Third Quarter 2025 Newsletter
- catherine2042
- Nov 6
- 4 min read
Market Commentary
After an uneven yet strong first half, performance remained robust in the third quarter as global equity and bond markets continued to reward investors. Optimism around massive AI investment and adoption stabilizing inflation, resilient corporate earnings, and the prospect for interest rate cuts has supported risk assets globally.
Here are the key quarter and YTD highlights:
Equities
S&P 500: +8.28% / +14.29%
TSX 60 +11.46% / +21.97%
Global Equities: +5.02% / +3.68%
Bonds
US Bonds: +2.06% / +6.19%
Canadian Bonds: +1.49% / +2.92%
High Yield: +2.43% / +7.30%
Balanced Portfolios
Global 60/40: +6.70% / +10.90%
We remain grounded in a disciplined investment process that prioritizes resilience, diversification, and long-term compounding over short-term market calls and predictions. While strong performance has rewarded investors in recent years, structural challenges including elevated debt levels, rising unemployment, demographic shifts, and persistent inflation pressures remind us that balance is critical.
Our duty of care never changes – we ensure your portfolios are equipped to navigate any economic environment and its prevailing changes. Our focus on process, risk management, and adaptability provides a structural foundation for families and institutions to act with confidence and calm through whatever the next phase of the market cycle brings.
Fortress Portfolio Positioning and Outlook
The Anchor Pacific Fortress Portfolio is designed to deliver a reliable highly confident outcome over a long-term investment horizon and provide resilience in the face of evolving market challenges across multiple market cycles. Discipline, consistency and adaptability remain at the heart of our investment process.
During the third quarter, we maintained our core asset allocations while making small peripheral adjustments to some of our underlying actively managed strategies. We continue to maintain a more neutral stance on US equities and the USD as opposed to our view and positioning in the years following the pandemic.
With no other material changes of note to our allocations over the course of the third quarter, our present asset allocation for the Fortress Balanced Model Portfolio is below.
Revisiting First Principles
As we reflect on another strong quarter, it’s worth returning to what truly drives long-term success: culture, structure and process. Markets will always move through cycles of optimism and fear, and while the path to growth is rarely linear, our foundation never changes.
We remain guided by passion for our craft, as well as a disciplined and repeatable process to serve clients through all market environments.
The following principles, which you can find on our website, reflect who we are and how we invest.
Values and Culture
Culture and process drive performance.
Success without the proper culture, structure, and process is luck — it is not repeatable. Our culture is built on a passion for investing. The structure and process we follow set you up for success.
Structural discipline.
We structure your investment plan to meet your specific goals and unique circumstances. Clearly marked guidelines ensure discipline is maintained and your wealth remains resilient over the long term.
Accountable and unconflicted.
We act solely as fiduciaries. We don’t manufacture products, and our compensation is not tied to sales. We are 100% fee-for-service and aligned entirely with your interests.
Communication is vital.
We communicate clearly and transparently so that your expectations are properly managed and your needs are fully met.
Investment Pillars
Long-term horizon.
Investing with patience allows a more stable pattern of positive expected returns and helps avoid the costly mistakes of short-termism.
Risk first. Risk always.
Managing risk is complex and multi-faceted. Before considering any investment opportunity, we thoroughly analyze and understand the risk profile in its entirety. Expected return is never the principal decision driver.
Diversification. Easier said than done.
We apply a highly scientific approach to diversification so that portfolios hold truly distinct sources of risk and return, not hidden concentrations.
Asset allocation drives returns.
Research shows that strategic asset allocation explains the majority of long-term performance — not stock picking or market timing.
Evidence over heuristics.
Every investment decision is guided by research based empirical evidence, as opposed to opinions, narratives, biases, and mental shortcuts.
Investment selection. Purpose driven.
Every single investment holding serves a defined role and objective within your portfolio.
Avoid unforced errors.
Your investment program is engineered to maintain investing discipline at all times, thus avoiding costly return slippage that arises from negative decisions dictated by emotions and other behavioral biases.
Learn. Adapt. Evolve.
Successful investment programs are highly adaptive. We are perpetual students of markets in a continuous state of learning and seeking improvement — open, curious, committed and most importantly humble. We can always do better.
Closing Thoughts and Looking Ahead
The key themes shaping portfolio risk and return remain familiar — elevated valuations and levels of global debt, higher global borrowing costs, rising unemployment, and lingering inflation pressures.
Our attention to these dynamics continues to guide how we position portfolios to generate consistent returns while protecting capital.
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