{"id":1743,"date":"2023-12-21T17:33:55","date_gmt":"2023-12-21T22:33:55","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/?p=1743"},"modified":"2026-02-18T15:13:17","modified_gmt":"2026-02-18T20:13:17","slug":"gold-seal-monthly-review-december-2023","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/gold-seal-monthly-review-december-2023\/","title":{"rendered":"December 2023 Monthly Review"},"content":{"rendered":"

\"Christmas<\/h2>\n

The Santa Claus Rally<\/h2>\n

T\u2019was the night before the strategy meeting, when all through the floor
\nThe portfolios were shining, but Gold Seal<\/strong> wanted more;<\/p>\n

The yields were printing from the bond desk with care,
\nWith hopes that some rate cuts soon would be there;<\/p>\n

Both Powell and Macklem were snug in their beds;
\nDreaming rosy speeches for each of their Feds;<\/p>\n

From restless Canada we\u2019d pulled back our drift;
\nFor saving that economy would take a tour by Taylor Swift.<\/a><\/p>\n

When in the U.S. markets there arose some faint chatter,
\nBetween recession and soft-landing, it might be the latter;<\/p>\n

And up from our Bloomberg\u2019s, to the trade desk we ran;
\nTo review our positions and come up with a plan.<\/p>\n

We pulled up the market but saw no green glow;
\nWhile growth was stable, valuations were low.<\/p>\n

When then caught our eyes, with a big streak of green;
\nA Magnificent Seven, pumped up like Charlie Sheen.<\/p>\n

Soaring to the moon with a share price so high;
\nWe knew in a moment the driver was AI.<\/p>\n

More rapid than stimulus the buy-orders came;
\nAs investors rejoiced and called them by name:<\/p>\n

\u201cBuys on TESLA!, on Google!, on Microsoft! and Meta!
\nOn Apple!, on Amazon! and that new one Nvidia!\u201d<\/p>\n

Technology stocks with horizons so new,
\nWhy buy five hundred when just seven will do?<\/p>\n

Like a bandit snuck in through a Wall-Street back-alley;
\nWe welcomed again this Santa Clause Rally.<\/p>\n

So up to new highs, seven stock prices grew;
\nPaving way for broad stock gains, and for some bonds too-<\/p>\n

And then with some focus we heard on the roof
\nA softly pitter-patter from a familiar hoof-<\/p>\n

Inflation had landed, which last year was great;
\nNow footsteps so light that it must have lost weight.<\/p>\n

Down the chimney it fell, much like oil prices;
\nSo that the consumer could pay for their vices.<\/p>\n

Now up from their slumber rose the two Fed Bank Chairs,
\nSuspecting inflation they ran down the stairs;<\/p>\n

And finding their target, at inflation they sprang,
\nWhich retorted \u201cOk boomers\u201d in millennial slang;<\/p>\n

\u201cBut you\u2019ve clearly shrunk! Our efforts were epic!\u201d
\n\u201cYou fools\u201d it replied, \u201cI just took Ozempic\u201d (NVO:NYSE +48.11% YTD)<\/p>\n

Foe now felled; the bankers proclaimed a rate-hold;
\nThough worried investors were still running to gold.<\/p>\n

International markets celebrated conquered threat;
\nBut Canadians couldn\u2019t hear over the sound of their debt.<\/p>\n

And the Gold Seal team<\/strong>, having witnessed the mess,
\nMade some adjustments in effort to cure client stress.<\/p>\n

While the year held surprises and we certainly weren\u2019t wrong;
\nIt was clear for the moment that it\u2019s time to go long.<\/p>\n

For the bearish investors were no longer wary;
\nOver rates that had risen like the pitch of Mariah Carey.<\/p>\n

Meeting done and trades placed that almost had settled,
\nWe reflected on a strong year and provinces peddled,<\/p>\n

\u201cBut wait,\u201d exclaimed Tanya, \u201cbefore you go home…
\n\u201cWon\u2019t you turn our notes into a bad Christmas poem?\u201d<\/p>\n

And that\u2019s what we did without putting up a fight,
\nSo Happy New Year from Gold Seal, and to all a good night.<\/strong><\/p>\n

 <\/p>\n

A Look Back at a Year that Wasn\u2019t Supposed to be Good<\/h2>\n

With a\u00a0US market decline of -19.4%<\/a>, rampant\u00a0inflation breaching 9%<\/a>, and declining economic growth, 2022 was a doozy. The stage that was set for 2023 may as well have been post-festival Woodstock as the long touted North American recession was set to materialize at any moment, interest rates rose in an effort to quell inflation, and all the usual associated suspects would then materialize: unemployment, depressed wages and stock market declines. What\u2019s come to light this month as we review our year of monthly newsletters is that we were able to do a fairly creative job of describing the same persistent market conditions in a different way each month despite an unchanged outlook. As that relates to our positioning changes: the rhetoric didn\u2019t change, and neither did we. The three messages that our “broken record” kept skipping to were:<\/p>\n

    \n
  1. Rate hikes are unsustainable, and we will be returning to a lower interest rate environment.<\/li>\n
  2. Inflation will dissipate as consumers burn through their pandemic savings.<\/li>\n
  3. Canada has a great destination but a bumpy ride to get there.<\/li>\n<\/ol>\n

    Though the position was sound, the year served as a test of resolve particularly in an industry where being too far ahead of your time is indistinguishable from being wrong. Consider for instance, the hedge fund star Marc Cohodes, famous for his short selling of distressed companies during the Great Financial Crisis of 2008, who\u00a0opened a position betting against Canadian real estate\u2026 in 2016<\/a>. There are limits to how much time can pass while still being able to say \u201cI told you so\u201d and in that regard, 2023 gave our team a run for our money.\u00a0 In February of this year, we\u2019d adjusted to a moderate overweight of fixed income, an underweight of Canadian equities, a less significant underweight to US stocks, and an overweight to international markets. While an adjustment was later made to increase conviction in this positioning, our strategy remained static throughout the year. Meanwhile, in the markets:<\/p>\n