CG Wealth Management January Newsletter
Personal Note From Chris Getzlaf
To all our valued clients, we hope you had a great holiday season and a happy New Year! As our physical office was closed over the Christmas season, we have now reopened and are back to regular working hours. As we turn the page on 2025, we wanted to touch on a few points.
TFSA Contribution Limit Increases
The CRA has officially announced the contribution limit increase for Tax-Free Savings Accounts (TFSAs) in 2026. As of January 1, 2026, eligible individuals will gain an additional $7,000 in contribution room.
With this increase, eligible Canadian residents who have never contributed to a TFSA and have been at least 18 years of age since its inception in 2009 will have a total cumulative contribution room of $109,000 as of 2026.
At some point during one of our past meetings, we’ve probably discussed the many benefits of utilizing a TFSA to save and invest your money. Quite frankly, with advantages like tax-free growth on investments within the plan and tax-free withdrawals (including principal and earnings), it remains one of the best ways to build wealth for yourself and your estate.
Our office has already been in touch with many of you about contributing to your TFSA for 2026. However, if this reminder has you thinking about contributing, please feel free to give us a call or send us an email.
Tax Season on the Horizon
With tax season approaching, we wanted to outline some important dates to keep in mind:
The last day to contribute to an RRSP or Spousal RRSP for your 2025 taxes is March 2, 2026.
The deadline to file your 2025 taxes is April 30, 2026.
The deadline to file your 2025 taxes if you (or your spouse/common-law partner) are self-employed is June 15, 2026.
If you’re new to CG Wealth and have never gone through a tax season with us, here’s some information for you. Our firm partners with former CG Wealth Partner, Glen Koshman, who prepares income tax filings on behalf of our clients for those who wish to participate. Typically, we send out a mass communication in February to clients who are on our list who have used this service before, instructing them on where to send their various tax slips. If you’re interested in having Glen prepare your taxes for the 2025 income tax season, please send us an email and we will add you to the list.
2026 Market Commentary
As we step into 2026, it is natural to wonder what the year ahead holds for the markets, economy, and our portfolios. Will interest rates rise or fall? Will inflation persist, or will growth accelerate? What’s the next major geo-political event? Typically In January, major institutions produce forecasts and outlooks on these topics, tempting us to speculate on the unpredictable.
This brings to mind a classic insight from legendary investor Peter Lynch, the former manager of Fidelity’s Magellan Fund, who famously quipped in a 1977 speech “if you spend 14 minutes on a year on economics you’ve wasted 12 minutes.” Lynch’s point was simple and profound: No one can reliably predict the direction of the economy, interest rates, or the stock market. History is filled with recessions, booms, geo-political shocks, and surprises that few-if any forecasters saw coming. Yet, over the long term, quality businesses have continued to grow their earnings, rewarding patient investors who stayed the course.
We start the year with the S&P 500 at 6,908, and TSX Composite at 32,227. There are indicators there is pressures on the global economy between consumer and federal debt, stretched valuation multiples, inflation, and global reserves purchasing record amount of gold; mix in questions surrounding geo-politics, there are signs that a correction could be on the horizon at some point. However. sentiment on the stock market is bullish for 2026 with S&P 500 2026 estimates from the major investment banks ranging from 7,100 to 7,800.
We don’t have a target price for the S&P500 or TSX Composite, nor believe in setting one. We do believe when looking at these general market indicators, there are valid reasons for cautious optimism and are avoiding certain areas of the market. Often, there has been more money lost in waiting or anticipating a market correct than the actual correction. In 1928 the founder of Merrill Lynch (now part of Bank of America), Charles Merrill, warned investors of a bubble; while he was eventually right - the market rose 90% to September 1929 before he was “right.” In October of 1999, if noise was clouding your judgement, you would have watched the market rise 40% higher before correcting. So, the question should become “do I have faith that in 5, 10, 20 or more years public businesses still be the place to invest?” We do, and the philosophy of our SMA portfolios, where we buy quality companies at attractive prices and participate in their future earnings growth, is steadfast. These are businesses with strong fundamentals like wide moats, consistent profitability, predictable cash flows, and strong solid balance sheets.
What makes us cautiously optimistic about the market? In simplest terms, valuations. Operating earnings need to continue to surpass expectations for justifications of current valuations. As can be seen in the chart below, anytime the S&P 500 has purchased at a multiple beyond 22 prices-to-earnings, future expected return of 5% or more years skews; the forward 10-year annualized returned averaged -2% to positive 2%.
Not all companies are trading at extreme valuations. This is where our SMA Portfolios strive to look for companies that we feel are trading at attractive entry valuations. Currently, names outside of the top 10 companies in the S&P 500 are our US focus, in addition, we plan to remain overweight Canada as their companies look cheaper on a relative basis, and we can gain additional exposure to commodity companies that will play a crucial role in the development of technological infrastructure. Our focused thoughts on our SMA Portfolios will be part of a yearly SMA review letter that will be released every June.
