We trust this letter finds you well. We sincerely hope you enjoyed a peaceful holiday season. As we reflect on the journey through 2023, we are eager to share with you not only our strategic decisions but also our commitment to understanding and addressing your unique investment needs.

 

Recap of 2023

The year began with a promising surge in stock prices, a welcome change from 2022. Capitalizing on this momentum, we took profits in areas where we saw success and focused our equity investments on sectors we believe in strongly. Recognizing the ongoing adjustments by central banks, we increased liquidity by strategically reducing our alternative investments. This shift allowed us to benefit from the downturn in interest rates during the latter part of the year. Notably, our allocations to the technology and digital asset sectors were particularly successful, helping us navigate market trends and generate robust returns. The third quarter underscored our commitment to risk management, as we fine-tuned our technology investments and demonstrated the resilience of our core equity holdings.

 

What did We do in Q4 2023? 

In the final quarter, we made significant moves to enhance our portfolio’s diversity and stability. We shifted our real estate investments from Canadian private REITs to promising metropolitan areas in the U.S., continuing our focus on apartment buildings. We also adjusted our stock portfolio, reducing Canadian holdings in favour of more internationally diversified stocks, with an emphasis on lower volatility. On the fixed income front, we introduced a new private credit solution in the U.S., generating consistent monthly income and further aligning with the U.S. economy and currency.

 

Update on Digital Assets

Our optimism in digital assets is bolstered by significant technological improvements in the Bitcoin and Ethereum networks and the recent decision on the first Bitcoin ETFs in the U.S.. This development opens doors for more investors, coinciding with the upcoming Bitcoin halving in April 2024 – an event historically linked to higher demand and price increases. We continue to evaluate opportunities to take profits as the sector continues to experience upward momentum.

 

Changing Global Economic Factors

As of December 2023, the economic outlook is shifting, with rate cut expectations signaling potential weaknesses ahead. We are navigating this with caution, positioning our ETF investments designed for defined outcomes and minimal volatility. We are maintaining our tactical positions in technology, digital assets, Canadian energy, and global base metals. Despite the recent underperformance of Canadian energy, the sector not only offers strong fundamentals but also acts as a hedge against global uncertainties and conflicts.

 

Outlook and Plans for 2024

In early 2024, we plan to reinforce our fixed income strategy. We’re introducing a public fixed income ETF and a new private credit fund, both aimed at generating stable, consistent monthly income. As we anticipate the end of the interest rate hiking cycle, we’re adjusting our strategy to suit the new yield dynamics, shifting away from less favourable money market positions. With our new bond ETF (which includes an options strategy), we aim to enhance credit quality and monetize interest rate volatility for additional income. The private credit solution extends our approach to lend to large U.S. private businesses while adding operational diversification.

 

We’re here to ensure these strategies align with your personal investment goals. Please feel free to reach out for a discussion about your portfolio in light of these updates. Your continued trust and support mean the world to us.

Sincerely,

 

The Team at Stonehaven Private Counsel

 

About the Authors
This commentary was prepared by Jeff Sproul, PFP®, CIM®, Victor Kuntzevitsky, CFA, CAIA, and Grant Dawes, CIM®, CFP®, TEP of Stonehaven Private Counsel at Wellington-Altus Private Counsel. Together, they provide portfolio management and wealth planning guidance to business owners, executives, affluent families, retirees, and multi-generational wealth clients. Learn more about their experience, credentials, and areas of expertise and explore how Stonehaven supports different client needs through its work with business owners, retirees, professionals, families, and next-generation wealth clients.

The material contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document.  Wellington-Altus Private Counsel  (WAPC) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact your financial advisor.