Year-End Financial Planning: Why Smart Planning Beats Smart Predictions

As December arrives, so does the annual flood of predictions for next year. Should you adjust your portfolio based on these forecasts? History suggests otherwise. 

As the New Year approaches, year-end financial planning in Canada should focus on controllable actions and not 2026 market predictions. You will start to see a flood of news articles and headlines that boast market predictions for 2026, including everything from interest rate forecasts, total market stock returns per index and even economic trends. How much stock should you put in them? Well, the title of this article gives you a hint – not much. History shows a consistent pattern that most predictions miss their mark and send investors on wild-goose chases for phantom returns. The wiser approach is to focus on what you can control through structured planning rather than what you cannot predict reliably about market direction.

“You can’t control what markets will do next year, but you can control whether you’ve maximized your RRSP, protected your family, and positioned your wealth for whatever comes.” ~Steve McBride

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The Futility of Predictions

Financial experts face tremendous pressure to forecast next year’s markets, yet research consistently demonstrates their limited accuracy.

Benjamin Graham’s famous quote about how “in the short run, the market is a voting machine, but in the long run, it is a weighing machine,” describes a great analogy for predictions. There are no definitive data points that could accurately forecast much of what these pundits are forecasting. So in a sense, they are voting with their voices. Only after the year is finished can we see what the results are and weigh them.

Attempting to time the markets based on these predictions also typically results in:

• Buying after prices have already risen
• Selling after declines have occurred, and
• Missing the strongest recovery days that often follow the worst declines

In fact, forecasters are wrong more often than they are right. In a study by Berkeley, of 16,559 forecasts, it found that elite economists were only correct 23% of the time despite reporting 53% confidence in their predictions. In another analysis by CXO Advisory Group, which studied 6,584 forecasts by ‘market experts,’ the accuracy averaged below 47% - worse than flipping a coin. Wall Street strategists have underestimated S&P 500 returns in 13 of the past 16 years, and in 2024, every major US banking institution underestimated the market, some by 60%.

The pattern is clear. Chasing forecasts typically results in buying high after rallies and selling low during corrections, the opposite of successful investing.

The Power of Planning

While predictions focus on the unknowable future events, planning addresses the controllable actions of the present. Effective year-end financial planning in Canada centres on three foundations:

• Tax-advantaged account optimization: Maximizing RRSP and TFSA contributions creates long-term compounding benefits regardless of short-term market direction.
• Risk management review: Ensuring insurance coverage, diversification, and withdrawal strategies remain aligned with your goals and life stage.
• Tax-efficient positioning: Coordinating account types, withdrawal sequencing, and income timing to minimize lifetime tax obligations.

These planning activities deliver measurable value whether markets rise or fall in 2026 because they’re based on fundamental principles, not market forecasts.

Year-End Financial Planning Priorities for Canadians in 2025

Several year-end deadlines create time-sensitive planning opportunities. Missing these dates means delayed tax benefits, lost contribution room or unnecessary tax obligations.

RRSP Contributions

• Deadline: March 2, 2026
• Contribution Limit: Lesser of 18% of 2025 earned income or $32,490 annual maximum
• Strategy: Early contributions put your money to work sooner with tax-deferred compounding

TFSA Planning

• Annual contribution limit: $7,000 for 2025
• Cumulative room for eligible Canadians (18+ since 2009): Up to $102,000 if never contributed
• Strategy: Again early contributions maximize tax-free compounding throughout the year

Capital Gains and Tax Changes

• Proposed capital gains inclusion rate increase was cancelled, leaving the rate at 50% for all capital gains.
• Lifetime Capital Gains Exemption: increased to $1.25 million for qualifying small business shares
• Strategy: Entrepreneurs and business owners gain planning certainty for 2026. They enhanced $1.25 million exemption may create favourable conditions for business succession planning.

Estate and Year-End Review

• Charitable giving strategies: donating appreciated securities eliminates capital gains tax while generating donation receipts
• Beneficiary review: verify designations on registered accounts and insurance policies
• Income splitting: explore pension income splitting, and other opportunities for couples
• Withdrawal strategies: Confirm that your drawdown approach remains tax-efficient given any income changes.

Have you assessed these year-end opportunities to ensure a solid foundation for 2026?

McBride Wealth Approach

At McBride Wealth Management, year-end financial planning for Canadian investors is built on timeless principles rather than annual market forecasts. This includes fundamentals-driven positioning for your portfolio holdings, systematic rebalancing, removing emotion and reinforcing buy-low, sell-high behaviour, and, lastly, tax-efficient structures to preserve wealth across decades.

As 2025 closes, resist the temptation to adjust your strategy based on ‘expert’ predictions for 2026. Instead, use smart planning to beat predictions.

Lastly, as I close out the year, I want to thank my clients, colleagues and coworkers for a wonderful year and wish you a fruitful 2026. Happy Holidays and may you have a wonderful New Year.

If you are a client, thank you for taking the time to read this and I look forward to our next conversation. Please feel free to share this with your friends and family who may be in need of another viewpoint.

If you are looking for a second opinion on your portfolio or would like to have a planning conversation tailored to your needs, book a no-obligation complimentary portfolio review with me today.

Sources

1. Canada Life. "Important Savings Deadlines and Limits for 2025." Canada Life, 2025. https://www.canadalife.com/investing-saving/saving/important-savings-deadlines-and-limits-for-2025.html
2. Graham, Benjamin and David L. Dodd. Security Analysis: Principles and Techniques. McGraw-Hill, 1934. Quoted in Quote Investigator, "Quote Origin: In the Short-Run, the Market Is a Voting Machine," Jan. 9, 2020. https://quoteinvestigator.com/2020/01/09/market/
3. Kaiser Partner. "Predictions: Popular, but Not Very Helpful." Kaiser Partner Bank, Jan. 26, 2024. https://kaiserpartner.bank/news/predictions-popular-but-not-very-helpful/
4. Moore, Don and Sandy Campbell. "Why Economic Forecasts Are So Often Wrong." Berkeley Haas Newsroom, Sept. 23, 2024. https://newsroom.haas.berkeley.edu/why-forecasts-by-elite-economists-are-usually-wrong/
5. Nationwide Financial. "Be Skeptical of Stock Market Predictions for the Coming Year." Nationwide Financial Professionals Blog, Dec. 18, 2024. https://www.nationwide.com/financial-professionals/blog/markets-economy/articles/be-skeptical-of-stock-market-predictions-for-the-coming-year
6. Prime Minister of Canada. "Prime Minister Carney Cancels Proposed Capital Gains Tax Increase." Government of Canada, Mar. 21, 2025. https://www.pm.gc.ca/en/news/news-releases/2025/03/21/prime-minister-mark-carney-cancels-proposed-capital-gains-tax-increase
7. YCharts. "S&P 500 Forecasts for 2025: Major Bank Predictions & 2024 Accuracy Review." YCharts Blog, Sept. 3, 2025. https://get.ycharts.com/resources/blog/major-banks-sp-500-target-price-forecasts-for-2025/

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