It's A Wrap

Happy 2025 Folks,

Well, that was a fun ride! We managed to beat all measured market indexes quite handily with our Managed Portfolios. This was our best year since I began discretionary trading fully in 2019 and I am glad you were able to also join us on this journey. My portfolio was up 31.84% and I know many of you nearly matched it or did better than me, if fully invested the full year. We are about 3-4% below our peak in December when I put the last email out suggesting a correction was needed. This on 2024 performance from CNBC:

Stocks fell in the final days of 2024, but the year still produced solid returns. The S&P500 surged 23% last year while the 30-stock Dow added nearly 13%. Fueled by the enthusiasm around artificial intelligence and interest rate cuts, the Nasdaq outperformed with a 29% advance.

And on the TSX here in Canada: TSX records biggest annual gain since 2021 | Reuters

On Switzer Financial’s journey: In September 2023 we happily joined iAPW with $205 million assets managed the day we made the transition. Today, that number is $331 million! Our team is very grateful (and humbled) by the referrals. Thank you all for all your support. I strongly believe that the friends and family referred are much more educated about what they own and why they own it where they do.

We have been very happy to sit down and help educate and implement all of you newer folks more about true risk (conservatism in overabundance), cash-flow, tax-efficiency, and portfolio drawdown techniques that we see so many other advisory teams not focus on. “Just fill out the Risk Tolerance Questionnaire please ma’am and then I will buy you the same thing I do for everyone else” … a balanced fund for your new son for an RESP not needed for 18 years! Or many of the older folks that sit in cash or GICs that will never need the money; who are they losing all the gains for by being less tolerant to risk? The bank or the family? If it’s in GICs, the bank can build leveraged mortgages around it, not so much if invested in equities. Whose best interest do they have at heart? I see so many glaring errors made by the advisors that investors trust, it is very frustrating but also very rewarding when we can help fix such poor management of generational wealth.

On to you and 2025! Predictions are not predictable. I do not like to prognosticate on what may or may not happen. Life throws us too many curveballs and that is what makes it so challenging and fun. As far as I know, not one firm/analyst predicted the S&P500 would post a 20%+ gain in 2024. If you would’ve told me we would have beat that by over 10% this year I would’ve suggested a good doctor to go see, lol.

That said, January will be tough. We did not have many losers in 2024 and lots of winners and thus could not take many capital losses in 2024. I also tried to keep the capital gains limited, but did rebalance as needed, so many firms may be selling more in January to delay profits/capital gains for another year.

Then we have Trump 2.0 coming into power on January 20. The first year of a term is usually positive for markets. I believe we can possibly see that scenario if trade wars and tariff negotiations don’t cause a broader panic. We know protectionism and immigration are big news items.

There will be many good and bad things forecast to come for investors to digest from tax cuts to tariffs. We will move assets as we see fit. I do not own any Emerging markets. Apple, Nvidia, Lulu, Meta, etc., offer enough exposure to global markets. Once bitten, twice shy.

That said, China is very aware of their economic plight and just announced they want to re-ignite growth but also reassert their significance in Taiwan. This is an example of the dichotomies we will face along with terrorism, with a tragedy already in New Orleans, amongst many other hurdles.

What positives do I see? There is a massive need for more energy to fuel our world. FYI, it takes 10x more power to do an enquiry on ChatGPT than on Google. Wow.

I believe the need for energy for our continuing evolution in AI, crypto, EV’s, population growth is very concerning, and possibly also a great investment theme. Here in Alberta this is being proposed: Kevin O'Leary to build world's largest data centre in Alberta

Aligned with this energy theme, we have moved to a bit more natural gas with Peyto on profits from PPL and ENB.

Infrastructure around energy like Capital Power and Brookfield Infrastructure still look attractive. Nuclear is about to arise again, I am watching for an entry to stocks with a nuclear theme like Aecon. We did very well on it and still own some but took profits twice in 2024.

Artificial Intelligence (AI) is here to stay. Many tech holdings we have are investing heavily here. A newer player I really like is Celestica (where our 2nd Aecon profit take was moved to). I believe they can continue to grow in 2025 as well or better than the great performance we achieved on our late year entry point.

Innovation around these themes excites me, but they need to have a good history. We will not gamble on gimmicks or unproven technology.

I look forward to following all the events 2025 brings us and navigating you through the markets and your personal needs. As always, please contact us if something changes with your plans, health, or any other obstacles you may face. We are here to help.

Cheers,

Steve

This information has been prepared by Steve Switzer who is a Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.