Good mornin’

I hope the year has started on a bright note and those New Year’s resolutions are still going strong!

As we settle into a new year, it’s a great time to reflect on what we want life to look like……not just this year, but in 2025 and beyond.

How can we ensure we’re on an intentional path? And how might principles of investing — intention, balance, and discipline — apply to our personal growth?

Over the holidays, I had the chance to unwind with family in Mexico. Nothing quite says “ringing in the new year” like a few days on the beach, surrounded by the chaos of Nickelodeon Resort with the Ninja Turtles and Paw Patrol. It was a refreshing reset before diving back into the whirlwind of markets and politics.

Speaking of which, for those of you in the LA region, my thoughts are with you as you navigate the aftermath of recent devastation. Stay safe out there.

On the market front, stocks wrapped up a strong year on a quieter note as investors recalibrated expectations for future interest rate cuts by the U.S. Federal Reserve….a shift has driven government bond yields higher in recent weeks and we are seeing yield up again this morning.

In the spirit of the Ninja Turtles and one of their favorite words – excellent - I’ve put together a few thoughts on the Pursuit of Excellence below, and how we should be approaching those resolutions we all set for the year ahead. But before I share some insight, I thought it worth sharing a quick update on what’s been happening in Canada and the U.S. 

And now…to the Markets

The Federal Reserve cut rates in mid-December, as expected, despite signs of stubborn inflation. However, Fed Chair Jerome Powell struck a cautious tone, suggesting the pace of future cuts may slow. Policymakers now anticipate just a 0.5% reduction in 2025—half of what was previously projected—while raising their inflation forecast.

Closer to home, the Bank of Canada (BoC) has also signaled a more measured approach to rate cuts. Markets are pricing in 0.50% to 0.75% in reductions this year, but the BoC may feel pressured to go further to avoid undershooting its 2% inflation target. We’ve seen a sluggish Canadian economy, and that’s been contributing to lower bond yields compared to the U.S. and a weaker Canadian dollar, as global funds flow toward higher-yielding currencies.

Meanwhile, we saw Canadian Prime Minister Justin Trudeau announce his resignation, a move I’d suggest was somewhat expected given months of poor polling and mounting pressure. His departure introduces political uncertainty at a critical time, especially with the threat of U.S. tariffs looming. Trudeau will remain in office until his successor is chosen, but the leadership vacuum could complicate negotiations, further weighing on the Canadian dollar.

While all of these developments may not inspire confidence heading into 2025, it’s worth noting that Canadian equities have become less dependent on domestic politics or economics. Last year, the market surged nearly 20% despite existing fractures, driven instead by falling interest rates, declining inflation, and strong U.S. growth, which benefits many Canadian businesses tied to the U.S. economy.

Looking ahead, I do expect continued pessimism about Canada’s near-term prospects, lower interest rates here in Canada will continue to fuel optimism for better economic and earnings growth later this year. In contrast, the U.S. outlook remains positive, with expectations of continued expansion, regulatory tailwinds, and limited rate cuts. However, these sentiments are already priced into markets. What will drive future movements is any shift in the outlook—for better or worse. It’s important to always remember --- there’s opportunity amid uncertainty.

As we navigate these markets, the principles of intention, balance, and discipline remain crucial—not just in investing, but in how we live our lives. Let me explain.

The Pursuit of Excellence 

Aristotle once said, “Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.”

This idea—that we are defined by our repeated actions—is profound. It’s not about your goals, dreams, or plans, but about what we do consistently. If you want to be a writer, you must write regularly. If you want to be healthier, you must consistently eat well and exercise. Excellence isn’t a one-time achievement; it’s the result of daily habits.

Applying the principles of intention, balance, and discipline to our lives can unlock true wealth—not just financially, but in how we grow and thrive. Intention sets the direction, balance ensures we don’t overextend ourselves, and discipline keeps us on track.

This is especially relevant in personal development. Change doesn’t come from desire alone; it comes from consistent action. Want to be more empathetic? Practice empathy daily. Want to excel in your career? Continuously learn, take on challenges, and seek feedback.

In today’s world, this applies to everything—health, relationships, and professional growth. It’s a reminder that we’re not defined by what we say we’ll do, but by what we actually do. Every day is an opportunity to shape who we are and who we’ll become.

So, as we move into the new year, here’s a thought: What if lasting transformation isn’t about summoning more motivation, but about understanding the hidden dependencies that hold us back?

Dr. Rangan Chatterjee, a leading physician and host of the podcast “Feel Better, Live More,” argues that sustainable change requires more than willpower. In his book *Make Change That Lasts*, he introduces the concept of “minimal reliance,” a framework that challenges conventional wisdom about behavior change.

Chatterjee believes that our reliance on comfort, certainty, and being right often hinders authentic growth. True transformation, he says, comes from embracing discomfort and redesigning our environment to support small, consistent actions.

As we cruise into a new year, this idea resonates deeply. Change isn’t about controlling our surroundings but transforming our relationship with discomfort. It’s about reclaiming action—one intentional step at a time. Like training a muscle, our ability to grow comes not from avoiding challenges, but from learning to coexist with them.

As we head into the week, and the new year, let’s reflect on the words of poet David Whyte: “Start right now. Take a small step you can call your own. Don’t follow someone else’s heroics.”

“A master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing. To him he is always doing both.” - Lawrence Pearsall Jacks

Here’s to a year of intentional action, balance, and discipline—both in the markets and in life.

Be well and enjoy the moments.

Derek Henderson