How Not To Screw Up Your Money in 2025
TLDR
Deep Dive
What significant political event occurred in Canada at the start of 2025?
Canadian Prime Minister Justin Trudeau announced his resignation as Liberal leader and requested the governor general to put parliament on hold until March 24th, 2025, to allow the Liberals time to choose a successor and avoid a non-confidence vote.
Why did Chrystia Freeland, Canada's finance minister, resign in December 2024?
Chrystia Freeland resigned due to concerns about the government's overspending and its lack of preparedness for Trump's tariff threats. Her resignation was seen as a significant blow to Trudeau's administration, especially as it occurred just before a major economic announcement.
What are some positive economic developments expected in 2025?
In 2025, the Bank of Canada is expected to continue cutting interest rates, potentially as low as 2%. Additionally, for the first time in history, renewable energy generation is set to surpass coal globally. Canada is also seeing a shift in small business ownership, with new rules making it easier for employees to buy out their companies, potentially leading to more worker control and profit-sharing.
What were the most popular investments among Wealthsimple clients in 2024?
The most popular investments among Wealthsimple clients in 2024 included NVIDIA (6% of all stock investments), VFV (a Canadian dollar-hedged version of the S&P 500), Tesla, and ETFs like XEQT and high-interest savings ETFs. Canadian stocks like Shopify and Bitcoin-related stocks also made the top 10.
What financial advice was shared for starting 2025 on the right foot?
Key financial advice included conducting a financial inventory to assess net worth, utilizing tax-advantaged accounts like RRSPs and TFSAs, and rebalancing investment portfolios to align with risk tolerance and long-term goals. The importance of early planning and taking advantage of employer-matched contributions was also emphasized.
What was the trend in investor behavior on the Wealthsimple platform in 2024?
Investors shifted significantly from cash into assets, driven by the stock market rally. This marked a reversal from 2022, when high interest rates led to a focus on cash and high-yield accounts. In 2024, the allure of higher returns in stocks, with some seeing 10-30% gains, overshadowed the appeal of lower-yielding cash accounts.
- Trudeau's resignation as Liberal leader
- Freeland's surprise resignation
- Political discord within the Liberal party
- Differing economic viewpoints on government spending and tariffs
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