Q3 2025 in Review: The Importance of Diversification and a Healthy Money Philosophy
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Stay caught up with our latest updates on the market and our take on how to navigate the changes.
This month we start our episode with a recap how markets have performed year-to date.
If you’ve been watching your investments, you know that markets have been strong this year, but will this continue? Markets can’t go up forever right? Watch the episode to see how we answer these questions.
Next we discuss the Tower Philosophy of Money. Wealth is a tool to be used to achieve a purpose, accumulation of wealth is not the purpose itself. We hope we can help you align your financial decisions with meaningful purpose.
If you have questions, topic ideas or want to discuss your own investments please reach out, we’d love to hear from you.
Email us at info@towerasset.ca.
Tower Talk Recap: Market Insights and the Philosophy of Money
Global Market Recap: A Year of Strong Gains
Key Market Highlights
We open up the episode with a comprehensive review of global markets as the third quarter closes:
- TSX (Canada): Up nearly 24%
- S&P 500 (U.S.): Up about 15%
- FTSE 100 (UK): Gained 17%
- European Markets: Up 10%
- S&P China 500: Surged 31%
Actionable Insight:
If you’re invested in these markets, you’ve likely seen significant growth in your portfolio. However, strong performance often brings concerns about sustainability and the risk of bubbles, especially in regarding artificial intelligence.
Navigating Market Bubbles and High Valuations
Are We in a Bubble?
Tarek raises a critical point:
“Valuations are certainly at elevated levels, and while no one can predict the future with certainty, it’s always wise to be cautious.”
What Does This Mean for Investors?
- AI Stock Hype: The excitement around AI has driven some stocks to potentially unsustainable highs.
- Market Cycles: Markets don’t rise forever; corrections are a natural part of investing.
- Historical Patterns: October is often a volatile month, and a pullback could be on the horizon.
Expert Advice:
Don’t chase the hottest trends blindly. Instead, focus on building a resilient portfolio that can weather both booms and downturns.
The Power of Diversification
Why Diversification Matters
We emphasize the importance of diversification as the cornerstone of sound investing.
How Diversification Protects You
- Reduces Risk: By spreading investments across asset classes (equities, fixed income, commodities), you’re less exposed to the downturn of any single market.
- Smooths Returns: When one asset class underperforms, others may outperform, balancing your overall returns.
- Cushions Downturns: Fixed income and “risk-off” assets like gold and silver can help stabilize your portfolio during market corrections.
Action Steps for Investors
- Review Your Portfolio: Ensure you’re not overly concentrated in one sector or region.
- Include Fixed Income: Bonds and other fixed income assets provide stability and income, especially during equity market volatility.
- Consider Commodities: Gold and silver have performed well this year and can act as a hedge against uncertainty.
Pro Tip:
If you’re unsure about your portfolio’s diversification, please reach out. At Tower, portfolios are structured to provide broad exposure and risk management.
The Philosophy of Money: Beyond the Numbers
Money Is Not Your Measure of Worth
Mark and Tarek introduce a crucial mindset shift:
“Money is not the measure of our personal value. Our worth isn’t defined by how much we make or how much is in our bank accounts.”
Key Takeaways
- Separate Self-Worth from Net Worth: Financial setbacks or business failures do not define your value as a person.
- Learn from Setbacks: Use challenges as opportunities for growth and learning, not as judgments on your character.
Actionable Mindset Shift:
Regularly remind yourself that your financial statements are not a reflection of your intrinsic value. Focus on personal growth, relationships, and well-being alongside financial goals.
Money as a Tool, Not a Trophy
Tarek expands on the philosophy:
“Money isn’t just something to accumulate for its own sake. It’s there to help us achieve other goals — providing security, funding education, ensuring the safety and well-being of our families, and so on.”
How to Use Money Purposefully
- Set Clear Goals: Define what you want your wealth to achieve (e.g., retirement security, children’s education, charitable giving).
- Align Spending and Investing: Make financial decisions that support your life goals, not just your desire for more money.
- Avoid Comparison: Don’t fall into the trap of measuring success by comparing your wealth to others.
Expert Analogy:
Think of money like a contractor’s hammer — valuable only in how you use it to build something meaningful.
The True Purpose of Wealth
The episode concludes with a powerful reminder:
“The purpose of wealth is to do good — for ourselves, our families, and future generations.”
Practical Ways to Fulfill Wealth’s Purpose
- Support Loved Ones: Use your resources to provide security and opportunities for your family.
- Give Back: Consider philanthropy or community involvement as part of your financial plan.
- Plan for Legacy: Think about how your wealth can benefit future generations, not just your immediate needs.
Final Thoughts: Building a Healthy Financial Life
The episode closes with an invitation to reach out for personalized advice. The key messages are clear:
- Stay diversified and vigilant in your investments.
- Develop a healthy, purpose-driven philosophy of money.
- Remember that your value is not defined by your bank account, but by how you use your resources to build a meaningful life.
If you have questions about your portfolio or want to discuss your financial philosophy, don’t hesitate to contact the Tower team.
Stay Connected
- Engaging Podcasts: We’re committed to keeping you informed and engaged through our podcast. Got questions or topic ideas? Reach out to me at tarek.williams@towerasset.ca.
Tarek 00:00:01 All right. Welcome back to our talk, listeners. Thank you for tuning in to this month’s episode of Tower Talk. We’re going to jump right in. We’ve got a very full episode for you today. I’m going to start with a a market recap. We finished quarter three at the end of September. And I’m just looking at, you know, indexes around the world. Here in Canada the TSX is up nearly 24%. S&P 500 in the states is up nearly 15. The FTSE 100 in the UK is up 17. even in Europe at large is up 10%. In China, the S&P China 500 is up 31%. I mean, if you’re looking at your accounts, you’re also seeing that, hey, you know what? It’s been a good year. In fact, it’s been a good two and a half years in markets. and we’re really happy about that. And I don’t I don’t want to rain on anybody’s parade, but I just do want to say there has been a lot of talk about, hey, are we in a bubble, particularly around AI, which is a fair question.
Tarek 00:00:59 Valuations are at incredible levels, and I think, you know, no one really knows. You know, there’s always there’s always some bubble lurking somewhere in the market. but what I will say is that this is a good time to remember to be diversified. If you’re with tower and your whole wallets with tower, we have made sure that you’re well diversified. Because if there is a bubble, because markets will not go up forever, there will be a pullback at some point. Hopefully it’s not too bad, but that will happen. You want to have assets in fixed income in particular. just because then you’ll be able to experience much less of that that that downturn. as, as an example, gold and silver are also up incredible amounts this year, which are generally risk off assets. So there’s some concern there’s some mixed signals there. but yeah, if you have any specific questions about your account, you let me know and I’ll turn it over to Mark for the next topic we’re going to be covering today.
Mark 00:02:03 So keep your portfolio diversified is the message because we’re in October. October is are terrible for the markets. And you know the back half of October is particularly the bad time of the month. And of course it could be November this year. But we do expect some kind of a pullback be different. Tariq wanted to talk about the philosophy of money for a little bit. So we’re going to do three minutes on the philosophy of money. I’ll start and then Tarek we’ll bring it home. Money is not the measure of our value. there are reasons to argue that we want to make as much as possible. There are reasons to argue that success tells a person that they are being good and they’re doing good things. It’s a little bit of an artificial indicator. What we want to say is healthy philosophy of money means we want to accumulate. We want to do well with what we’ve got. But when we have a business failure, that is not necessarily a personal failure. There may be other things going on.
Mark 00:03:14 We may have needed to change our business model. We may have needed to change some of our partners. We may have needed something else, and maybe we’ll come out of it much stronger for having been through that downturn. So first point on the philosophy of money. Healthy philosophy of money is my value is not in how much I make or how much I have in my bank account, or how much is on on savings account. Although we think a lot more of you when you have more with us at tower. Anyway, Tara’s going to close this with with the application or what is the real measure of our value?
Tarek 00:03:52 Absolutely. So, you know, the philosophy of money, something really important to how we advise our clients and how we help them navigate these life transitions. You know, the big thing I always try to remember is that money is a tool, right? And I know a lot of people say that. but when I say it’s a tool, I mean, we forget that it’s not just there to accumulate.
Tarek 00:04:17 It’s there to help us then do other things with it. So it helps with security. It helps with, you know, maybe education, ensuring your family safety, things like that. And similarly to if you had a contractor who has a hammer, right. That’s his tool. But then he started to collect hammers and he’s got all the hammers and he tells you, hey, I’m the best contractor around because I’ve got all the hammers.
Mark 00:04:42 You look good illustrations, Eric I like it.
Tarek 00:04:45 He that contractor is missing the point. And that’s that’s kind of our philosophy of money. We want to help you accumulate wealth. We want to do a great job at that, be excellent at what we do, but so that you can then meet those goals and, you know, build that house, that, that metaphorical house I was talking about. I think that’s a good summary of our philosophy of money.
Mark 00:05:08 Hey, I’ll double tap that nail. Nice, nice little illustration by saying the purpose of wealth is to do well, if we can.
Mark 00:05:18 If we can use what? What we have, what we’ve earned, what we’ve accumulated over time and different things, if we can use it to do well, to do well for the future, maybe even for all of eternity, if we can do that, we’ve achieved we’ve achieved the purpose of wealth, and we’ve also we’ve also developed a very healthy philosophy on money. I’m down to nine seconds on six minutes. I think we’re done. Tarek are you going to bring us home?
Tarek 00:05:49 I think we’re done. Thanks for tuning in. If you have any questions or concerns, always reach out and let us know.
