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2025 Investment Year in Review and 2026 Outlook

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Markets rewarded Discipline in 2025: Here’s what that Means for 2026

 

Canva Custom Creation: Lowrie Financial

By Steve Lowrie, CFA

Special to Financial Independence Hub

As we closed out 2025, investors found themselves in the kind of environment we all hope for but rarely experience. Global Equity markets delivered exceptionally strong results. Fixed income did exactly what fixed income is supposed to do: specifically, preserve capital and reduce volatility.

From a long-term planning perspective, this is ideal. Strong returns spread across diversified portfolios create exactly the type of environment disciplined investors are positioned to benefit from.

Periods like this also highlight an important truth about investing. Strong markets reveal whether your philosophy is sound. Weak markets reveal whether you truly believe it.

This is a good time to revisit the principles that carried disciplined investors to a successful 2025.

1. What 2025 Reinforced about Sound Investing

Every year brings events that are impossible to predict. Yet the long-term evidence continues to point in the same direction.

A globally diversified portfolio remains one of the most reliable ways to build and preserve wealth.

Market leadership shifts. This year (2025) both Canadian and International equities outperformed U.S. equities.

Maintaining a rebalancing discipline once again created value by doing the opposite of what you want to do: selling what has recently done really well and buying what has lagged.

None of these outcomes required prediction. All of them required discipline.

Discipline is what keeps investors positioned to benefit when markets move higher, which is exactly what happened in 2025.

2. A Year near All-time Highs: What that means and what it does not mean

At the time of writing, many global stock markets indices are at all-time highs. This often triggers two opposite emotions.

Some investors feel relief that their plan is working. Others feel anxiety that a pullback must be around the corner.

The reality is more straightforward. Markets spend a surprising amount of time at or near all-time highs. That is what you should expect from an asset class with a positive long-term expected return.

New highs do not forecast a crash or pullback. For example, looking back at U.S. stock returns (S&P 500) for the past almost 100 years, the return 3 and 5 years after reaching an all-time was pretty much the same as all other periods. All-time highs simply confirm that staying invested has continued to work.

The right question is not “How long will this last?”
The right question is “Is my portfolio still aligned with my goals?”

If the answer is yes, the appropriate action is usually to stay the course.

3. One Thing that stood out in 2025: The Private Investment Push

Each year, one trend tends to reach a volume that’s hard to ignore. In 2025, that trend was the surge in private investments being marketed to individual investors: private equity, private credit, real estate, liquid alternatives, and farmland structures all positioned as retail-access solutions.

None of this is new. What’s new is the scale and intensity of the sales activity behind it.

This raises a straightforward question: if private investments have historically been most beneficial for large institutions, why the sudden urgency to market them to individual investors?

A few likely factors: individual investors typically accept higher fees than institutions negotiate, private structures need steady capital inflows, and strong historical performance always attracts aggressive sales, or more commonly called “distribution” using industry jargon.

Private investments aren’t inherently problematic. They can serve a purpose for the right investor under the right conditions.

However, the current surge appears driven more by sales momentum than investor need, which is usually a signal to proceed with caution.

4. What Investors should do with this Information

Experience suggests a few simple guidelines: Continue Reading…

How do you intend to retire?

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By Mark Seed, myownadvisor

Special to Financial Independence Hub

Unless you go back in time, retirement no longer means stopping all forms of work from the factory job: Retirement means different things to different people.

While there remains a formal definition of retirement (in that there is the action of leaving one’s job or ceasing to work) retirement has many flavours these days. The traditional definition has evolved and no longer fits what people are doing and seeking.

As I approach retirement from my own career at the end of March 2026, I wondered how you intend to retire.

How do you intend to retire?

The rise of standardized work during the 20th century coupled with an abundance of industrialized or corporate jobs gave rise to pension plans as a key employee attraction and retention benefit. So, you worked hard for 30-35 years and then you retired with your pension as part of the long-term total compensation model: a model that remains in place to today.

Defined benefit (DB) pensions give retirees fixed lifelong monthly payments based on salary and a years of service formula. Some DB plans even offer a degree of indexing to fight inflation. But all DB plans represent a premium form of dependable retirement income that is not subject to financial market drama: since the financial risk is on the employer and not on the employee or retiree.

But times are a changing …

The long retreat of DB employee benefits has been well documented, shifts have occurred in the employer-employee dynamic involving unions along with shifts in the job market to industries where a DB pension is simply just not offered.

Canada’s retirement income system is often described as having three pillars, although variations exist.

The first pillar provides benefits based on age and years of residence in Canada: so it includes the Old Age Security (OAS) pension, the Guaranteed Income Supplement ((GIS), if that applies to you for lower-income folks), the Allowance and the Age Credit. This first pillar is funded largely through general tax revenues.

The second pillar consists of mandatory earnings‑related programs so you can put the Canada Pension Plan (CPP) and, in Quebec, the Quebec Pension Plan (QPP) in that bucket. These are public pensions, funded by mandatory contributions from workers and employers, as well as income from investments made with these contributions.

And finally the third pillar is composed of the aforementioned workplace pension or as the workplace employee compensation model continues to shift, it could be a Group RRSP or another form of employee compensation as well. “Private” retirement income planning may also include your own assets: RRSPs, TFSAs, LIRAs and any non-registered investments.

Weekend Reading - Your retirement income sources

Source: Government of Canada.

I share this information for context when it comes to the following types of retirement you might pursue: how you intend to retire. Your path to retirement could be one or more of these types below.

1. Traditional Retirement

I define this as follows: you work for decades on end uninterrupted and you stop working for good. During this period of time, you might have contributed to a DB or Defined Contribution (DC) pension plan or not at all.

If you had a pension, the automatic savings nature of any workplace pension would be very good for most people — this “forced savings approach” is a huge benefit unto itself – pay yourself first as per The Wealthy Barber.

If you had a pension (the golden handcuffs idea) and depending on the type of pension you have, pension income gets paid out in different ways at retirement. Some plans cannot start before a certain age while others can be accessed earlier. Depending on your retirement-income goals this flexibility (or lack of flexibility) is an important consideration in your financial plan: one I’ve struggled with myself.

There are many benefits to traditional retirement by remaining with one key employer for decades on end (i.e., work stability; the guaranteed pension income for life; don’t have to take too much personal investment risk; could be other workplace retirement benefits like health benefits, travel benefits or life insurance benefits) but traditional retirement also seems to come at a personal cost of trading your life energy for employer time for many decades.

The traditional path to retirement may not work for many people these days. It did not work for me.

2. Semi-Retirement

I define this as follows: you want to pursue some form of life-work balance.

This was in fact something important for my wife and I to try out in 2024 and 2025:  so we did.

My wife toggled back and forth between full-time and part-time work up until her retirement in October 2025.

I continue to enjoy my part-time role at work (until the end of March 2026): I wanted to remain with my employer for a bit, still contribute, just in a reduced capacity.

After I retire from my current career, I might still work (gasp!) but only a few days per week or a few days per month. We shall see.

I will continue to blog here for another year or so too and this site doesn’t make minimum wage: I enjoy running it.

Semi-retirement is not about income but it may include some small financial compensation for doing something you really enjoy/want to pursue: trading your time or energy for some income.

This path and related definition of retirement has always appealed to me and much more so than just early retirement and not working again.

3. Early Retirement

Some bloggers or FinFluencers might express this is a “better way” to retire but when you really think about it: nobody in their 30s or 40s really retires early and never works again. I haven’t met one of them yet.

They continue to work for some income and many do so on their passion projects. Nothing wrong with that of course, being an entrepreneur, you just need to be honest with folks vs. selling some dream as you hustle a book or a podcast or something else to support your lifestyle.

In Your Money or Your Life, author Vicki Robin equates ample savings (and investments) with freedom. This means you have the freedom “to leave your job if the boss is intolerable or the benefits have just been yanked.”  With sufficient savings (and investments) you have the opportunity to transform your life, including achieving Financial Independence if you want to.

Robin likens financially independent thinking to cartography: you need to create your own map. Your map will depict the delta between your life today and the one you want to lead. The results of financially independent thinking will allow you to step back from your assumptions and emotions about money and observe them objectively.

The concepts related to early retirement are not new but certainly lots of modern social media marketing have propelled this thinking into a new discussions and forums.

I’m a big fan of financial independence, just not any Retire-early part of FIRE marketing.

4. Mini-Retirements

Popularized by Tim Ferriss’ 2007 bestseller, The 4-Hour Workweek, Ferriss proposes you redistribute your retirement over many decades. Other books and articles have suggested the same over the years.

In this form of retirement you work in bursts or stints. For example, you might work for a few years and then take a few years off work only to work yet again.

When it comes to mini-retirements, I’ve considered this approach but quickly dismissed it since I was always more focused on my crossover point and becoming financially independent vs. needing to work to fund periodic time off only to work again …

Crossover Point

We realized our crossover point in 2024.

In doing so, that allowed us to start shifting both of our workplace schedules to part-time as part of a transition to retirement sooner than most.

How do you intend to retire?

The answer to this question is very personal and quite subjective.

Which type of retirement is right for you?

“It depends” is the common personal finance answer to pretty much everything but it’s so true.

Traditional retirement never appealed to me nor did any sort of mini-retirement either. So, I guess I’ve opted for the semi-retirement path and if you want to suggest that I’m an early retiree well that’s probably somewhat correct too.

Your financial planning and retirement income planning will depend on many personal factors but the ingredients to any retirement or some form of financial independence are pretty generic:

  1. Spend less than you make and invest the difference: This obvious expert advice really never goes out of style. A high, consistent savings rate is a get wealthy eventually path to retirement.
  2. Kill all high-interest debt and remove all debt from you life when you can: Debt management comes in the form of removing ongoing credit card debt, killing off high interest loans, and managing any other consumer debt well. If you are always paying other people first it will be hard to get ahead in life.
  3. Educate yourself / gain financial literacy over time: Another obvious truth but it’s critical to educate yourself so you develop a better understanding of not only how to manage your finances but also the motivations of others around you. Otherwise, you will pay other people lots of money to do your financial thinking for you.

Whether you are in the early days of your financial journey, preparing for retirement, or successfully in retirement, I would be happy to learn what is working for you. How do you intend to retire? How did you retire?

Leave a comment below. I look forward to your engagement.

Yours in happy planning and celebrations for what lies ahead in 2026.

Happy New Year!

Mark

Weekend Reading - Expenses that may disappear edition

Source: Carl Richards, Behavior Gap.

Mark Seed is a passionate DIY investor who lives in Ottawa.  He invests in Canadian and U.S. dividend paying stocks and low-cost Exchange Traded Funds on his quest to own a $1 million portfolio for an early retirement. You can follow Mark’s insights and perspectives on investing, and much more, by visiting My Own Advisor. This blog originally appeared on his site on Dec. 31, 2025 and is republished on Findependence Hub with his permission.

6 Financial New Year’s Resolutions for 2026

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Image courtesy TriDelta Financial

By Matthew J. Ardrey, CFP, R.F.P. FMA, CIM®

Special to Financial Independence Hub

As I sit here at the beginning of 2026, I would like to take a moment to reflect on 2025. We had increased U.S. protectionism through tariffs, labour market concerns with the advancement of AI, changing interest rates and another strong year of stock market returns.

With all of these macro themes out of our control, I thought of some of the personal conversations I had with clients during the year about things in their control.

1.) Keep a Positive Cashflow

One of the simplest rules in personal finance is to spend less than you earn. One of the most consistent matters I see when drafting financial plans is people know what they earn and know what they save, but do not have a complete grasp on what they are spending.

A simple way to know what you are spending is to subtract savings from after-tax earnings. Whatever remains you are spending. To take control of that spending though, you need to know where the funds are being spent. Armed with that knowledge, you can decide to continue spending on something, reduce it or cut it out altogether.

Once you are in control of your budget, use it to your advantage to save. Savings are key to wealth creation.

2.) Stay Invested

We have now had several strong years of market performance since COVID in 2020. There is no way we can predict what will happen in 2026. We may have another great year or maybe we won’t. Either way, studies show over and over again that staying invested is one of the most important factors in financial success.

There is a famous phrase in investing, “time in the market beats trying to time the market.“ Aside from how impossibly difficult it is to time them market, this also shows the power of compounding returns over time.

3.) Getting Wealthy vs. Staying Wealthy

Many financial plans I did for new clients this year were for people planning to retire in the next five years and almost every one of them had a portfolio that was at least 80-90% in stocks.

A large allocation to stocks is a great way to get wealthy but may not be the best way to preserve your wealth, especially when decumulating that wealth as part of your retirement plan.

Though we have not seen much of it in recent years, stocks can be a very volatile asset class. In the 2008 Global Financial Crisis, the S&P500 fell more than 50% and took close to six years to fully recover. A similar situation would be devastating to a retirement plan, as not only would the portfolio value fall, but there would also be crystallization of losses, as stocks are sold at losses to fund the retirement.

A well diversified portfolio among asset classes and geographic regions can help mitigate the impact of market declines. Once you have made your wealth, you don’t need homeruns to win the game. You can get around the bases on singles and doubles.

4.) Risk Mitigation: Part 1

In every plan I prepare, I want to create safety margin for my client. It could be using a Monte Carlo volatility analysis in retirement projections or an emergency fund against loss of income or large, unexpected expenses.

The benefits of these safety margins include the ability to survive a negative event, stress reduction and with that the ability to think more clearly to make better decisions. Stress clouds decision making and in a time of crisis, it is clear thinking that is most needed.

Life is never a straight line from A to B. Preparing for inevitable risks that life will bring you is sound financial planning.

5.) Keeping up with the Joneses

There is an immense amount of social pressure to fit in. To make sure you are of a similar status of those around you. But have you ever thought, how do others achieve or maintain that status? Your neighbour with the fancy house, pool and great car make look wonderful on the outside but may be swimming in debt up to their neck to “afford” all of their luxuries.

This is where the real value of a comprehensive, personal financial plan is visible. It will quantify if you can afford the reality you want. It also removes all of the rules of thumb and what works for the average person and focuses on what you need to do to achieve your personal financial goals.

6.) Risk Mitigation: Part 2

Much of financial planning is focused on the happy ending. Sailing off into the retirement sunset and enjoying the life you have worked so hard to earn. Unfortunately, life throws us curveballs and ensuring the risk management side of financial planning is covered is just as important. Continue Reading…

Opinion: Bitcoin will continue dropping in 2026. The thrill is gone

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Image courtesy AlainGuillot.com

By Alain Guillot

Special to Financial Independence Hub

Bitcoin was supposed to be many things: digital gold, a hedge against inflation, a revolutionary alternative to money itself. In 2025, it turned out to be something far more mundane: a disappointing asset with no intrinsic value and shrinking excuses.

Let’s start with first principles. Bitcoin has no intrinsic value. It does not produce cash flow. It does not generate earnings. It does not represent ownership in anything productive. Its value comes from exactly one source: the hope that someone else — ideally a greater fool — will buy it from you at a higher price later.

This is not a controversial statement. It is textbook Greater Fool Theory. Bitcoin holders are not investors; they are speculators betting that demand from new buyers will continue indefinitely. But here’s the problem: by now, every fool on Earth has already heard of Bitcoin.

The Tulip Mania Parallel isn’t an Insult: It’s Accurate

Bitcoin enthusiasts hate comparisons to the Dutch Tulip Mania of the 1600s, but the similarities are undeniable. Tulips weren’t valuable because of what they produced; they were valuable because people believed they could resell them at higher prices. Sound familiar?

Tulips collapsed when the pool of new buyers dried up. Bitcoin faces the same mathematical reality. Adoption is no longer early. There is no untapped population waiting to “discover” Bitcoin. Those who wanted exposure already bought in years ago.

What happens next in any speculative bubble is predictable:

  • Some holders need real-world money for real-world needs: food, rent, taxes.
  • Others look at stagnant prices and lose interest.
  • Boredom replaces euphoria.
  • Selling begins.

Bitcoin does not fail dramatically all at once. It fails slowly, then suddenly.

2025: An Embarrassing year by any standard

Supporters will try to spin the numbers, but facts are stubborn.
In 2025, Bitcoin declined by roughly 4%.

That alone would be bad enough. But investing is always about opportunity cost.

During the same period:

  • The S&P 500 rose about 18%.
  • Productive businesses generated profits.
  • Shareholders were paid dividends.
  • Capital was allocated to companies that actually do something.

Bitcoin did none of that.

A supposedly revolutionary asset losing money in a strong market is not “volatile”: it’s underperforming. A 4% decline isn’t a badge of honor. It’s an embarrassment.

The Myth of Digital Gold is dead

Bitcoin was marketed as “digital gold,” yet gold has thousands of years of history as a store of value. Bitcoin has barely survived a few market cycles, all fueled by cheap money and hype.

To make things even more embarrassing for Bitcoin holders, real gold prices went up 67%, breaking the relationship between real gold and digital gold. Real gold is still tangable and pretty to see; Bitcoin is none of those.

Gold is used in jewelry, electronics, and industry.

The real intrinsic value is that it’s a great tool for criminal activity. When regular citizens hold Bitcoin, they are adding and abetting the criminals. Bitcoin’s real usefulness is:

  • Money Laundering (Digital Washing Machine)
  • Ransomware and Extortion
  • Online Black Markets
  • Tax Evasion and Income Concealment
  • Sanctions Evasion
  • Scams and Fraud

Remove hype and liquidity, and Bitcoin has nothing left to stand on.

Prediction for 2026: No new Highs, Likely new Lows

I’ll make a clear prediction:
Bitcoin will never again reach $100,000. Continue Reading…

The two most powerful forces in Markets

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Image Shutterstock courtesy Outcome

And the seasons they go round and round

And the painted ponies go up and down

We’re captive on the carousel of time

We can’t return we can only look behind

From where we came

And go round and round and round

In the circle game

  • The Circle Game, by Joni Mitchell

 

By Noah Solomon

Special to Financial Independence Hub

This month, I will discuss mean reversion and momentum, which are arguably the two most powerful forces in markets. I will demonstrate that while these two influences can sometimes work in tandem, they often stand in fierce opposition. Lastly, I will discuss mean reversion and momentum in the context of the current market environment, including the related implications for investors.

Mean Reversion: Valuation’s Revenge

One of the most conclusively documented phenomena in modern markets is mean reversion, which is based on the historical tendency of returns to gravitate toward their long-term average. Above-average returns tend to be followed by below-average returns, and vice versa, thereby resulting in a reversion to “normal” levels over the long term.

Buffett succinctly summarized this observation in his statement, “I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of a ‘New Era’ philosophy where trees really do grow to the sky.“

Mean reversion has been pervasive across geographies, sectors, individual stocks, and broad asset classes. Countries whose markets have outperformed their peers by large amounts have subsequently underperformed, while previously unloved regions have gone on to be investor favourites. Similarly, “winning” stocks and sectors have morphed into stragglers, while those that were neglected have become market heroes. Lastly, at times when broad asset classes have experienced higher than average returns, they have subsequently delivered subpar performance, while producing streaks of better than average performance after periods of subpar returns.

At the heart of mean reversion lie valuations. Whenever a given stock, sector, or market has delivered higher than average returns for an extended period, this outperformance is usually accompanied by lofty valuations which are fundamentally unjustifiable. These excessive multiples begin to weigh on prices, leading to underperformance and the return of valuations to more rational levels. By the same token, at times when a given asset or group of assets have experienced below average returns for a prolonged period, their multiples tend to become unreasonably depressed. The resultant “bargains” ultimately attract investor interest, which in turn leads to outperformance and the establishment of more rational valuations.

Momentum: The Road to Valhalla and Dystopia

The other principal force that drives markets is mean reversion’s volatile counterpart, momentum. Momentum investing capitalizes on the tendency for trends to persist by buying into rising assets and selling into falling ones. As is the case with mean reversion, academic research has found momentum across individual securities, sectors, and broad asset classes.

Unlike mean reversion, which is based on fundamental valuation principles, momentum is best explained by behavioural biases and emotions. Spurred by fear of missing out (FOMO) and greed, investors tend to buy assets whose price has been rising, leading to further gains. In similar fashion, fear and despondency can cause people to sell assets whose price has been falling, thereby reinforcing negative trends and causing additional losses.

Mean Reversion, Momentum, & the Market Cycle

As illustrated in the graph below, the market cycle can be divided into four phases.

The Market Cycle: S&P 500 Index

 

1st Phase: The March to Valhalla

  • At the beginning of this phase, markets are neither materially overvalued nor undervalued. Then, some catalyst or combination of factors causes prices to begin straying increasingly further above their “fair” or intrinsic values.
  • This deviation is often caused by overly optimistic assumptions about the economy and/or profit growth. It can also stem from overexcitement about some theme du jour, like technology stocks during the dotcom bubble (as depicted in the 1st phase in the graph), real estate during the years preceding the great financial crisis, or (dare I say) today’s AI-related companies.
  • Towards the end of the period, optimism morphs into full-blown euphoria and the momentum monster kicks into high gear. This dynamic eventually causes many assets to be priced to perfection, leaving them in the precarious position of offering little, if any upside while harbouring significant downside risks, as was the case in late 1999-early 2000.

2nd Phase: The Beginning of the End

  • This period takes the reins from its predecessor when valuations stand well above average levels, broad sentiment starts to turn, and fear begins to take centre stage, thereby causing prices to start falling.
  • As the phase progresses, negative momentum begins to take hold, and prices continue their decline. This process unfolds until they once again reflect reasonable assumptions regarding the future and assets are more or less fairly valued, as was the case between the peak of the dotcom bubble and the bear market bottom of late 2002.

3rd Phase: The End of the World is Nigh – I Will Never Invest in Anything Again

  • At this point, fear and skepticism begin to metastasize into full-blown panic, accompanied by a widespread belief that things can only get worse. Relatedly, negative momentum reaches its nadir, leading to a final cyclical swoon in prices, as occurred towards the end of the tech-wreck in mid-to-late 2002.
  • By the end of the period, sentiment becomes completely washed out, leaving many assets at materially depressed valuations that offer significant upside for relatively low risk.

4th Phase: Maybe Things Aren’t So Bad – I Like Bargains

  • At the beginning of this phase, all but the most steel-nerved investors have run for the exits in one form or another, as was the case at the bottom of the early 2000s bear market.
  • Tempted by bargain basement valuations, a minority of rational and courageous contrarians begin stepping in to scoop up bargains.
  • The advent of fresh buying, combined with a dearth of remaining sellers, sparks a recovery in prices.
  • This recovery begins to attract additional buyers to the party and reawakens the ghost of positive momentum, leading to further gains until the end of the period, when assets are neither materially undervalued nor overvalued.

Postscript:

  • Repeat phases 1-4 in tragic (or comedic) fashion of Shakespearean proportions.

Momentum is a Fairweather Friend. Value is Forever

Over the short term, momentum and sentiment are the primary determinants of asset prices. At times when FOMO, greed and optimism are most pronounced, the power of momentum cannot be understated. Rationality and traditional valuation principles are widely forgotten, which can lead to irrationally high and unsustainable prices. Conversely, when fear and pessimism rule the roost, negative momentum can easily overshadow the fact that many beaten down assets present unusually attractive opportunities, which in turn can lead to senselessly low prices.

Notwithstanding that extreme environments have historically reverted, investors have time and again failed to take advantage of this fact, joining the overwhelming chorus of “this time it’s different.” According to famed economist John Kenneth Galbraith:

“When the same or closely similar circumstances occur again, sometimes in only a few years, they are hailed by a new, often youthful, and always supremely self-confident generation as a brilliantly innovative discovery in the financial and larger economic world. There can be few fields of human endeavor in which history counts for so little as the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.”

However, sentiment and momentum are fickle beasts that are extremely difficult, if not impossible to time. While they can sustain for extended periods and carry prices to fundamentally absurd extremes at both ends of the spectrum, they also have a tendency to suddenly and violently turn, leaving those who had been riding the momentum express caught in a train wreck of losses. As legendary trader Ed Seykota stated, “The trend is your friend except at the end where it bends.” Continue Reading…