North American markets are currently firmly in the green (Dec 22 at 9am), marking a welcome bounce after a slower-than-usual start to the Santa Claus rally. This final stretch of the year is typically one of the strongest periods for markets, and it appears that seasonal pattern is once again asserting itself.

After a year marked by sharp swings, deep pullbacks, and no shortage of uncertainty, we’re now on track to finish the year with markets back near all-time highs. 

As 2025 winds down, it’s a natural time to step back from day-to-day headlines and reflect on how markets actually behaved versus how they were expected to behave.

In mid-March 2025, markets were under real pressure. Major indices were well off their highs, tariff headlines dominated the news, and recession was being treated as a near certainty. Investor sentiment deteriorated quickly, and policy decisions out of the U.S. added to a growing sense of instability.

It was in that environment—not at the start of the year and not during calm markets—that I laid out a set of what I called “bold predictions.” They were bold precisely because sentiment was so negative and because they ran counter to much of the prevailing narrative/headlines at the time.

As we approach year-end, I thought it would be useful to revisit those predictions and see how they actually played out. 

Tariffs: A Lot of Noise, Less Impact

The first prediction was that most tariff discussions would be resolved—or at least neutralised—by early June, with enough exemptions to allow Canada’s economy to manage the impact.

This came reasonably close to being true.

In March, any mention of tariffs involving the U.S., Canada, or China caused sharp market swings. By early June, that reaction largely disappeared. While announcements continued, markets often barely moved—or even responded positively—because investors no longer believed the threats would fully materialise. A pattern emerged where aggressive rhetoric was followed by reversals and carve-outs sometimes referred to as the “TACO trade” (Trump Always Chickens Out).

For Canada, while we technically don’t have a standalone trade deal, the number of exemptions and workarounds meant the real economic impact was far smaller than initially feared.

Inflation: The Boldest Call

The most controversial prediction was that tariffs would not lead to long-term inflation. At the time, the overwhelming consensus was that tariffs would push prices higher. I disagreed and argued they would be disinflationary over time.

This turned out to be one of the most accurate calls.

Inflation continued to decline, and central banks around the world—including in the U.S. and Canada—began cutting interest rates. Even Jerome Powell, Chair of the Federal Reserve and no ally of Donald Trump, acknowledged that tariffs did not have the inflationary impact many had expected.

It’s also worth clarifying a common misunderstanding. Falling inflation does not mean prices fall—it means the rate of increase slows to a more sustainable 2–3%. That’s exactly what we’ve seen. Housing prices have softened, services inflation has eased, energy prices are lower, and even food prices are now trending down.

In March, this outcome would have seemed as unbelievable given the tone of the headlines.

The U.S. Dollar and the Value of Diversification

Another prediction was that a gradually weakening U.S. dollar would allow Europe and China to pursue stimulus, leading to stronger performance in international and emerging markets after years of underperformance.

This played out very well.

European and emerging market equities have had strong years, reinforcing why diversification matters. While the U.S. dollar didn’t collapse, it trended lower against major currencies like the euro and yen—even if that wasn’t obvious to Canadians watching the Canadian dollar weaken at the same time.

International exposure was a meaningful contributor to the Foundation Wealth Equity pool’s strong performance this year.

New Highs After Peak Fear

I also predicted that the TSX, Dow, S&P 500, and Nasdaq would reach new all-time highs in the latter half of 2025. When this was written in March, markets were still falling and fear was widespread.

I didn’t time the bottom perfectly. Markets continued to decline into mid-April. But just weeks later, they reversed sharply and went on to post repeated new highs. So far this year, we’ve seen dozens of all-time highs across major indices.

It’s a reminder that the best buying opportunities often feel the worst in real time.

Trump’s “Evil Arc” — Still Developing

The final prediction was that early volatility and chaos would eventually give way to a pivot, where Trump would attempt to position himself as the stabiliser—despite being the source of much of the turmoil.

This one is still unfolding.

From an economic standpoint, I would argue that markets were driven less by President Trump and more by pragmatic influences around him, including Scott Bessent, alongside the powerful momentum of the AI trade. Trump’s approval numbers remain low, and prediction markets suggest that if midterms were held today, Democrats would regain control of Congress.

That said, incentives and political realities matter. With limited time before the midterms, it’s difficult to imagine a scenario where Trump doesn’t pull out all the stops to support markets and the broader economy in an effort to shore up voter support. This dynamic is likely to remain a key part of the market narrative into next year.

Being Bold — and Being Humble

There’s an old saying: fortune favors the bold. In markets, history shows that periods of extreme pessimism often create the best long-term opportunities. 

But being bold does not mean being reckless.

While many of my predictions ultimately played out, I don’t have a working crystal ball—and I never pretend to know exactly where market bottoms are. Short-term market outcomes are inherently uncertain, which is why conviction must always be paired with humility and sound risk management.

I did make some bold investment decisions to take advantage of market dislocations and oversold conditions, but I was careful not to overplay my hand—recognizing that even a high-conviction view can be wrong.

A good example of this is Bitcoin. While I didn’t make a formal prediction, if you had asked me in March, I would have expected Bitcoin—often described as digital gold—to be meaningfully higher by now, especially given how strong gold and gold miners have been this year. That didn’t happen. Bitcoin was doing well up until mid October (up about 25% for the year) but has struggled since then and is currently down roughly 10% year-to-date.

That doesn’t mean the opportunity is gone, but it does highlight why humility matters.

Portfolio construction matters more than any single view. In our Diversifier Pool, gold and gold-related equities carry roughly a 15% weighting and performed exceptionally well this year, while Bitcoin sits at about a 3.5% allocation—appropriate for something that remains volatile. Because of that balance, Bitcoin’s weakness did not materially impact overall performance.

That’s risk management in action.

Closing Thoughts and Holiday Wishes

The lesson from 2025 isn’t that predictions are easy—it’s that discipline, diversification, and the willingness to act when fear is high matter far more than reacting to headlines.

Being bold creates opportunity. Being humble preserves capital. Long-term success requires both.

As we head into the holiday season, I want to thank you for your continued trust and confidence. Our office will be closed starting December 24, and we’ll be back open on January 2. During this period, we will still be monitoring email, though responses may be slower than usual.

On behalf of our entire team, I wish you and your family a happy holiday season and all the best for the year ahead.

Sincerely,

Mark, Leanne, and James

 Book an appointment with Mark:  https://calendly.com/mark-ting

 Book an appointment with Leanne:  https://calendly.com/leanne-brothers

 Book an appointment with James:  https://calendly.com/james-pelmore

Foundation Wealth Partners LP is registered as a Portfolio Manager and Exempt Market Dealer in all Canadian provinces and the Yukon Territory. Certain statements in this email are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend on or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” intend,” “plan,” “believe,” “estimate” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained in this document are based upon what Foundation Wealth Partners believe to be reasonable assumptions, Foundation Wealth Partners cannot assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on the FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.