We’re pleased to share the latest Quarterly Market Update in this edition of Wealth Matters for Dentists.

Market Overview

As of October 21, 2025—the 21st day of the U.S. government shutdown—headlines were dominated by U.S. debt concerns, shifting central-bank policy, and the ongoing surge in AI-related investment. U.S. equities rebounded after rate cuts, but valuations remain stretched and leadership is increasingly concentrated: just ten S&P 500 companies now account for about 40% of the index’s market value.

In Canada, markets held up well despite ongoing trade disputes with the United States. Gold touched record highs on inflation concerns and a potentially weaker U.S. dollar. Financials delivered a strong quarter, supported by solid earnings, dividends, reasonable valuations, and share buybacks. Our defensive stance remains deliberate—seeking growth while managing volatility.

Internationally, returns cooled after a strong first half. Optimism around a possible easing of U.S.–China trade tensions supported Chinese equities, and overall, international markets still offer more attractive valuations than the U.S.

Our Perspective

Momentum persists, but we remain disciplined. Elevated valuations, rising debt, and narrow market leadership reinforce the case for diversification and active management. Even as enthusiasm for AI accelerates, we focus on fundamentals—owning high-quality businesses with sustainable earnings and long-term value creation.

History shows that breakthrough technologies often spark exuberance followed by disappointment—from the 1920s radio boom to the late-1990s dot-com and “dark fiber” episodes. Innovation can reshape the economy, but careful selection and valuation discipline matter.

Have Questions?

Contact Wealth Advisor Cory Wilson at cory.wilson@protectfinancial.ca or 416-391-3764.