Monthly Market and Portfolio Review
The markets weren’t quite as strong as I’d hoped for December. The more traditional, value-oriented Toronto Stock Exchange Composite Index (TSX) and the Dow Jones Industrial Average (DJIA) both extended their monthly winning streaks. For the TSX it was the longest monthly winning streak since 2014, and it was the longest streak since 2017 for the DJIA, impressive runs when you step back. Meanwhile, the more growth-oriented Nasdaq Composite (Nasdaq) and the S&P 500 (S&P), started slow, rallied, and faded towards the end of the month.
December’s market action largely came down to two forces: where interest rates are headed and where investors chose to take profits after a very strong year for big technology companies once again.
The first – and most important – driver was interest rate expectations. By December, markets had already adjusted to rates coming down in 2025, and attention shifted to how aggressive the Federal Reserve (Fed) might be in 2026. Cooling inflation data and signs of a slowing, but still resilient, economy reinforced the idea that borrowing costs were easing rather than tightening. That helped lift stocks across the board, especially companies that benefit from lower financing costs and steadier growth. It kept the S&P and the DJIA near their highs, even as gains faded late in the month and holiday trading volumes thinned out.
The second theme was investors locking in gains and rotating out of technology into parts of the market that had been left behind. After a powerful run driven by AI, semiconductors, and mega-cap technology companies, many technology stocks looked expensive compared to the rest of the market. In December, investors took profits and shifted money toward sectors that appeared cheaper and offered more room to grow. That weighed on the Nasdaq at times, even though lower interest rates are generally good news for growth stocks. This appears to be just a case of normal rebalancing after an outsized run.
In Canada, the TSX followed a slightly different path, shaped mainly by commodity price swings and year-end profit-taking, with lighter holiday trading amplifying both. After a massive 2025 that saw the S&P/TSX Composite rise close to 30%, December felt more like a pause than a fresh push higher. Record highs earlier in the month highlighted how strong the year had been, and commodity prices were a major driver of the index. Canada’s market tends to live and breathe oil, gas, and metals, putting mining and energy stocks front and centre. Precious metals, especially gold and silver, helped lift the TSX earlier in the month, and because these sectors make up such a large portion of the TSX, even small price moves had an outsized impact. Firmer metals prices later in December sparked a brief rebound in mining shares, though momentum slowed as gains were locked in.
After such a strong year, investors trimmed positions, and with many investors away for the holidays, lower volumes made the TSX more sensitive to sector moves and commodity price swings. That nudged the index off its highs in the final sessions as basic materials (mining companies) and energy companies consolidated gains and technology stocks remained under pressure.
In a nutshell, December felt like a microcosm of the year for the TSX: commodities and resource stocks did most of the heavy lifting, but seasonal slowing and profit-taking capped gains as 2025 wrapped up. In the US, markets took a breather after a very strong run. Lower interest rate expectations helped keep the S&P and DJIA near their highs, even as late-month selling pushed the S&P and Nasdaq into modest losses. Rotation out of heavyweight technology companies and light holiday trading limited upside, resulting in a calm, orderly finish to the year. It wasn’t a flashy ending, but all the major indexes closed out 2025 on solid footing.
| Portfolio | Monthly Streak | |
| Portfolio 1: | 2 – month losing streak | |
| Portfolio 2: | 9 – month winning streak | |
| Portfolio 3: | 1 – month winning streak |
I had hoped for a big Santa Claus rally in December, but the month turned out mixed across my portfolios. Portfolio 2 exceeded expectations, Portfolio 3 was solid but could’ve done better, and Portfolio 1 was quite disappointing. Clearly, Santa wasn’t equally generous this year.
Portfolio 1 finished down 1.0%, as two weak weeks – including a 1.9% drop mid-month and a 0.9% decline in the final week – outweighed modest gains elsewhere during the month. Volatility in AI-related stocks drove most of the swings, with selloffs in some of the portfolio’s largest positions limiting upside. Still, several core holdings hit new all-time highs, and the month felt more like a period of consolidation than a breakdown.
Portfolio 2 was the star of the month, rising 2.9% with gains in each of the first four weeks before slipping slightly at the end. Strong, stock-specific wins powered the move, including a 26% surge in MongoDB and fresh highs for Aritzia (TSE: ATZ), Dollarama (TSE: DOL), and Bank of Nova Scotia (TSE: BNS). Even when fewer holdings advanced, the portfolio steadily moved higher, making December a strong finish overall.
Portfolio 3 ended slightly lower, with performance largely shaped by its two largest holdings, Nvidia (NASD: NVDA) and Shopify (TSE: SHOP), which make up over half the portfolio. Weeks when both climbed helped offset losses elsewhere, while a mid-month dip in Nvidia and Vertiv Holdings (NYSE: VRT) weighed on overall returns. Canadian banks provided occasional support, but December highlighted the portfolio’s sensitivity to key positions Nvidia and Shopify.
December ended on a mixed note for the portfolios. Portfolio 2 stole the spotlight, Portfolio 3 held its own, and Portfolio 1 felt the weight of AI volatility. The month may have been uneven, but it didn’t erase the strong gains accumulated throughout the year – leaving us investors heading into 2026 with plenty of opportunities in what’s likely to be another volatile year. 😊
Fourth Quarter
The fourth quarter was a mixed period for my portfolios. As shown in Chart 2 below, Portfolio 2 was the only one to finish higher, posting an impressive 9.2% gain and outperforming all four major indexes. Portfolios 1 and 3 both ended the quarter lower, taking some of the momentum out of what had started as a strong stretch. Portfolio 1 declined 2.0%, while Portfolio 3 slipped 0.3%, as concerns around stretched valuations in AI-related stocks weighed on several holdings.
The broader markets moved higher at a more measured pace, with Canada once again standing out. The TSX rose 5.6% as higher gold and silver prices lifted the resource-heavy index and extended its quarterly winning streak to five straight quarters. Strength in precious metals and energy – sectors that make up a large share of the TSX – provided steady support throughout the quarter, even as lighter year-end trading volumes kept market moves in check. In the US, gains were more modest but still positive, with the S&P up 2.3%, the DJIA climbing 3.6%, and the Nasdaq adding 2.6%.
Both the S&P and the DJIA reached all-time highs late in the quarter, reflecting broad strength across large, established companies. Optimism around AI, resilient corporate earnings, and growing expectations for lower interest rates helped support markets, even as momentum slowed toward year-end.
Twelve Months
To wrap things up, 2025 turned out to be quite the rollercoaster ride, especially in April, when President Trump upended the global trading system and rattled markets. Even so, as you can see in Chart 3 below, all three portfolios and the major indexes still managed to post impressive gains by year-end.
For the full year, Portfolio 1 posted an impressive 25.0% gain. However, that was eclipsed by Portfolio 2’s 25.9% increase in value. At the start of November, Portfolio 1 looked certain to retain its first place standing but two consecutive losing months saw it drop in value, while Portfolio 2 stretched its monthly winning streak to nine months, including minor gains in a tough April and November, was enough for Portfolio 2 to snatch the number 1 position this year. Portfolio 3 slipped into third, gaining 19.9% for the year after being weighed down by a weak November.
Portfolio 1 had a tough act to follow after riding the Nvidia and artificial intelligence (AI) wave to gains of 61.9% in 2024 and 32.9% in 2023. 😊 Portfolio 2 rebounded nicely after a modest 4.5% gain in 2024, though it came in just below its 28.9% return in 2023. Meanwhile, Portfolio 3 has been on a gradual downward trend over the past three years – from 33.4% in 2023, to 24.3% in 2024, and 21.5% in 2025.
Stepping back to the broader markets, the TSX clearly stole the show in 2025. The index surged 28.2%, making it the top-performing major index of the year. The Nasdaq followed with a 20.4% gain, driven by investors’ continued enthusiasm for AI-related companies – marking the third straight year the Nasdaq delivered gains over 20%. The S&P also received help from strength in technology, rising 16.4%, while the more traditional DJIA posted a still-respectable 13.0% gain.
All that said, I’m very happy with the overall results. Any portfolio growing by around 20% in a single year is doing a lot of things right. At that pace, each portfolio would more than double in value in roughly four years. If I can reverse the downward trend in Portfolio 3 in 2026 while keeping the other two above the 20% mark, I’ll be very happy, very happy indeed. 😊
What My Three Portfolios Did in December
Portfolio 1 for December 2025: DOWN 
Activity
No significant activity to report this month.
Dividends Received this month:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Cameco (TSE: CCO)
BSR Real Estate Investment Trust (TSE: HOM.U)
Yellow Pages (TSE: Y)
Hammond Power Solutions (TSE: HPS.A)
Decisive Dividend Corp (TSE: DE) DRIP
Dream Industrial Real Estate Investment Trust (TSE: DIR.UN) DRIP
CN Rail (TSE: CNR)
Tourmaline Oil Corp (TSE: TOU)
US $
Visa (NYSE: V)
Interactive Brokers (NASD: IBKR)
Alphabet (NASD: GOOGL)
Home Depot (NYSE: HD)
Nvidia (NASD: NVDA)
Quarterly Reports
Bank of Nova Scotia
Fourth quarter 2025 financial results on December 2, 2025
CrowdStrike Holdings, Inc.
Third quarter 2026 financial results on December 2, 2025
TD Bank Group
Fourth quarter 2025 financial results on December 4, 2025
Costco Wholesale Corporation
First quarter 2026 financial results on December 11, 2025
Carnival Corporation & plc
Fourth quarter 2025 financial results on December 19, 2025
Portfolio 2 for December 2025: UP 
Activity
No significant activity to report this month.
Dividends Received this month:
Canadian $
Fortis (TSE: FTS)
Whitecap Resources (TSE: WCP)
Alimentation Couche-Tard Inc (TSE: ATD)
SmartCentres Real Estate Investment Trust (TSE: SRU.UN) DRIP
Hammond Power Solutions (TSE: HPS.A)
Supremex (TSE: SXP)
Dream Industrial Real Estate Investment Trust (TSE: DIR.UN) DRIP
iA Financial Group (TSE: IAG)
Brookfield Infrastructure Partners LP (TSE: BIP.UN)
Brookfield Infrastructure Corp (TSE: BIPC)
Tourmaline Oil Corp (TSE: TOU)
US $
Zoetis (NYSE: ZTS)
Microsoft (NASD: MSFT)
Quarterly Reports
MongoDB, Inc.
Third quarter 2025 financial results on December 1, 2025
Bank of Nova Scotia
See report under Portfolio 1.
Mitek Systems, Inc.
Fourth quarter 2025 financial results on December 11, 2025
Dollarama Inc.
Third quarter 2026 financial results on December 11, 2025
Birkenstock Holding plc
Fourth quarter 2025 financial results on December 18, 2025
Portfolio 3 for December 2025: UP
Activity
Bought: Rockpoint Storage Systems Inc. (TSE: RGSI) see January 9, 2026 update.
Dividends Received this month:
Canadian $
SmartCentres Real Estate Investment Trust (TSE: SRU.UN) DRIP
Brookfield Corporation (TSE: BN)
Brookfield Renewables Corp (TSE: BEPC)
Brookfield Wealth Solutions Ltd (TSE: BNT)
Canada Packers (TSE: CPKR)
US $
Microsoft (NASD: MSFT)
Vertiv Holdings (NYSE: VRT)
Nvidia Corporation (NASD: NVDA)
Quarterly Reports
Royal Bank of Canada
Fourth quarter 2025 financial results on December 3, 2025
TD Bank Group
See report under Portfolio 1.