An Arbitrary Grading of Our 12+ Themes for 2025

Always a crowd favorite, our “12 Themes,” for the following year, debuted nearly three years ago. As in years past, we thought it would be fun to revisit the predictions and see how they turned out. With the benefit of hindsight, we’ve graded each theme (completely arbitrarily) based on its relevance and accuracy to what actually transpired.

Overall score for 2025 themes was a B. Despite the tariff uncertainty, lack of growth, high inflation and negative sentiment, the markets pulled ahead to likely end the year in positive territory. When markets become less focused on fundamentals, such as earnings growth, and more sentiment driven, they tend to be more volatile and news driven. It is critical for us to maintain our investment discipline during these times as they often come to a quick ending, and the market returns to high quality investments and a longer-term focus.

1. Be Part of the Energy

   Grade : B

   Although energy indexes were up over the year, they did lag their respective indices. Whereas commodity prices did very well this year, they were driven by gold and silver due to these asset classes having defensive characteristics and because of the continued debasement trade.

   
   

2. Own USD

   Grade: F

   Owning USD this year was not terrible, but weakened in comparison to the CAD over the course of the year. The prediction went in the opposite direction due to the boycott against the US market, USD and debasement theories.

3.   Winners Keep Winning (Relative)

Grade: A

True – the winners did keep winning but not until the second half of the year due to the AI trade that came in hot! The beginning of the year was not as certain, but the Mag 7 remain the stocks to own if you are looking for high revenue growth and free cash flow metrics like theirs.

4. Concentration Risk is Real but Not Necessary

Grade :C

Unfortunately, the breadth and participation of stocks driving market appreciation this year was driven by the Mag 7 until the last few months of the year where you have started to see an increase in breadth, but this year was driven on sentiment and dominant themes.

5.   Market Broadening

Grade C

I think you might have had FOMO if you didn’t have some exposure to the AI gains in the market this go around. The list above is a great list of high quality large cap names and some performed well this year but not all shot the lights out so hence the grade for this theme.

6.  Caution on U.S. BB rated Credit

Grade A

Bang on. Spreads were telling the story ahead of time. For the first 3 months of the year not only did uncertainty peak so did investor sentiment. Spreads widened just as predicted.

7.   Gold Will Outperform Emerging Market Equities in USD

Grade B

Gold outperformed emerging markets but emerging markets held their own this year as well. The weakening USD likely helped offset the weakness due to tariffs in emerging markets. Not entirely, but perhaps reduced the materiality of a true tariff.

8.  Potential for a Canadian Renaissance?

Grade B

We might not have seen a renaissance but we did elect a new leader within the same political party that has better global presence which has likely helped with cross border negotiations. Canada’s public markets did well this year due to a commodity boom in the second half of the year pushing up companies in mining and materials. But did our economy start to see improvements? We still have high tax rates, we still have high unemployment and a weak job market for new entrants, and we still have a weak GDP growth rate. 

9.  Continued Rise of Alternative ETF Strategies

Grade A

Alternatives are becoming increasingly key to diversifying a portfolio and there are a lot of different alternatives out there to choose from. Bitcoin, for example, has not had a great year. There is a consistent push to find assets to invest in that are not directly correlated to equity or fixed income. Liquidity in these types of alternatives remains critical.(not quite sure what you are saying here?).

10. The Trump Administration: A Staff Turnover Carousel

Grade B

Haven’t seen as much turnover this go around but there has been lots of noise around replacing the Fed Chair which is enough to suggest he can influence who is in what roles. We will also have the midterm elections and we would assume he will influence some of the key states elections.

11.  Should’ve Worked Harder on Throwing a Spiral

Grade A

Although a new record wasn’t reset in MBL this year, new records were set in the NHL by Kaprizov, the NFL by Allen and NBA by Gilgreous-Alexander.

12. Our Market Cycle Clock: Finally Ticking Forward

Grade C

If the tariffs hadn’t been as material an impact, we could have started to see growth pick up. However, the tariffs only impacted the rate of change in inflation from low to increasing for the first half of the year before it started to cool in the last third.