2025 Was Nut(s): A Canadian CIO's Review

Quick Overview

The year 2025 was turbulent for Canadian investors, marked by significant stock market volatility, the Canadian stock market underperforming the US market by nearly 5 percentage points annualized over five years, and a narrowing but still present wealth gap favoring homeowners over renters in major Canadian cities, while gold delivered strong returns that proved historical low expected returns wrong.

Key Points: The speaker, Ben Felix, reviewed the market events of 2025, noting that 2024's unexpected returns for stocks, gold, Bitcoin, and real estate were not what anyone predicted (0:37). The Canadian stock market (XIC:TO) underperformed the US market (XUU:TO) by 5 percentage points annualized over the five years ending December 31, 2024 (1:46). Despite recent declines, the 10-year average return for Canadian value and small-cap stocks (47.74% and 33.62% respectively as of Dec 17, 2025) still trailed the Canadian market index (39.46%) (5:40). The Canadian allocation in Dimensional funds was recently reduced to 27.5% (down from 32%) in anticipation of lower expected future returns, reflecting a more conservative stance (8:58). Gold had an incredible year, returning 57.53% in Canadian dollar terms through December 17, 2025, which contradicted historical data suggesting low expected returns for gold at current high valuations (9:36). The wealth gap between renters and owners in Canada remained favorable to owners, with the average Renter/Owner Net Worth Ratio across 12 cities at 0.99 (meaning owners were slightly better off) as of November 2025 (14:38). The video highlights that market concentration in the US (Top 7 stocks weighting) is at its highest level since 1927, though this high concentration has not historically predicted poor subsequent 10-year returns (16:09).

Context: The video serves as an annual review by Ben Felix, CIO and Portfolio Manager at PWL Capital, summarizing key financial and economic developments encountered in 2025, particularly focusing on Canadian market performance, the role of gold as a hedge, and the ongoing debate between renting and owning property in Canada. Felix uses recent data and academic research to challenge prevailing narratives about market concentration and asset class performance.