Introduction
Enclosed in this Portfolio Managers’ Notes, we present BMO Nesbitt Burns’ latest portfolio strategy report to give you an update on equity markets and our strategist’s perspective. In addition, we have included a report on Canadian Pacific Kansas City a Model Portfolio holding which recently reported first quarter results.
In the Wealth Management section, we present an article on effective strategies for affluent families to plan the transition of family wealth across generations. For a lighter perspective, we have included a piece featuring Martin St. Louis, who shares five lessons for success. We also provide a reminder of the 2025 contribution deadlines and limits for RRSP, TFSA, and RESP accounts. We encourage clients who have not yet maximized their 2025 registered plan contributions to do so as soon as funds are available.
We are happy to welcome Yanne Nankoo back to our administration team following her maternity leave. We are equally pleased to announce that Thomas Romary, who joined us last year during Yanne’s absence, will now be a permanent team member. As a reminder, the primary contacts for client account administration will remain Tracey Regan and Joanne Shinder. While our associate advisors, Laura Donolo and Branden Hang, continue to work with the portfolio managers to support transactions and client service, reflecting our ongoing commitment to delivering exceptional client service.
We wish you a wonderful spring and invite you to contact us with any questions or to schedule a review of your investment portfolio or financial plan. Our team is here to support you.
Market Research Investment Strategy
May 2025
A welcome reprieve
The S&P 500 has stabilized but our call has not changed: Use strength to reduce risk in portfolios.
Investors dodged a bullet when Trump recently paused the imposition of extremely high tariffs on most trading partners. To use an extreme example, Madagascar was in the firing line for 47% tariffs. This struck us as both absurd and sad for its impoverished people. As widely reported in the media, it was the outsized weakness in the U.S. Treasury bond market which may have convinced the Trump Administration to relent for now. And for good reason. The fact that U.S. stocks, bonds and the U.S. dollar all went down in unison was a clear sign that the U.S. is losing some of its safe haven halo. This is in stark contrast to what we saw at the height of the financial crisis in 2008, when U.S. Treasuries fulfilled their role as a safe asset class, thus helping mitigate the damage in well diversified portfolios.
Read More
Canadian Pacific Kansas City: CP-TSX
Bottom Line:
CPKC Q1/25 results were ahead of expectations and underscored strong momentum on the commercial front and solid operational performance amid weather challenges. 2025 outlook lowered to reflect FX headwinds and a more limited opportunity to outperform the base case mid-single-digit volume growth due to tariffs. Despite shifting trade policies, CPKC appears to continue to enjoy a strong pipeline of revenue synergy opportunities and has identified several growth avenues that have the potential to mitigate the impact of tariffs. Modestly lowering EPS and target price to $125. Reiterating Outperform.
Read more (please contact us)
Wealth Management
Inheriting family wealth: How to prepare
For many high-net-worth individuals with children, amassing wealth may be the easy part; successfully passing down that wealth to their children is where things can get difficult.
Often, those difficulties stem from poor planning. Individuals with significant wealth may be busy running businesses and managing community obligations, leaving them with little free time or energy to tend to the logistics and planning related to transitioning their wealth. Or perhaps they’re simply overwhelmed by the idea of figuring out where to start and then having uncomfortable conversations with their heirs.
This can leave inheritors in limbo, not knowing what to expect or how to prepare. It’s a common situation. According to New York Life’s Wealth Watch Survey, less than half of adults who expect to receive an inheritance said they felt “very comfortable” handling the financial aspects of the inheritance.
If you’re the parent, you want to prepare your kids for what’s to come. If you’re the one inheriting your parents’ wealth, and if you feel overwhelmed, you’re going to want to create your own game plan. Either way, transferring wealth from one generation to another is a good problem to have — but both generations, the one giving and receiving, need a well-thought-out plan, so that the wealth transfer goes smoothly.
Read more
5 lessons from coach Martin St-Louis
In business as in hockey, there are many challenges. Former star NHL player Martin St‑Louis, now head coach of the Montreal Canadiens, knows all about that. A talented right-winger, he won a Stanley Cup and countless other trophies during his career. But his early days in the professional ranks were far from easy. In fact, in his first attempt to join the NHL, he wasn’t drafted.
He learned an important lesson from that first setback: always believe in yourself, no matter what happens. St-Louis recently shared his thoughts with BMO on perseverance, determination and leadership.
Contribution Reminder For Your RRSP, TFSA and RESP Accounts
Maximizing the value of your registered plans by making annual contributions to your Registered Retirement Savings Plan (“RRSP”), Tax-Free Savings Account (“TFSA”), and Registered Education Savings Plan (“RESP”) is an important wealth planning strategy. By making your annual contribution(s) early in the year, you’ll benefit from the tax-sheltered growth all year long.
The contribution amount for 2025 is the lesser of $32,490 or 18% of your 2024 earned income.
TFSA contribution amount for 2025 is $7,000 or cumulative of $102,000 for 2025 if you have never contributed to a TFSA account.
A recent article from La Presse (TFSAs: Canadians in the dark) on May 16, 2025 details significant issues at the Canada Revenue Agency (CRA) regarding Tax-Free Savings Accounts (TFSAs). Since April 17, TFSA information, including contribution limits, has been unavailable on the CRA’s online portal and to customer service agents due to system issues, leaving Canadians unable to access critical data. While we do not know when these issues will be resolved, we have the historical data available for any transactions done with us.
The CRA attributes the problem to delays in processing TFSA annual information returns due to unexpected system issues, with no clear timeline for resolution.
The RESP is an excellent way to save for post secondary education for your children. A contribution of $2,500 to the RESP leads to a combined 30% in government matching savings grants.
Regards,Tim, Catherine, and Edward