The biggest investment story in 2007 was the rapid appreciation of the Canadian dollar (Reader Jon pointed out that the higher loonie also resulted in pressure on retailers to lower prices): Our buck appreciated 18% against the U.S. Dollar, 7% against the Euro, 11% against the Yen and 17% against the Pound Sterling. The soaring loonie decimated total returns from foreign equities – US and EAFE stocks lost value and even returns from soaring emerging markets don’t look so rosy in Canadian dollars.

Bonds: 3.3%
REITs: -5%
Canadian Equities: 9.5%
US Equities: -10.5% (5.3% in USD terms)
EAFE Equities: -6.7% (10% in USD terms)
Emerging Markets: 16.5% (37% in USD terms)

A preliminary look at the Sleepy Portfolio suggests that you need a magnifying glass to find any gains – it’s up a scant 0.2%. I wouldn’t read too much into it since it’s not an apples-to-apples comparison because of significant changes to the portfolio during the year. Still, you should count yourself lucky if your portfolios posted gains in the low single digits during the past year.