A turbulent year, but a very positive one for investors
The year 2025 surprised many observers. Despite numerous concerns at the beginning of the year, financial markets delivered strong returns, far exceeding expectations. Investors had to navigate several periods of uncertainty, but the overall trend remained positive.
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Strong gains across equity markets
Equity markets around the world ended the year higher. In North America, several major indices even reached record highs toward the end of December.
The Canadian market stood out in 2025, outperforming several major U.S. markets, largely due to the strong performance of three key sectors:
Materials (mining, metals, etc.),
Financial services (banks, insurance companies),
Energy.
Together, these sectors represent a significant portion of the Canadian market and contributed substantially to the year’s gains.
In the United States, Europe, and Asia, markets also advanced, supported by:
strong corporate earnings,
an economy that proved more resilient than expected,
and growing interest in technologies related to artificial intelligence.
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Bonds and commodities
Bonds, often considered more conservative than equities, also generated positive returns in 2025. This was largely due to interest rate cuts implemented by central banks in both the United States and Canada.
In the commodities space:
gold and silver reached record levels, as many investors turned to them as safe havens during periods of uncertainty;
copper posted gains;
in contrast, oil prices declined over the course of the year.
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A very eventful political and economic environment
The year 2025 was also marked by several major political developments.
In the United States, Donald Trump’s return to the presidency quickly reignited trade tensions, particularly through the introduction of new tariffs on a wide range of imported goods. These announcements triggered sharp but temporary market declines in the spring.
In Canada, a change in government took place early in the year. The Canadian economy showed signs of slowing, including:
a rise in the unemployment rate,
weaker household consumption,
and slower business investment.
Despite these challenges, many Canadian companies adapted by finding new export markets outside the United States.
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The key role of central banks
In 2025, central banks played a central role in supporting the economy.
Both the U.S. Federal Reserve and the Bank of Canada cut interest rates several times.
These cuts were intended to stimulate economic activity while keeping inflation under control.
Although inflation was significantly lower than in previous years, it remained a concern, particularly with respect to housing and food costs.
Central banks also closely monitored developments in the labour market, both in Canada and in the United States.
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Why did markets perform well despite the uncertainty?
Despite all these uncertainties, markets finished the year on a strong note for several reasons:
companies continued to generate solid profits;
the global economy proved resilient;
investors looked beyond short-term negative headlines;
and lower interest rates made investments more attractive.
This highlights an important principle in finance: markets dislike uncertainty, but they ultimately tend to focus on long-term fundamentals.
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Looking ahead
The year 2026 is shaping up to be more uncertain. Several key issues will be worth monitoring:
the review of the trade agreement between Canada, the United States, and Mexico;
the evolution of U.S. trade policies;
large-scale investments related to artificial intelligence;
and developments in employment and inflation.
In this environment, diversification, discipline, and a long-term perspective remain essential for navigating the markets.
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Conclusion
Despite a year filled with economic and political challenges, 2025 turned out to be a very good year for investors. It serves as a reminder that staying invested, maintaining proper diversification, and avoiding emotion-driven decisions are often key to long-term investment success.
