26 investing and personal finance thoughts for what’s to come in ’26
December 29, 2025
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What’s the outlook for interest rates, international trade, and the Blue Jays
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Investor returns were very positive in 2025, whether in stocks, bonds or preferred shares, despite tariffs putting a major fright into the global economy. There were still pockets of poor performance — real estate and energy were two big ones — but overall it was a confounding but good year.
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Here are 26 thoughts on what we may see in 2026.
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The Canadian dollar will be stronger: From mid-2015 to the fall of 2024, the Canadian dollar was worth between 73 cents U.S. and 78 cents U.S. In the past year, the dollar has mostly traded several cents lower. We think it will head back to the nine-year trading range for the next while, starting in 2026.
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The U.S. stock markets will underperform global markets: This already happened in 2025. The S&P 500 weighted index price-to-earnings ratio is 30.8. The Nasdaq is 40.2. In comparison, the S&P/TSX capped composite is at 22.8 and the non-North American EAFE index is at 18.3. Over time, these numbers will get closer, and one of the ways is that global markets will outperform the U.S.
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Short-term interest rates won’t get much lower in Canada: The Bank of Canada lowered rates by one percentage point in 2025 to 2.25 per cent. Over the past four years, rates have gone from 0.25 per cent to five per cent to 2.25 per cent. The 0.25 per cent rate was exceptionally low post-pandemic, and we remain a little concerned about inflation, so we don’t see the Bank of Canada lowering much more. Maybe a quarter point lower.
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Short-term interest rates in the U.S. will get lower: Similarly, the United States Federal Reserve rate went from 0.25 per cent post-pandemic to 5.5 per cent, and is now at 3.75 per cent. U.S. inflation will remain an issue, but the U.S. has been slower than Canada to drop rates and we expect to see 0.5 per cent to one per cent declines in short rates in the U.S. this year.
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U.S. 10-year yields will drop a little but remain stubbornly high: The key U.S. 10-year yield is set by the market and not the Fed. The market never lies. The 10-year yield has been in the low four per cent range for much of the past three years. While we could see a 0.25 per cent to 0.5 per cent decline year over year, the market is telling us the 10-year yield won’t drop much.
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Gold and silver may have peaked: Gold has more than doubled in price over the past two years, the fastest doubling in gold price over the past 40 years. Silver has had a more volatile history, but it’s still had a very significant run-up in price during the past two years. The geopolitical world has shifted, but is it going to shift dramatically further in 2026? The risks of a meaningful decline are significantly higher when precious metals spike like they have.
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AI is the future, but AI stocks will likely fall: Artificial intelligence is here to stay. The investment question is whether the sizable growth built into stock valuations will be achieved or not. There will be a slowing in big corporate spending versus what is projected today, which could hurt all the AI stocks, but mostly those that don’t have as solid an earnings base yet. Nvidia Corp. won’t be immune, but it is now one of the better-valued names in the space.
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The Toronto and Vancouver condominium market will get worse: Many individual condo investors still really want to get out. They will either get tired of waiting or will be squeezed by their personal situations. More selling pressure equals lower prices.
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The Toronto and Vancouver single-home market will get better: Prices will rise in 2026. One of the main reasons is that you can now get a five-year variable mortgage for as low as 3.6 per cent and a fixed mortgage for less than four per cent. At those borrowing costs and with several policies making it easier for first-time homebuyers to get into the market, expect some gains in Toronto and Vancouver.
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The Toronto Blue Jays will not win the World Series: This is for the betting crowd, but remember there are 30 teams and only one will win. Also, 2025 was a pretty magical season where an awful lot went right. The Blue Jays are a great team, but I am not convinced they are as great as they looked in late 2025.
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The price of oil will stay neutral to negative: Since reaching peaks of US$120 a barrel in the first half of 2022, it has been in decline to the current US$56. There has been a global political move away from clean energy at any cost, and you might think this would be supportive of oil prices, but the flip side is that it is easier for drillers to drill and for supply to rise. Oil will likely remain in the US$50-to-US$60 range for much of the year.
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Mortgage rates won’t go much lower: Mortgage rates in the range of 3.5 per cent to four per cent are likely where they will stay. Maybe 3.25 per cent on variable rates, but not likely any lower than 3.75 per cent on a five-year fixed rate. Most of the rate declines are now booked in.
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CUSMA battles will be big news and it won’t be great for Canada: The Canada-U.S.-Mexico Agreement isn’t set to expire until 2036, but there is a joint review planned for 2026 that gives all parties the chance to negotiate modifications and vote on whether to extend the agreement further. This is a big window for the U.S. We expect Canada will be spending much of the discussions trying desperately to keep things the same, but we won’t be fully successful.
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Dairy will go sour: Long a sore spot for the U.S. and President Donald Trump, dairy protectionism in Canada doesn’t have four legs to stand on. It will get churned relentlessly, so don’t be surprised if the lactose-intolerant crowd in Canada will soon have to watch out for both Canadian and increasingly foreign dairy products.
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Core bond investment returns will be low but positive: Bond investors are not getting paid a lot for increasing risk. This will change, but, as a result, we are playing bonds pretty safe for now. However, a weak stock market is usually good for bonds. Low returns are better than no returns.
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Stock index returns could very well be negative: History tells us that stock markets are negative roughly three years out of 10. U.S. markets are also often weak in the year leading to midterm elections. Don’t be surprised by market losses.
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Canadian immigration will slow, but remain historically high: The permanent resident immigration target was 395,000 for 2025, but is closer to 445,000 when including those already in Canada. There will be pressure to lower these targets. The numbers are still very high historically, but declining.
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Preferred share returns will slow as common shares pull back: Preferred shares are up 17 per cent over the past year. While they should be lower risk, they have moved a lot like common stocks. We are a little worried about some pullback in 2026.
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Political fears keep federal and provincial taxes in check: With a top tax bracket of more than 53 per cent for most Canadians and successful fights against capital gains increases, we don’t expect to see tax increases at the federal or provincial level in 2026.
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Municipal taxes are a bottomless pit of increases: Somehow, if the federal and provincial governments give less to municipalities, there is no ability to cut back on government expenses or services. The only solution is to raise taxes. Property taxes, land transfer taxes and anything else municipal governments can think of will continue to rise.
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Alternative investments continue to emerge and provide targeted solutions: Some alternatives will hold appeal in a world with weaker stock returns. Higher-end student housing, music royalties and contingency law firm funding have been strong performers, and ones we are open to doing more with in 2026.
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Tax minimization through flow-through shares: We thought this would get hit in the Justin Trudeau years, and it did a little with alternative minimum tax limits. But with the expansion into critical minerals and the strong metals market, any Canadian with taxable income of more than $300,000 should probably look at this in 2026.
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Tax minimization through corporate life insurance: This is a tax strategy that is extremely powerful for estate planning and can also be powerful for those with parents in their 70s. We don’t see tax laws changing on life insurance owned by corporations — at least for the time being.
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Cryptocurrency will exist: We can’t independently value it — the rules of engagement are outside our experience — and we accept that this may never change. We can own it for clients, but we simply don’t have an opinion on whether it is a good or bad thing to invest in.
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Value investing will beat growth investing: In 13 of the past 16 years, the Vanguard Growth ETF has outperformed the Vanguard Value ETF. With the price-to-earnings multiple now almost double for growth over value, it is time for value to make a comeback in 2026.
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Human nature won’t change in 2026: Greed and fear will remain the two most important human characteristics in making money in investing. As Warren Buffett said, “Be fearful when others are greedy, and greedy when others are fearful,” Today, we are a little fearful.
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Ted Rechtshaffen, MBA, CFP, CIM, is president, portfolio manager and financial planner at TriDelta Private Wealth, a boutique wealth management firm focusing on investment counselling and high-net-worth financial planning. You can contact him through www.tridelta.ca.
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