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Market Pulse: North American markets closed lower Friday with the S&P 500 at 7,624 (-0.5%), NASDAQ Composite at 25,955 (-0.2%), and TSX Composite at 35,788 (-0.5%). About 14 days ago we picked TD.TO on a normal-course issuer bid that reduced share count while capital ratios held, and it closed up 2.78% — a reminder that buyback announcements can provide valuation support even in choppy markets. The Fed's next interest rate decision is imminent and markets are watching for any shift in the path of cuts. Morgan Stanley CIO Mike Wilson called the stock market correction in its "final innings" after the average stock has been in a nasty decline since early June. Earnings season remains heavy with Microsoft, Alphabet, and Amazon all reporting within two days and together representing about 15% of the S&P 500. Global hedge funds posted one of their widest drawdowns since the pandemic last week according to Goldman Sachs data, adding to the sense that breadth has suffered across professional portfolios.

Strategy Spotlight

Custom benchmarking lets TFSA investors measure performance against a personalized ETF mix that reflects the exact dates and dollar amounts of their contributions rather than a single static index. The Globe and Mail article describes a retired Albertan who weights several ETFs by contribution timing to separate genuine outperformance from simple market beta. To implement it, pull your TFSA contribution history from your brokerage, assign each deposit to the ETF allocation you would have held at that moment, then calculate the blended return for comparison against your actual holdings. This approach works best when contribution dates cluster around market lows or highs because it removes the timing distortion that a plain TSX or S&P 500 benchmark introduces. It fails when investors cherry-pick favorable ETF weights after the fact or ignore rebalancing costs inside the account. The technique is especially useful for Canadian investors who add to their TFSA irregularly and want an honest read on whether active picks are adding value. By rebuilding the benchmark from actual cash-flow dates, investors can see whether a holding-company name like POW.TO truly beat what a contribution-weighted mix would have delivered over the same periods. The method also highlights how irregular additions during volatile stretches can make a static index look either too generous or too harsh depending on when money arrived in the account. Source: theglobeandmail.com

Investor Education: The Mechanics of Custom Benchmarking in Tax-Advantaged Accounts

If you held POW.TO in your TFSA and compared its return only to the TSX Composite, the gap might look large, yet weighting the benchmark to your actual contribution dates and amounts can shrink or reverse that gap. The mechanism works by treating each contribution as a separate "bucket" that earns the return of the chosen ETF mix from the day the money arrived, then summing the buckets to create a personalized hurdle rate. A pro habit is to export the contribution log once per quarter and run the weighted calculation in a simple spreadsheet before reviewing any individual holdings. The common misconception is that a single broad index already gives a fair performance picture; the fix is to rebuild the benchmark from the contribution timeline so the comparison reflects the cash flows you actually experienced. When contributions arrive in clusters near market peaks or troughs, the custom benchmark reveals whether outperformance came from security selection or simply from the timing of new capital entering the account. Investors who skip this step often credit or blame their picks for results that were largely driven by when they happened to add fresh TFSA room. Running the calculation quarterly also surfaces any drift between the intended ETF mix and the actual holdings, prompting rebalancing decisions that keep the performance test honest.

Practice Investment of the Day

Disclaimer: This is a SIMULATED trade for educational purposes only. No real money is involved. This is NOT financial advice.

Trade Type: Weekly Hold Structure: Shares Today's Pick: POW.TO — Power Corporation of Canada Market: TSX Sector: financials Strategy: Valuation entry on high net income, insurance earnings growth, and wealth platform expansion that supports a long-term holding-company outlook. Strategy Family: valuation Hold Period: 5 sessions from entry Invalidation: Quarterly net income growth falls below 5% or the stock closes below its 50-day moving average on the daily chart. Stop-Loss: 8% below entry Lesson Tags: valuation_discipline, tfsa_rrsp_mechanics AI Analysis:

• Catalyst: Reported high net income and insurance earnings plus wealth platform growth that underpin the long-term outlook.
• Technical Setup: No specific RSI or moving-average levels provided in source; position relative to 50-day average will be monitored at entry.
• Risk Assessment: Stop-loss caps loss at $80 on the $1,000 position if triggered.
• Target: +2% to +5% over the five-session window.
• Confidence Level: Medium — two factors aligned (earnings visibility and valuation support) but sector rotation risk remains unconfirmed.

Why This Teaches: The pick demonstrates how to read a holding-company earnings profile for durable cash-flow support rather than headline growth, then size the position and set the invalidation before entry so the record can grade the forecast cleanly. Using the custom-benchmark method from today's Strategy Spotlight, listeners can later check whether POW.TO beat a contribution-weighted ETF mix over the same five sessions. The approach keeps the focus on valuation support from insurance and wealth operations rather than short-term momentum. Source: kalkine.ca

Yesterday's Trade Review

Earlier Weekly Hold, closed 2026-10-22 (1 later trade closed since): BN.TO — Valuation entry on 15 percent distributable earnings growth and continued capital deployment capacity Hold: 5 sessions (Friday open → Thursday close) — the full horizon. Stated confidence: Medium Stated invalidation: Distributable earnings growth falls below 10 percent on the next quarterly update or the stock closes below the 50-day moving average on daily chart — never mattered. Stated stop: none the sim could read, so the horizon was the only exit. Entry: $52.55 (Friday open) → Exit: $53.56 (Thursday close) Result: gained 1.92% ($+19.22 on $1,000 position) NASDAQ over the same sessions: -2.42% Alpha vs NASDAQ: Trade gained 1.92% while NASDAQ fell 2.42% over the same 5-day window — +4.34% alpha. Lesson Learned: The invalidation never triggered and the Medium confidence accurately reflected the mixed setup; the horizon exit still captured positive alpha while the index declined. Lesson Tags: valuation_discipline

Portfolio Performance

The Era 2 rules-based record, started 2026-08-18, shows matched-window alpha versus NASDAQ of -0.76% across 36 rules-based trades; 17 of those 36 trades beat the index over their own window and the average trade returned -0.86% against the NASDAQ's -0.10% over the same sessions for a total of -$311.40 across the positions. The t-statistic of -0.74 indicates the result is not yet distinguishable from luck. Until October 22 the show quoted the era record as a compounded figure; the positions run side by side so the record is now the average trade against the index over its own sessions. The full history since March 2026 covers 87 trades with a 52% win rate and cumulative P&L of -$14.73.

Tools & Techniques

Unusual Whales Options Flow The platform surfaces real-time options order flow and dark-pool prints that can flag institutional positioning ahead of earnings or sector moves. Canadian investors can use the free tier to monitor unusual activity on TSX names or U.S. names held in a TFSA, then cross-check volume against the 20-day average before sizing. Access starts at the free tier with paid API tokens available for automated alerts. The service also publishes breaking market commentary that ties unusual flow directly to specific tickers, giving retail users a faster read on potential catalysts than traditional news wires alone. Source: unusualwhales.com

Kalkine Media Stock Screeners The site provides Canadian-focused screens that rank TSX names by earnings growth, dividend sustainability, and valuation multiples. Users can filter for financials or insurance holdings and export the list directly into a portfolio tracker for further analysis. The free daily newsletter delivers the top-ranked names each morning. This lets TFSA investors quickly surface holding-company names like POW.TO that show both net-income strength and platform-growth momentum without manually scanning dozens of filings.

Quick Hits

Hedge funds suffer broadest declines since Covid, per Goldman Sachs Global hedge funds posted one of their widest drawdowns since the pandemic last week, according to Goldman Sachs data. This broad underperformance can create relative-value opportunities for individual investors who stay disciplined on valuation and sector rotation. The declines affected a wide range of strategies, underscoring how even professional managers struggled with the momentum unwind described by Morgan Stanley's CIO. Source: x.com

Morgan Stanley CIO: Stock Market Correction in Final Innings Morgan Stanley's Mike Wilson stated the average stock has already absorbed the momentum unwind and the correction appears to be in its final stages. Investors watching for a turn can use the 50-day moving average on sector ETFs as a simple re-entry signal once breadth improves. Wilson noted that the sustainability of recent gains has been questioned since early June, framing the current environment as one where selective valuation entries may find support. Source: x.com

Nvidia Invests in AI Video Startup Higgsfield Nvidia's growth fund participated in an extension of Higgsfield's $400 million round at a $5.4 billion valuation. The investment highlights continued capital flow into AI infrastructure and applications even as broader tech faces rotation pressure. Growth fund TCV also joined the round, extending the August financing during Jensen Huang's visit to Kazakhstan.

Microsoft Regains Larger Market Cap Than Google Microsoft has reclaimed the position of third-largest stock by market cap ahead of Alphabet. The shift underscores how cloud and AI monetization momentum can re-rank mega-cap leadership within weeks. Microsoft now sits behind only Apple and Nvidia in global market-cap standings.

Li-FT Announces First Results from Summer Drill Program at the Adina-Galinée Lithium Project, Quebec Li-FT Power released assay results from the first five holes of a 45-hole program at its Quebec lithium project. Early results provide concrete data points for investors tracking critical-minerals supply chains inside a TFSA. The company is listed on the TSXV as LIFT and also trades on the ASX and OTCQX. Source: financialpost.com

5 Insurance Stocks to Buy for a Decade of Rising Dividends Motley Fool highlights five insurance names with multi-decade records of consecutive annual dividend increases. Canadian investors can screen these for TFSA eligibility and compare current yields against the custom benchmark method discussed earlier. The list focuses on names that have raised payouts every year for at least ten years, offering a starting point for income-oriented accounts. Source: fool.com

Microsoft, Alphabet, and Amazon Make Up About 15% of the S&P 500 The three names report earnings within two days of each other. Position sizing discipline is essential because any single-name surprise can move the broader index and affect correlated holdings already in a portfolio. Together they represent roughly one-seventh of the index weight, so earnings reactions can influence both mega-cap and sector-ETF performance. Source: fool.com

Listener Challenge

Export your TFSA contribution history for the past 12 months, assign each deposit to a simple two-ETF mix (for example 60% XIU and 40% XEF), and calculate the weighted return to create your personal benchmark for the next quarter.

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