Quick Market Update

Good afternoon,

Quick note on the markets. Despite a tough week given market performance, we are still having a good year.

The TSX is negative for the year, we are positive year-to-date. I’ve created the chart below (S&P/TSX Composite YTD) which shows where we stand in the correction. The initial correction we had only lasted
10 trading days from January 26 to February 10 – markets corrected over 10%. We earned a good amount back, but a 10-day correction after 500+ days to the upside is simply not enough. If you look below, we will almost surely test the checkered line bottom, and possibly test the firm red line.

Source: Bloomberg

We are looking at purchases, not sales – however, we are not prepared buy anything just yet.  We did sell our Loblaws in March and increased cash to the highest level in a few years – portfolios are more conservatively invested than in the previous January correction. We will continue to buy companies with strong balance sheets, ensuring no mistakes are made during a rate rising cycle.

When you look longer term on the 10-year time horizon (below), I’ve added a trend line to emphasize when the bull market broke out – we are not yet concerned about cracks in the secular bull market. The economy remains strong, and this would be a market correction, not an economic correction, so a major decline is less likely.

Source: Bloomberg

These corrections are normal and healthy, just no fun for investors.

Feel free to call in if you have any questions or concerns, we are watching closely and will act when necessary.

Have a great day – go have some fun,
Chris, Steve, Rick