The Year of Resilience:
What 2025 Has Taught Us (So Far)
In today’s email:
- The CRA is a mess, but what does this have to do with TFSAs?
- We’re half way through 2025 and despite war, tariffs, and economic noise, markets have stayed surprisingly resilient.
- Headlines, over time, have influenced markets, but by how much?
- It’s been a bumpy first half, so how do we get great results, but without the headaches?
- What would a full-out war in the Middle East mean for oil prices?
Beyond the Portfolio
At Cherry Hill Private Wealth, we take a disciplined, client-first approach to every investment decision—including registered accounts like RRSPs and TFSAs. Before allocating funds to these accounts, we always verify contribution room directly with the CRA to ensure we stay within each client’s allowable limits. Over contributing can lead to penalties and unnecessary administrative headaches, and we’re committed to helping our clients avoid those pitfalls.
That’s why we’ve been keeping a close eye on a recent issue: TFSA contribution information, which is normally updated by CRA each April, is still unavailable this year. We’re now receiving system alerts indicating that this data is not currently accessible. Until that information is updated, we are unable to confirm contribution room with certainty. While this delay is out of our control, we want to assure you that we’re monitoring it closely and will continue checking back regularly. We are being very cautious with contributions to TFSAs right now, especially those that could be close to the limit. This is just one of the ways we prioritize accuracy, compliance, and peace of mind in managing your financial future.
The Scoop
It’s hard to believe we’re already at the halfway mark of 2025. And if you’ve been following the headlines, it might feel like we’ve spent the last six months veering from one crisis to the next—tariffs, global slowdowns, economic contraction, credit downgrades, and intensifying conflicts overseas. But here’s the thing: despite all of that, markets have remained surprisingly resilient. This year is proving once again that staying calm, staying invested, and staying diversified continues to be a winning strategy.
Let’s take a look at what’s happened so far and what we’re watching as we head into the second half of the year.
The start of 2025 brought a fresh round of market anxiety. Trade tensions escalated, with renewed tariffs between the U.S. and China sparking fears about inflation and global supply chain instability. At the same time, the World Bank downgraded its global growth forecast, citing continued weakness across key economies. The U.S. economy posted a mild contraction in Q1, shrinking at a -0.3% annualized rate—a reminder that even the world’s largest economy isn’t immune to global uncertainty. And just as markets began digesting that, Moody’s downgraded the U.S. credit rating, rattling bond markets and fuelling investor concerns.
Geopolitically, the backdrop remained challenging. The war in Ukraine intensified, with Russia pushing deeper into eastern territories and triggering new rounds of Western sanctions. In the Middle East, tensions surged as oil-producing nations contended with both internal instability and renewed cross-border conflict, which briefly drove oil prices higher and added volatility to energy markets.
And yet, despite this series of troubling developments, markets showed resilience. Major equity indices managed to grind higher through much of the first half of the year. Growth sectors, particularly in technology and AI infrastructure, continued to lead, while more defensive and income-generating areas—like private credit and infrastructure—provided the kind of consistency we aim for in uncertain times.
At Cherry Hill, our portfolios are built to navigate exactly this kind of environment. We don’t react to every headline—we position for the long term. That means diversifying across public and private markets, building in downside protection, and staying flexible as conditions evolve. Our allocations to private credit and alternative income strategies have continued to deliver in the face of volatility, while our selective equity exposure has captured gains from strength in tech and industrials.
Looking ahead, we’re monitoring several key themes for the second half of 2025. Central bank policy remains front and center, as both the Bank of Canada and the Federal Reserve weigh the pace and depth of future rate cuts. Inflation continues to moderate, but it’s not yet a done deal. Labour market data has started to soften, and we’ll be watching closely to see how that affects consumer spending and broader economic momentum. We’re also keeping a close eye on commodity markets, particularly energy and agriculture, which could be influenced by ongoing geopolitical instability and weather-related disruptions.
Meanwhile, we continue to watch the tech sector carefully. The excitement around artificial intelligence and automation hasn’t faded—but expectations are high, and earnings will need to deliver to justify current valuations.
To help put the headlines in perspective, we’ve included a visual that shows how the markets have moved alongside some of the most notable news stories over time. It’s a helpful reminder that markets often move on fundamentals, not fear.
If you’ve felt overwhelmed by the news cycle, you’re not alone. But it’s in times like these that disciplined, long-term investing really shows its strength. If you’d like to revisit your plan, talk through any of these themes, or just reconnect on your goals for the rest of the year, we’re always here to help.
Market Minute
This past week, markets showed modest declines amid geopolitical tensions in the Middle East and rising oil prices. The S&P 500 slipped about 0.4%, while Canada’s TSX eked out a slight gain, up 0.6%—on track for a ~7% YTD return.
North American Markets:
Equities faced pressure as Israel’s strikes on Iran escalated Middle East tensions, triggering a 1.1% drop in the S&P 500 and a more modest 0.5% decline in the TSX, while oil surged ~8%. Despite the volatility, bond markets remained stable—10-year U.S. Treasury yields hovered around 4.36%, and Canada’s 10-year bond stood at 3.33%.
Global Markets:
Outside North America, many international markets cooled slightly after a strong rebound—global equities had rallied ~20% off their early April lows, yet now tread cautiously amid conflict and interest-rate uncertainty.
Commodities & Bonds
Oil prices spiked on Middle East developments, lifting energy stocks but pressuring broader sentiment. Meanwhile, inflation data remains soft: May’s PPI rose just 0.1%, with core PPI at 3.0% YoY. U.S. CPI reported +0.1% month-over-month and +2.4% year-over-year, reaffirming the easing trend and reinforcing expectations of 1–2 interest-rate cuts later this year.
Trends to Watch This Week:
As we head into the second half of 2025, the following developments are on our radar:
- Geopolitical Risk: Ongoing tensions in the Middle East could inject further volatility, though prior shocks have typically been short-lived.
- Trade Policy: The 90-day pause on tariffs with China and others expires in July, which could reintroduce trade-driven market fluctuations.
- Monetary Policy: The Fed and Bank of Canada appear poised to support easing later in 2025. Futures markets currently anticipate two U.S. rate cuts in the second half of the year (September and December) .
Summary:
While geopolitical risks and trade uncertainties persist, underlying economic data and central-bank policy signals support continued market resilience. If you’d like to explore how these insights fit into your portfolio, don’t hesitate to reach out.
Final Thought
It’s been a busy start to the year and there is nothing to suggest that it might be slowing down. It’s easy to get caught up in every news story or headline, but what we’ve seen lately (and what history suggests) is that good companies will continue to increase in value. If you are nervous, we’re here to talk and do have several options outside of the public market space, which could help put your mind at ease.
Until next time, stay informed and strategically invested!
Trevor
