We realize it has been less than a week since our quarterly update, but we thought with events on the weekend with the 25% tariffs being planned for Canada and Mexico, we would send out another quick note.

We do not know if the 25% tariffs will be implemented tomorrow or there will be an 11th hour deal to delay them. Mexico has come out and said that a deal is in place to delay the tariffs for a month but so far nothing has been confirmed in Canada and there will be another call at 3 p.m. between President Donald Trump and Prime Minister Justin Trudeau to discuss further. Business leaders and politicians in the U.S. pushed back heavily on the tariff plan but that doesn’t mean they won’t be implemented as Trump has a tendency of doubling down when people think he is wrong. The reaction from Canada has been swift and uniting as seen in hockey arenas in Ottawa, Calgary & Vancouver. Perhaps Trump is getting enough pressure from his own people to step back from the brink but only time will tell.

The key thing to remember with your portfolios is that if you are investing for a longer than 3-5 year period markets tend to go higher as the economy grows. There is often perceived crisis we need to deal with and are always seen as very important when we are in the middle of them. This too will pass. Will it be a month, three months, or 1-2 years, we do not know. Companies are valued on the future cashflow their business model can generate. If tariffs are put in for a temporary period markets will eventually look through the temporary headwinds and look at the earnings value of the companies.

This is why we invest your portfolios with an asset allocation designed for what your goals are and the volatility you can be comfortable with. You have a certain amount of your investments in equities for the growth part of the portfolio and a certain amount in bonds and income for the stable part of the portfolio. When capital is needed, we take it from the areas that make the most sense at the time. This allows investors to be comfortable in any market environment.

If you have any questions about your portfolio, please let us know and we will be happy to walk through them with you. We still believe that markets will be higher by the end of the year as the economy continues to grind along.

Stay warm,

Mike, Craig, Darren, Paul & Brent