Gold Seal Monthly Review

“The stock market is filled with individuals who know the price of everything, but the value of nothing.”

– Philip Fisher

 Exclusive Investment Opportunity with Overbay Capital Partners 2024 Fund

We are thrilled to share an exciting opportunity with you! For the next two weeks, Gold Seal Financial Group is teaming up with Overbay Capital Partners to raise capital for their 2024 Fund. This fund is a fantastic chance to dive into mature, diversified private equity investments at significant discounts to their net asset value (NAV). Overbay Capital Partners, known for their expertise in the secondary market, has built a strategy designed to seize market inefficiencies and deliver impressive, risk-adjusted returns.

We believe this fund can be a great fit for some of our clients investment portfolios.  With a minimum investment of $50,000, you can be part of a fund targeting a net internal rate of return (IRR) of over 15%. Overbay’s track record speaks for itself, and their robust pipeline of upcoming transactions promises potential immediate gains. We invite you to join us in this exclusive opportunity that can align with your financial goals. Reach out to us today to learn more about investing in the Overbay Capital Partners 2024 Fund.

Asset Mix & Strategy Update – May 2024

During our recent Asset Mix Committee meeting on May 27th, the Gold Seal Financial Group team reviewed our portfolio strategy and executed the following trades on May 28, 2024. Here are the key highlights and justifications:

Asset Mix Strategy: No tactical changes were made this quarter. We continue to maintain our underweight positions in cash and Canadian equity investments while favouring fixed income, international, and U.S. stocks.

Position Changes: The stock positions we hold are institutionally guided, and we evaluate this guidance on position changes to adopt in our Serenity portfolios. Our Q2 rebalance was done earlier than planned this year as there had been fairly comprehensive changes to our U.S. strategies that we felt were more time sensitive.

Serenity US All-Cap Growth Changes:

Increases in Weight:

• Trade Desk Class A (TTD): Increased from 0.0% to 2.0%
• Meta Platforms Class A (META): Increased from 0.0% to 2.0%
• NIKE, Inc. Class B (NKE): Increased from 2.0% to 4.0%
• Starbucks Corporation (SBUX): Increased from 2.0% to 4.0%
• PayPal Holdings (PYPL): Increased from 0.0% to 2.0%
• UnitedHealth Group Inc. (UNH): Increased from 0.0% to 2.0%
• Vertex Pharmaceuticals Inc. (VRTX): Increased from 0.0% to 2.0%
• Zoetis, Inc. Class A (ZTS): Increased from 2.0% to 4.0%
• Boeing Company (BA): Increased from 0.0% to 2.0%
• Xylem (XYL): Increased from 0.0% to 2.0%
• Palo Alto Networks Inc. (PANW): Increased from 0.0% to 2.0%
• Workday Class A (WDAY): Increased from 2.0% to 4.0%

Decreases in Weight:

• Advanced Micro Devices (AMD): Decreased from 3.0% to 2.0%
• Generac Holdings (GNRC): Decreased from 3.0% to 2.0%
• SPDR S & P 500 ETF TRUST (SPY): Decreased from 6.0% to 0.0%
• Uber Technologies (UBER): Decreased from 4.0% to 2.0%

Stocks Removed:

• DocuSign Inc. (DOCU): Removed 2.0%
• Illumina Inc. (ILMN): Removed 2.0%
• Lauder Estee Co Ltd Cl-A (EL): Removed 2.0%
• Splunk Inc Shs (SPLK): Removed 0.0%

Justifications:

Reduce Overweight Positions:

• AMD: High valuation at 52.2x price/earnings (P/E) with strong growth prospects; reduced to manage risk.
• Generac: Solid growth outlook but high volatility; reduced for risk management.
• SPY: Shift focus to individual stock selection for targeted growth opportunities.
• Uber: High valuation warrants reduction to balance portfolio.

Increase Underweight Positions:

• NIKE and Starbucks: Reasonable P/E ratios and strong earnings per share (EPS) growth justify increased allocation to capitalize on stable growth trajectories.

Add New Positions:

• Trade Desk, Meta Platforms, PayPal, Boeing, Deere, Xylem, Palo Alto Networks: High-growth potential aligns with portfolio’s focus on technology, communication, and industrial sectors.

Serenity U.S. Dividend Changes:

Removals:

• UnitedHealth Group Inc (UNH)
• Xcel Energy Inc (XEL)

Additions:

• Air Products and Chemicals (APD): Target allocation of 5%
• T-Mobile US (TMUS): Target allocation of 5%

Justifications:

Additions:

• Air Products and Chemicals (APD): Strong operational execution and attractive valuation.
• T-Mobile US (TMUS): Fastest-growing U.S. Telecom business with new dividend initiation.

Removals:

• UnitedHealth Group (UNH): Removed due to regulatory risks and cyber incident.
• Xcel Energy (XEL): Removed to reduce overweight in underperforming utilities sector.

These adjustments align the portfolio more closely with our target allocations, enhance growth potential, and manage risk through strategic weight adjustments.

For more detailed information, please feel free to reach out to your advisor directly.

Celebrating a huge milestone at Wellington-Altus

Wellington-Altus recently exceeding the remarkable milestone of $30 billion in assets under administration (AUA) in just seven years!

Since joining Wellington-Altus, we have received unprecedented levels of support and access to innovation, which is precisely what our founders envisioned when they set out to revolutionize wealth management in Canada. The firm’s approach to putting clients first has set us apart from competitors and solidified our position as one of Canada’s most exciting and fastest-growing wealth management firms—increasing AUA by more than $20 billion since 2020.

It’s not just our assets that are growing. Wellington-Altus’s strong culture of partnership have made it a top destination for talent, more than doubling its headcount since 2019. Today, Wellington-Altus is home to more than 110 advisor teams and over 820 employees with 53 offices strategically positioned across the country and many accolades to its name.

For more highlights on our $30 billion AUA milestone watch the video!

Gold Seal Insights

Ryan’s Rationale: Where are we on the Economic Map?

As we look forward to the rest of 2024, it’s essential to understand the key themes that will shape the global economy and financial markets. The next year is expected to be particularly challenging as the high growth rates we’ve enjoyed in recent years are behind us, and many countries, especially those heavily reliant on international trade, might struggle. However, the U.S. is likely to continue to show resilience due to strong domestic factors and the backdrop of an election year.

Inflation remains a pressing issue. Although there was some relief in 2023-present, the battle isn’t over. The Bank of Canada just announced a policy rate cut of 25 basis points to 4.75%, and there are likely more rate cuts to come.  It’s possible that central banks may end up easing their policies too prematurely, risking a resurgence of inflation. This delicate balance means we need to be vigilant and ready to adjust our investment strategies accordingly, as we have detailed above from our most recent Asset Mix Committee meeting.

We’re also witnessing a significant shift from demand-driven to supply-driven economic forces. Geopolitical shifts, climate events, and supply chain disruptions are becoming more influential. This evolving landscape could make investments in strategic commodities and essential supply chains particularly attractive. While commodities are already a substantial position within our Serenity Global Alternatives sleeve, the team will be looking at opportunities that have presented themselves as a result of supply chain related onshoring.

Another critical theme is the desynchronization of global growth. Different regions are experiencing varied economic impacts, leading to an uneven global growth pattern. Manufacturing is slowing down, but the services sector remains robust. Keeping an eye on these divergent trends will help us spot opportunities and risks, especially in economies focused on exports or services.

Government spending will play a larger role in 2024, a legacy of pandemic-era fiscal stimulus. Increased government involvement in the economy will impact market dynamics, particularly in areas like green investments and defense spending. Understanding these priorities will help us navigate the changes ahead.

In summary, while 2024 presents its challenges, it also offers opportunities for those who stay proactive and informed. By focusing on these key themes and making smart, informed decisions, we can secure our financial future. Let’s approach the new year with a balanced and thoughtful investment strategy, ready to adapt to whatever the market brings.

Tanya’s Tips: Your Digital Footprint: Don’t Overlook It’s Value

In estate planning, we often focus on tangible assets like investments and real estate, neglecting digital assets. However, a Wall Street Journal article highlights the significant sentimental value of digital assets and the distress caused by their inaccessibility. For example, one widow couldn’t retrieve thousands of photos from her partner’s cloud account, while another couldn’t access her late husband’s Facebook profile.

It’s crucial to ensure loved ones can access digital accounts to safeguard important information. Canada lacks consistent legislation granting executors automatic authority over digital assets, and rules vary by province. Even when laws permit access, difficulties arise if no provisions are made by the deceased. Limited customer support for online accounts adds to the stress during an emotional time.

Here are steps to protect your digital assets:

• Update Your Inventory: Maintain an inventory of digital assets, including devices and online accounts (usernames and passwords). Regularly update and securely store this list to help loved ones manage, protect, or close accounts.
• Safeguard Data: Regularly back up important files, contacts, and photos. Consider encrypting sensitive data for added security.
• Use a Password Manager: If maintaining a list of accounts and passwords is challenging, use a password manager to securely store this information.
• Establish a Legacy Contact or Plan: Many platforms allow you to designate a legacy contact or create a legacy plan. For example, Apple devices offer a “Legacy Contact” option under “Settings” > “Password & Security.” Google users can set this up under “Data & Privacy” on “myaccount.google.com.”
• Revisit Your Estate Plan: Ensure your will, power of attorney, or other directives include provisions for digital assets. Grant representatives the authority to access, manage, distribute, and dispose of these assets.

Taking these steps can help protect your digital legacy and ease the burden on your loved ones.

Noteworthy Links

• Money is the leading stressor for nearly half of Canadians
• On which home should you claim the principal residence exemption?
• Capital gains hike will hit estate-planning trusts hard
• This day in history, 1961: Jim Pattison opens his first car dealership

Picture of the month