Hey friends,

I’m very excited to share that my cousin Spencer just started a newsletter—Gude Reports Canada, a research blog that Speaks the Truth on Topics of Canadian Consequence.

Clip from his first issue:

Call me biased, but it’s a must read for anyone interested in understanding what’s really going on between Canada and the USA.

Oh, and if you are enjoying this Journal, please forward to your friends to subscribe. 

Personal Finance

Serious money saving hack for you today.

Let your toddler play with mom’s wallet.

Toddler hides wallet in the trash can.

Dad disposes of trash at the dump.

Mom’s credit cards—gone!

Then, Dad lends his credit card to Mom.

A day or two later—she can’t find it. Another one, gone again.

Julia Sofia! Stop (keep) doing this to your Mother!

After a couple weeks of no credit spending, replacement cards showed up.

Mom says to Dad, “awesome, now all my backlogged Amazon purchases can finally go through”.

LOL.

This is a true story…mischievous little Julia must have some earn more → spend less → invest the diff in her blood.

But also an eye-opener.

By the way, between Mj and me, I am the bigger spender.

She may buy household deco or wellness products that I roll my eyes at, but the bills on those are fairly low compared to my (2) squash club and golf club memberships!

Still, this accidental experiment poses something crucial:

Credit cards and tap payments make spending too easy.

Money simply evaporates into thin air—frictionless spending.

But for two weeks, without credit cards, spending required more effort, i.e. debit cards and real cash.

And guess what? It dropped, significantly, for both of us 😉 .

If you want an immediate step change in your monthly savings plan, consider this tactical experiment: just cut the CCs up and throw them in the trash.

You’ll be shocked how much less you spend.

Try it out!

Stock Markets

Recent sell-offs in stocks, crypto, and just about everything else are stoking fear like I haven’t seen since COVID.

What do you do?

Look at history. It’s there for you to read and learn from.

What history tells you is simple: there will always be corrections.

Which is another way of saying that stocks go down.

Here’s how often they happen:

• A 10% decline happens about once every 1.6 years.

• A 20% decline happens about once every 4 years.

• A 30% decline happens about once every 10 years.

• A 40% decline happens about once every 25 years.

But what happens after every correction?

Markets go up. Over time, they always recover and hit new highs.

Declining markets are a mix of two factors. The first is declining fundamentals—things like inflation, interest rates, productivity, and margins. The second, and often more extreme factor, is emotion—panic selling, fear, and overreaction.

Just like stocks can overshoot to the upside (NVIDIA, Tesla, etc.), they can also overshoot to the downside.

The key to successful investing is understanding that you will periodically see losses on paper. But those losses also represent major buying opportunities.

Remember when Facebook dropped from $375 to $90? That hurt. But today, it's at $637.

Remember when the S&P 500 dropped from 3,307 to 2,304 during COVID? That hurt. But today, it's at 5,700.

In the past 12 months we’ve seen three >5% declines:

There will always be pullbacks, corrections, and bear markets.

Serious long-term investors see them as opportunities.

If you keep a level head, maintain long-term conviction to your investing plan, buy more shares regularly, and automate your investments, you will build a massive portfolio for your future.

Hope this helps. Stay rational. Keep investing.

Real Estate

Commercial real estate has been in a tough spot since COVID disrupted the world.

Office valuations have dropped ~50-60% due to WFH. The one bright spot? Vacancy rates are stabilizing—suggesting businesses have had time to downsize and offload excess space.

But net new leasing activity remains slow in this sector. Outside of prime AAA properties with top-dollar locations and amenities, there’s little sign of real momentum.

High interest rates have further stalled transaction volumes across all sectors. Sellers hold firm on valuations, unwilling to take lower prices, while buyers struggle to make deals pencil under today’s expensive cost of capital. Although we are seeing some reprieve in interest rates, which should ease the situation generally, I can tell you the cost of equity capital is still high.

The numbers tell a story: commercial real estate transactions were a lofty $110 billion in 2022, only to collapse by 50% to $55 billion in 2023. And 2024 wasn’t any better, falling another 8% to $50.5 billion, per Altus Group.

Now, political havoc on both sides of the border (we Canadians need to look at our own leadership just as closely as we do Washington)—combined with new tariffs—is adding uncertainty to the real estate capital markets. Conditional deals are getting delayed or shelved entirely.

For those of us in the industry, this environment is tough. Many were banking on a rebound in 2025, but the outlook is bleak in terms of volume.

Don’t get me wrong, assets will still trade. But they need to be in demand, yet priced to sell.

For many owners, the focus must shift to optimizing existing assets—keeping tenants happy and managing costs carefully. Those with low leverage, strong tenants, and solid acquisition prices will be just fine.

But overleveraged owners, particularly in development, will face headwinds.

It’s a challenging market. Those with flexibility and that stay disciplined will come out ahead.

1 Quote

A Question

Who else has tried the credit card trash bin strategy?

_____________

If you enjoyed this issue, please forward this email to your friends to subscribe.

Thank you

Eddie Gudewill, CFA

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