q2 – Buckle up!

In the dictionary under April Fools Day, we can now add the experience in 2025 as an example. As investors started to get comfortable with the notion that the disruptor-in-chief would be more bark than bite (he still is), stocks were bid higher on the first day of the second quarter. The TSX closed with a 0.5% gain, to be followed by more than a one percent rally the following day. Maybe stocks could go back and retest the January highs after all. How about a complete reversal back to August 2024 instead? Trump’s announced tariff barrage after the markets closed on April 2^nd sent equities into a spiral, with the TSX losing more than 10% by April 7^th.

 

 

The large-cap tech segment of the US was hit even more, and investors were faced with the worst decline since 2022. At the time, individuals and businesses started to mark down their expectations for the economy and stocks, with some considering throwing in the towel. That would have been premature and costly, since the rebound in equities in response to Trump’s TACO antics ended up taking out the January highs by the middle of May, as seen in the chart above, the TSX closed out the second quarter at a new record high of 26,857.  Analysts, economists and investors were once again busy revising forecasts. But the quarter was also a busy one for staff.

 

In addition to devoting a ton of time to her boys’ football, including volunteering as the team manager for the Junior Argos, Tammy was also responsible for introducing Pyle Wealth Advisory to the Peterborough Wolverines football association. Over the years, we have aligned our charitable gifting and sponsorships with our clients’ interests, from PRHC and CMHA to the arts. Being able to support the young people in the community, like the Wolverines and the Ennismore girls’ hockey league, has brought an added smile to our faces. Tammy also helped coordinate our sponsorship of the annual Butterfly Run in support of families and individuals who have experienced the loss during pregnancy, the loss of a child or infertility.

 

Hayley had an exciting quarter as well. After buying her first home in Havelock, she put it up for sale and sold it, allowing her to move back to Peterborough. For those of you who know where Havelock, you will appreciate the distance from the City and how long it takes to drive there and back, even on a good day. In the winter, it can be a real mess. Hayley and I joked today about getting the car cleaned and acknowledging that it really is pointless! Today, she enjoys a much much shorter commute from her place in Peterborough to the office.

 

Q3 – Everyone likes rate cuts

If 2024 was the year when both the Bank of Canada (BoC) and Federal Reserve pivoted from restrictive policy to less restrictive, this past year has been more of a search for neutral. In the case of the BoC, the first quarter looked like the pace of rate cuts in 2024 might just continue, as it delivered two quarter-point moves. The brakes were tapped in Q2 and by end of September we saw only one, taking the overnight target to 2.5%. For the Fed, a Trump-annoying caution set in during the entire first half of this year, but on September 18^th we got the first cut of the year. While “only” a quarter of a point, it was enough to add fuel to an already hot equity market.

 

 

It was also becoming apparent that the wheels of the economy were still firmly bolted on, and businesses managed to dodge the tariff bullet of the second quarter and beat expectations on revenues and earnings. This was quite a miraculous feat as it also became clear that firms could be altruistic after all and eat a chunk of those tariffs such that the burden wasn’t passed along to consumers. Goldilocks seemed to be alive and well and stocks continued to advance with low volatility. Buy the end of September, the TSX had closed at not only a new record high but above another 10K milestone at 30,022 – seen in the above chart.

 

The summer of 2022 was also hot in terms of temperatures here at home and elsewhere around the world. After a rather miserable May, few could complain about the days and nights of the third quarter. This included our Michelle, who went to PEI for a family trip this past summer. This was where her father had come from and we were all so happy they could be together in one of Canada’s most beautiful spots to celebrate with family.

 

One of the bright spots of the year is our annual client appreciation event and this July we marked the 16^th get together. This annual event was born out of the realization that the seminars I used to hold in the early years would typically have an audience that was 90% clients and 10% interested observers. We made a decision then to jettison the seminar and make it all about the clients. Over the years, the event has changed and this year we held it at the beautiful venue, Westben. The Phantom of the Opera production and food by Ennismore’s Jesse’s went beyond all our expectations.

 

Q4 – AI: From "Hype" to "Hardware Reality"

The fourth quarter saw consolidation in both equities and bonds for the first time since Trump’s April tantrum. We did see some additional support on the monetary policy front and investors were rubbing their collective hands together in anticipation of the big, beautiful bill tax cuts to come. The quarter’s earnings parade also looked solid, which helped muzzle the increasing more prevalent signals of U.S. economic slippage. Still, the rally’s momentum had effectively ended. That comment seems odd I’m sure, especially considering that as recently as last week we saw fresh record highs in the major U.S. and Canadian stock indexes. On December 11^th, the TSX closed at 31,661 as seen in the chart below.

 

 

Throughout the year, we’ve tracked the "crowding in" effect of Artificial Intelligence. While AI spending supported large-cap equities through the summer, the sentiment during this quarter has shifted. We are moving from the phase of "limitless potential" to "tangible ROI." As government spending and AI infrastructure costs began to "crowd out" other private investments, we’ve seen a rotation back toward value—a theme we’ve emphasized as volatility returned to the tech sector. The questioning of valuations in this segment of the market, as well as the lack of enthusiasm in the economic fundamentals persists as we head into the last two weeks of this quarter and this year.

 

This week’s release of the November U.S. CPI stats has already been referred to as “fake” by some (no, surprisingly, not by Trump) and the best label I’ve seen is “swiss cheese” because of the holes in it. Why? Because the 43-day U.S. federal government shutdown meant that there was no data collection in the month of October and hence there is no October CPI period. By the way, this is the first time this has ever happened. Anyway, without October and given that November is typically a month where retailers discount products into Black Friday, we were treated to a cooler than expected inflation headline of 2.7%, compared to 3% in September. Don’t worry though, December should see a rebound in inflation as more tariff pass-through takes place.

 

For the Pyle Wealth Advisory team, there were a number of individual firsts. I’ll begin with Hayley’s solo trip to Dublin to watch the first ever NFL game played in Ireland and one of the teams on the field that day was also Hayley’s (and Ally’s) favourite – the Pittsburgh Steelers. Many of you know that I have an entirely female team that constantly make look good in front of clients. What most of you don’t know is that all of them know more about American football than I do!

 

We have always placed a strong emphasis on learning, from continuing education in wealth management to educating clients on investments and planning. This month, Michelle passed her Conduct and Practices Handbook (CPH) exam, and the entire team is proud of this accomplishment. It also means that she is one step away from being licensed by CIRO (Canadian Investment Regulatory Organization). Congratulations Michelle!

 

As for me, this past year was a mixture of positives and negatives, no different than all of you and the world around us. In July, we held a celebration of life for my brother-in-law, who passed away in the UK but, as a Canadian, wanted to be returned home so to speak. Pam and I then traveled to the UK to say farewell to my last surviving uncle. Yet, we got to spend time with our grown children over the months and see our newest great niece, who was born in the UK back in January. 

 

And this past October I walked into a local music store and satisfied a nagging urge over the years to finally really learn to play guitar. They say it promotes a state of wellbeing, improves memory and mental acuity. Well, until these oversized fingers build calluses and learn to move independently, this is going to be a work in progress. Then again, building calluses and adopting economic and financial patterns that are different than we have been used to may just be the theme we adopt as we say goodbye to 2025 and look forward to 2026.

 

On behalf of the Pyle Wealth Advisory team, I want to wish all of you, your families and loved ones the merriest of holidays and a happy and healthy New Year.     

 

Andrew Pyle

 

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