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Looking Back: 2025 Financial Insights Year-end Recap
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By Steve Lowrie, CFA
Special to Financial Independence Hub
As we close out 2025, it’s worth pausing to reflect on the financial principles that matter most. This year, I focused on investment philosophy, retirement planning options, and helping you avoid strategies that look appealing but rarely deliver results.
Below, I’ve grouped this year’s most important insights into themes that matter for your financial future, not because they made headlines, but because they make a difference in real portfolios and real lives.
2025 Financial Insight 1: Focused and Disciplined Investment Philosophy
Measure what actually Matters
Too many investors obsess over beating “the market”; but which market? U.S. stocks like S&P 500? Canadian stocks? The NASDAQ, which is really a proxy for technology stocks? That target keeps shifting based on whatever performed best recently, making it a moving goalpost that has nothing to do with your actual goals.
In Personal Financial Goals vs. Market Benchmarks, I pointed out that your only meaningful benchmark is whether you’re on track to fund the life you’ve planned for. Everything else is just comparison that pulls you off course.
Ask yourself: Am I on track to retire when I want to? Can I fund the experiences that matter most? If the answer is yes, you’re succeeding, regardless of what any index did this quarter.
Don’t bet against the Market
When breaking news hits, it’s tempting to think you can act before the market does. But as I wrote in Betting on the Markets Being Wrong, by the time you hear or read about a news event, it’s safest to assume the market has already priced it in. Every trade has two sides, and the question to ask is: Who is on the other side of mine? In today’s markets, where roughly 80 to 90 per cent of trading is done by institutions with teams of highly skilled analysts and high-powered computers, the odds are that it’s an institution on the other side. That institution, or the person trading on its behalf, must believe they are getting a good price; otherwise, they wouldn’t do the trade. To take this a bit further, you also must ask yourself: What do you know that a professional on the other side of the trade doesn’t know?
Instead of trying to outsmart the market, recognize that prices already reflect available information. Successful investing isn’t about prediction; it’s about discipline.
The Gap between Belief and Action
Perhaps the most troubling revelation of 2025 was detailed in The Financial Philosophy Gap. Research analyzing over 4,000 Canadian financial advisors found they systematically underperformed simple, evidence-based strategies by approximately 3% annually, not because of conflicts of interest, but because of genuinely misguided beliefs about investing.
Even more striking: when these advisors left the industry, they continued making the same mistakes in their personal portfolios. The lesson? Philosophy without consistent execution isn’t really philosophy at all. It’s just expensive intentions.
2025 Financial Insight 2: Planning for your Retirement and Beyond
Three approaches to Retirement Freedom
Retirement at 65 is becoming quaint. In Mini, Semi, or Early Retirement, I explored three very different approaches people are actually taking:
Mini-retirement (a career intermission to travel or recharge) requires dedicated savings but lets you enjoy life while you still have the energy. Semi-retirement (scaling back to part-time work) dramatically reduces the capital you need for full retirement while maintaining purpose and social connection. Early retirement (the complete exit) requires substantially more savings, potentially millions, to fund decades without employment income.
Each path has different financial implications for CPP timing, RRSP withdrawals, and withdrawal rates. The right choice depends on your resources, your lifestyle goals, and what brings meaning to your life.
Passing it on, Thoughtfully
With over $1 trillion expected to transfer from baby boomers to younger generations in Canada, Transferring Wealth to Your Children, Sensibly examined two contrasting approaches: incremental lifetime gifts versus traditional large estate inheritance.
The analysis revealed striking differences. Incremental giving can reduce lifetime taxes significantly and offers the personal reward of seeing your wealth make a difference while you’re here. But it comes with a financial trade-off: in my example, about $1.1 million in today’s dollars compared to maximizing estate value.
The best approach isn’t about the math alone. It’s about aligning your financial decisions with your values, supporting family at meaningful life stages, and creating opportunities for shared experiences and guidance.
2025 Financial Insight 3: Avoiding Investment Traps
The Real Estate Obsession
Canadians love real estate, but in Why Canadians Love Real Estate as an Investment Vehicle, I examined why the numbers often don’t support the emotional attachment.
From 1990 to 2023, average Canadian home prices grew about 6.3% annually. After maintenance, taxes, insurance, and transaction costs (roughly 2% of market value yearly), the net return drops to about 4.5%. Meanwhile, the S&P/TSX Composite returned roughly 8% annually over the same period.
More concerning, cap rates on investment properties have fallen so low that many investors now rely entirely on capital appreciation, not cash flow, to make any sort of positive return. That’s not an investment strategy. It’s speculation.
The DIY Trap
In DIY Investing: Is It Really for You?, I explored why managing your own investments is harder than it looks. Dr. William Bernstein argues that successful DIY investing requires four rare qualities: genuine interest in the process, mathematical skill, strong grasp of financial history, and emotional discipline.
Even if you have all four, most investors still underperform the very investments they hold, not because they pick bad funds, but because they buy when markets feel good and sell when they feel scary. The result is a silent drag on performance from poorly timed decisions. Continue Reading…
How to Decide which Canadian Bank Stocks are Best for You
Posted By Canadian bank stocks are true blue chip stocks and have long been a top choice for growth and income. Today’s economic uncertainty doesn’t change that
We’ve long recommended that all Canadian investors own two or more of the Big Five Canadian bank stocks — Bank of Nova Scotia, Bank of Montreal, CIBC, TD Bank and Royal Bank. That’s mainly because of the importance of these institutions, and their blue chip stocks, to Canada’s economy. That hasn’t changed despite lingering economic uncertainty about high inflation. Investing in bank stocks remains a popular strategy for many Canadians.
Canadian bank stocks – unlike Canadian penny stocks – remain key lower-risk investments. As well, the Big Five Canadian bank stocks all have long histories of annual dividend increases. That makes the Big Five the best bank stocks that the country has to offer. It also makes them top blue chip stocks for income investors.
Picking the best bank stock between two of Canada’s big banks is a lot harder choice than choosing between a bank stock and a Canadian penny stock. Still, if you’ve decided to start by investing in bank stocks with just one Canadian bank, one key question remains: which Canadian bank is the best bank stock for you? How can you tell which bank will give you the best long-term performance? There are a few performance clues you can look out for.
Performance clues to look for
When deciding on the best bank stock to buy, you want to start with the same criteria you would use for any investment in blue chip stocks (as well as with a Canadian penny stock):
We believe Canadian bank stocks are still well-positioned to weather downturns in the Canadian economy, despite their significant increases in loan-loss provisions over the last couple years because of COVID, the inflation that followed, and its impact on the economy. All five stocks trade at attractive multiples to earnings and are well positioned for any economic fallout from continuing high interest rates. Investing in bank stocks remains a popular strategy for many Canadians.
Canadian bank stocks have always been some of the best bank stocks globally. They’re also among the best income-producing securities: true blue chip stocks. Below are 3 tips for using dividends as barometer for picking Canadian bank stocks when investing in bank stocks.
1.) Dividends are a sign of investment quality. It’s why so few Canadian penny stocks offer them. While some good banks reinvest a major part of their profits instead of paying dividends, failing banks hardly ever pay dividends. So if you only buy stocks that pay dividends, you’ll automatically stay out of almost all the market’s worst banks.
2.) Dividends can grow. Stock prices rise and fall, so capital losses often follow capital gains, at least temporarily. Interest on a bond or GIC holds steady, at best. But the best banks like to ratchet their dividends upward: hold them steady in a bad year, raise them in a good one. That also gives you a hedge against inflation.
For a true measure of stability when hunting for the best bank stocks, focus on banks that have maintained or raised their dividends during economic and stock market downturns. These banks leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they provide an attractive mix of safety, income and growth. Canadian banks stocks are well known for their financial stability in the face of economic downturns.
3.) Look for Canadian bank stocks with consistent dividends. One of the best ways of picking a quality stock is to look for banks that have been paying dividends for at least 5 to 10 years. Dividends are cash outlays that an unsuccessful bank could never produce. A history of dividend payments is one trait that all the best dividend stocks have.
Don’t limit your investing to bank stocks
Simply put, a well-constructed stock portfolio will make your life easier and maximize your gains.
Early in their investing careers, many investors have only a vague idea of the value of a planned portfolio when investing in the stock market. Continue Reading…
Where global market leadership could shift to in 2026 (hint, likely not the U.S.)
By Dina Ting, CFA, Franklin Templeton ETFs
(Sponsor Blog)
Global markets are entering 2026 with widening dispersion, lowering cross-country correlations and a shifting interest-rate landscape that is reshaping relative equity opportunities.
After several years dominated by a narrow group of large-capitalization U.S. names, investors now face a more varied, region-driven market. With policy cycles, earnings paths and structural growth drivers pulling in different directions, we believe broad global diversification — with targeted country tilts — may be key to capturing the next wave of leadership.
Regardless of whether artificial intelligence (AI) enthusiasm proves overdone, the broader U.S. economy is clearly slowing. Sentiment weakened heading into the “Black Friday” sales season, and all three components of The Conference Board’s Expectations Index — business conditions, job prospects and future income — fell in November. As the organization’s chief economist noted, “Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically after six months of strongly positive readings.”
What’s more, many investors continue to have limited exposure to international markets within their portfolios. Single-country exchange-traded funds (ETFs) can help broaden global allocations and add diversification by accessing markets with unique long-term growth characteristics. While the Federal Reserve is easing cautiously, parts of Europe appear closer to stabilizing, with pockets of above-trend momentum emerging. Diverging rate paths are reinforcing this global split. In the United Kingdom, we expect steady Bank of England cuts to relieve consumer pressure while boosting the appeal of high-dividend stocks.
Across Asia, several central banks remain in easing mode. If U.S. growth cools while Asian momentum holds, market leadership could broaden further. In South Korea, even incremental Bank of Korea cuts could lift exporters and tech firms by improving funding conditions and helping fuel the global semiconductor rebound. Meanwhile, some economists expect Brazil’s central bank to trim its current elevated rates, lowering financing costs across banks and consumer sectors. Mexico’s Banxico has already begun easing and may continue if inflation stays contained: supporting both corporate activity and household demand.
Together, we believe these shifts point to a more supportive monetary backdrop in 2026 for investors ready to look beyond the United States.
Recent correlation trends also indicate that markets such as Taiwan, Japan and South Korea have seen their correlations with the S&P 500 Index decline over the past year.
Falling cross-country correlations amplify diversification benefits
Diverging policy paths, currencies and sector exposures are producing more idiosyncratic returns, allowing international allocations to contribute more meaningfully to portfolio resilience.
The United Kingdom offers compelling value, in our analysis. Sticky but moderating inflation and ongoing Bank of England rate cuts support its defensive, income-heavy market. UK-US equity correlation has dropped 57%, falling from roughly 0.30 over three years through October 31, 2025, to 0.13 over one year through the same date: a meaningful shift that enhances the United Kingdom’s diversification role within global portfolios.1
We believe Brazil is positioned as a value and income opportunity supported by commodities, interest‑rate cuts and fiscal discipline. Government forecasts now call for gross domestic product growth of roughly 2.4% in 2026, with inflation easing toward the country’s official 3% target.2 Valuations remain attractive to us relative to emerging‑market peers. If global manufacturing and commodity cycles reaccelerate alongside domestic monetary easing, then Brazil could continue delivering late‑cycle cyclicality and income. Continue Reading…
What if you run out of life? Save-Spend balance
By Bob Lai, Tawcan
Special to Financial Independence Hub
Let’s be honest here, inflation is real. Very real! Despite being as frugal and careful with our expenses as possible, we are seeing an increase in our living expenses; arguably, just like everyone else.
Unfortunately, many of these expenses are completely outside of our control …
- We were just informed by the city that our property tax increased by 11.5% this year
- Our monthly equalized Fortis-BC payment increased by 20% due to natural gas rate adjustments
- Gas prices recently hit over $2 per litre
- Groceries cost way more now. I mean, a bag of Hardbite chips is over $5, and avocado costs $2 at regular price? What is this, highway robbery?
Let’s not forget the rising interest rates, leading to higher mortgage payments.
And those are just core expenses. Now if we consider discretionary expenses as well …
- It’s not unusual to see hotels at over $250 per night, or even over $300 and even $400! In fact, recently a lawyer complained about the hotel prices in Vancouver. And is not alone!
- Staying at an Airbnb is just as costly and sometimes it costs even more than staying at a regular hotel
- Airfares are far more expensive than pre-COVID. Good luck finding tickets to Europe for under $1,000 per person.
- Dining out is more expensive. A bowl of ramen costs close to $20 with taxes and tips added. We spent over $120 for the four of us dining out at a local White Spot last month, and we only had burgers, a couple of milkshakes, and a dessert to share.
You get the picture. At this point, I wouldn’t be surprised that our 2023 annual expenses will be considerably higher than the previous years.
Feeling frustrated with our expenses
The other day I was looking at our budget/expense tracking spreadsheet. To my horror, I noticed that we have been overspending in our Play account by a significant margin. To be more specific, we have dined out far more so far in 2023 than in other years. We have had three months where we spent over $1,000 on dining out! (On average, we usually spend around $350 on dining out per month)
While I know we’ve spent big money on a few occasions, like Kid T2.0’s birthday dinner with 15 people, a big dim sum lunch with 9 people, dinners a few times in Whistler with Mrs. T’s family, Mrs. T’s birthday lunch with 11 people, and celebrating our wedding anniversary, I was surprised to see that we spent over $1,000 on dining out for May.
Sure, we ate out multiple times during our recent 4-day trip in Calgary, but that was around $500 in total. I couldn’t explain how we spent the other $500.
I was frustrated and bummed out about spending so much money dining out yet again. For the life of me, I couldn’t figure out how we spent the other $500. I did recall having takeout sushi for about $120 but I couldn’t think of other dining-out occasions.
After going through the credit-card statements and spreadsheet, I realized we have had many smaller dining out expenses. $20 here and there, $30 here and there, and the amount quickly added up.
During this frustrated & annoyed state, the only thing I could think of was that we needed to take some extreme action.
“No dining out or take-outs for June!” I declared to Mrs. T.
“And what do you plan to spend our money on?” Mrs. T asked.
I couldn’t answer her question at all. All I could think of is that we need to reduce our spending, so we can save more. I think deep inside I was worried that we’d run out of money because of the increase in our overall expenses.
Save! Save! SAVE!
Unfortunately, my save, save, save, and save some more mentality was creeping in very quickly.
What the heck is going on here? Continue Reading…
