It’s hard to believe we’re already a month into 2025. As with years past, I had intended to send out an early communication sharing our thoughts on the markets and key themes for the year ahead. However, a busy start to the year, coupled with the rapid developments of the past two weeks, led to at least two full rewrites of this very update (much to my chagrin). That alone speaks to the speed at which markets and policy can shift these days.
From a market perspective, the year has started on solid footing. After a weaker close to December, January opened with some early volatility as investors adjusted to shifting interest rate cut expectations, while Deepseek worries (more on that later) added to the uncertainty. However, markets regained their footing, with strong corporate earnings and a resilient economic backdrop driving a late-month rebound. By the close of January, markets had stabilized, reinforcing that, even amid ongoing uncertainties, the structural drivers remain intact:
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That resilience was tested as January came to a close, with attention quickly shifting to a brewing trade dispute. The U.S. administration’s threat of a 25% tariff on Canadian and Mexican imports quickly became the market’s primary focus, raising questions about trade, economic growth, and stability. Yet, just as the crisis escalated, it eased. At the eleventh hour, Canada and Mexico secured a one-month pause by committing to increased border security and stricter fentanyl enforcement.
For us, this episode serves as a timely reminder of a few key principles that shape how we approach investing.
Lessons from the Past Two Weeks:
Markets move fast, and so do the headlines that drive them. Just a week ago, it looked like we were on the verge of a full-scale trade war—now, that concern has at least temporarily faded. These situations reinforce why avoiding reactionary decision-making is key. A steady hand on the tiller, especially in times of uncertainty, is often the best approach.
2.) Unpredictability Is a Given—Portfolios Should Be Built Accordingly:
The past few weeks highlight a reality we’ve grown accustomed to: policy decisions don’t always follow a straight line. The current U.S. administration’s approach to economic policy is unconventional, making it harder to rely on traditional market playbooks. That’s why we focus less on predicting every twist and more on structuring portfolios based on medium to longer term expectations for the economy, the markets, and the individual companies in which we invest.
The tariff threat underscored something that’s been true for a long time—Canada remains heavily reliant on a single trade partner. While the immediate issue has been put on hold, the broader question remains: how does Canada diversify its economic relationships in the years ahead? If this episode pushes the country toward greater economic expansion and reduced barriers to trade between our own provinces, it may ultimately prove to be a long-term positive.
While policy-driven volatility can dominate the short term, it doesn’t change the bigger forces shaping global markets. AI, robotics, healthcare innovation, and blockchain continue to reshape industries—regardless of who’s in office or what tariffs are being debated. The long-term drivers of growth remain intact, and that’s where our focus stays.
Perspective for the Year Ahead
If the first month of 2025 has shown us anything, it’s that this year will be just as dynamic—if not more so—than the last. The pace of political and technological disruption continues to accelerate, making it more important than ever to know what you own, understand the forces shaping markets, and stay focused on what truly matters.
That’s the lens we apply in managing portfolios, and it’s the approach that has served us well over time. Staying patient, staying informed, and keeping a long-term perspective remain the keys to navigating an ever-changing landscape.
As always, we’ll be keeping a close watch on how things evolve and will continue to share insights along the way.
- Jack
Maximize Your 2025 Savings: TFSA & RRSP Contribution Limits and Deadlines
As we begin 2025, we want to remind you of the contribution limits for your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). For the 2024 tax year, you can contribute up to 18% of your previous year's earned income to your RRSP, with a maximum limit of $31,560. Additionally, the TFSA contribution limit for 2025 remains at $7,000.
Maximizing your RRSP and TFSA contributions is a smart strategy for building a financially secure future, offering tax-sheltered investment growth and potential tax savings. Remember, the deadline to contribute to your RRSP for the 2024 tax year and claim a tax deduction is March 3, 2025—an opportunity you won’t want to miss.
To determine your specific contribution room, refer to your 2024 Notice of Assessment or log into CRA’s My Account, where you can find both your RRSP and TFSA limits. Keep in mind that CRA may overstate your available TFSA contribution room, as most investment firms have not yet reported your 2024 contributions.
Making your contributions early allows you to maximize tax-sheltering benefits for 2025, setting a strong foundation for your financial future.
Choosing Between an RRSP and a TFSA: What’s Right for You?
Deciding whether to contribute to a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA) depends on your financial goals, income level, and stage of life. Both options offer valuable benefits, but the best choice varies depending on your circumstances.
Here’s a quick look at how different individuals might approach this decision:
- Young Professionals: If you’re early in your career and managing student loans or a mortgage, a TFSA may provide the flexibility you need. It offers tax-free growth, easy access to funds, and the ability to re-contribute withdrawals in future years. RRSPs, on the other hand, can be particularly valuable once your income increases, allowing you to maximize tax deductions.
- Retirees & Near-Retirees: Since RRSP contributions are only allowed until age 71, TFSAs become a key tool for continued tax-free growth and estate planning. Spousal RRSPs may still offer advantages for income splitting, but keep in mind that RRSP withdrawals are taxable and could affect government benefits.
- Business Owners: Business owners often weigh the benefits of keeping savings within their corporation versus contributing to an RRSP or TFSA. While corporate accounts offer tax deferral opportunities, TFSAs can provide more long-term tax efficiency and easy access to funds. A well-balanced strategy incorporating all three options can help optimize savings.
Understanding these differences can help you make informed decisions about where to direct your savings. For a deeper dive into the topic, check out our article: Where should my savings go - RRSP or TFSA?
If you have any questions or want to discuss what makes the most sense for your financial situation, feel free to reach out—I’d be happy to help!
- Alysha
DeepSeek Shakes Up the AI World, but the Full Story Unfolds
On January 27, DeepSeek made waves in both the AI industry and the stock market. Its R1 model was initially presented as a low-cost rival to top U.S. AI systems like ChatGPT, sparking excitement and uncertainty. Investors reacted quickly—shares of major tech companies dropped sharply, with nearly a trillion dollars erased from the U.S. market. The idea that China, despite restrictions, had developed such a powerful AI with fewer resources raised big questions about global competition and the reliance on expensive computer hardware at the core of leading American companies. However, from the start, I suspected there was more to the story.
As the week unfolded, my nearly two decades of investing in technology and deep understanding of AI infrastructure helped me see beyond the initial headlines. Analysts soon confirmed my suspicions—DeepSeek had relied on NVIDIA’s top-tier hardware, making its true costs higher than first reported. By Friday, Microsoft was investigating whether DeepSeek had distilled OpenAI’s ChatGPT technology—replicating or deriving elements of it - and NVIDIA was looking into whether its restricted chips were involved in the training process. What began as a dramatic “David vs. Goliath” narrative quickly became a deeper discussion about compliance, intellectual property, and the realities of AI development.
AI is evolving at a breakneck pace, making it harder than ever to distinguish true disruption from incremental progress. What’s clear in this case is that while DeepSeek built a new AI chat model that users enjoy using, its advertised cost advantage was highly misleading. The deeper lesson—reinforced by the leading minds in Silicon Valley—is that scale, particularly in hardware, remains the most reliable path to vastly improved AI capabilities—and perhaps, to the holy grail of AGI..
– Jack