Happy New Year and Welcome Back – Another great year is in the books and I look forward to a happy and healthy 2026.

 

A sincere thank you to every reader - from clients new and old, to colleagues and managers, to friends and family. I’m grateful to be surrounded by such an inspiring and supportive network.

 

Portfolios were up across the board, you referred us over a dozen new clients, and we’ve all survived another year where change is happening faster than we can keep up.

 

I look forward to this next trip around the sun, and grateful you’re part of it.

 

One week in to 2026, and this year is starting out like 2025.

 

POTUS press conference, geopolitical uncertainty spikes, Mr. Market rises in an everything goes up rally.

 

Apologies, but take a seat 2026 outlook – Trump. Again.

 

First - Ignore the immediate response. Maybe this leads to more oil production and lower oil prices down the road, maybe it takes years to happen, or maybe a resistance movement will emerge…Nobody knows.

 

Second – stay on track. 3 years of gains and all-time highs. These are the days to trim profits. Keep it balanced between safety and growth. It’s time to contribute to TFSA’s and RSP’s. Don’t pull the parachute and surrender to GIC’s that lose to taxes and inflation. Do buy your spouse and kids a nice dinner. World peace is not our objective, yours is.

 

• For a full recap on this weekend’s events, I highly recommend NYT’s The Daily
  • Inside the U.S. Operation to Oust Venezuela’s President - The New York Times
  • From President to Defendant: The Legal Case Against Maduro - The New York Times

 

New Year, whose this? Annual reminders and dates

• 2026 TFSA contribution limit is $7,000

• • Canadians who have never contributed to a TFSA and were born in 1991 or earlier would have a cumulative TFSA contribution limit of $109,000 as of Jan. 1, 2026
  • You can find your cumulative TFSA contribution limit on MyCRA
    • Beware – CRA does not update your account limit with the previous year’s contributions or withdrawals.
    • If you’re unsure – please reach out. You’re guilty until proven innocent with those people.

• RSP contribution deadline March 2, 2026
  • RSP 101 – the name of the game is tax deferral.
    • One of the objectives is to contribute to an RSP while working and being taxed in a higher tax bracket, and withdraw in retirement while in a lower tax bracket

• • Your contribution limit is 18% of your previous year’s earned income, up to a dollar limit of $32,490 for the 2025 tax year.
  • You can find your cumulative RSP contribution room on your 2024 NOA or access it online at MyCRA.

 

• Submit your Dog Photos for 2026
  • If you would like to see your pooch have 15 minutes of fame and be the face of this newsletter, submit your pictures with name and age.

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Portfolio Update – 2025 Review

• Our Balanced Model was +1.33% in December
• The Paper Portfolio is up to $1,178,901, +17.89% in 2025

I’ll be the first to say – I’d rather be lucky than good.

 

My approach to the paper portfolio was simple – try to avoid the losers, and let the winners take care of themselves.

 

In 2025, there weren’t many losers, and our winners really did take care of themselves. Here are a few reflections.

 

• • Utilities (+14%) benefited from both lower rates and AI demand. The sector didn’t outperform the TSX, but 2025 was one of the best years for utilities on record. If your defensive stocks are up 14%, you’re going to have a good time.
    • Good pick

 

• • REITs (+0.52%) were mixed. Residential (like CAR.UN, -13%) dragged as population declined. Senior living like Chartwell thrived, rallying 33%.
    • Bad pick. We didn’t get the umph we wanted. We didn’t expect Canada to experience its largest population decline on record in Q3. That’s just how she goes sometimes.

 

• • AI Infrastructure – the picks and shovels to ChatGPT and LLM’s. We liked nuclear as an option to meet the under supplied energy demand, and Copper miners to meet the need for electrification and move all that energy from A to B.
    • CCO +70%, BEP.UN+20%, ATRL +16%.
    • ARG +211%,
      • Good picks

 

• • Emerging Markets and AI catch up in China - The S&P500 had rocketed higher for two years, while EM had nosedived. We felt mean reversion was in order. A depreciating dollar was a helpful tailwind.
    • Mackenzie Emerging Markets Fund +30%, TCHI +33%, BABA +75%.
      • Good Picks

 

• • Gold – Central banks showed no slowing down in buying it, and hardly any retail owned it. We held Gold bullion and Gold miners…then the rest of the market caught wind
    • VALT +66%, DXAU +133%
      • Great picks

 

• • Asset Allocation – we were underweight equities all year relative to the benchmark. Hindsight is 2020, however we would have been better off to be overweight stocks. In the end, this didn’t stop our model portfolio from beating the benchmark. Asset Allocation was a slight drag, while security selection was a big gain.

 

Updating our format for 2026 – Starting this year, I’ll be rebranding the Balanced Model – Paper Portfolio to the Top & Tail Focus List. After seeking feedback of what elements we’re beneficial, using an absolute dollar value hasn’t been a value add. If I don’t illustrate and absolute dollar value, this is more of a focus list than a model portfolio.

Other than the name change, there won’t be many noticeable differences. Our reporting and emails will look very similar. Security selection, weightings, and performance will still be included. To facilitate this transition and start the year, our focus list will reflect the same positioning as the Paper portfolio as of Dec 31^st 2025.

 

Looking ahead for 2026 - This week, RBC Dominion Securities is hosting their annual Portfolio Management Conference.

 

For an investment nerd like me, I’ll be geeking out over the likes of investment gurus Howard Marks, Rick Rieder, Lori Calvasina, and Brian Belski.

 

I would be doing myself and all you readers a disservice if I sent out a note on 2026 Investment themes and outlook without taking their perspectives into consideration. We’ll be sending out a dedicated note next week.

 

As always, If you have any questions or comments – let me know!
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Much love to you and yours,
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Lucas