We hope this letter finds you in good health. It’s remarkable how swiftly summer has passed, and we’re optimistic that the pleasant weather will linger a bit longer. Once more, we are delighted to offer you an overview of our actions and insights from the past three months.

 

Increasing Liquidity and Managing Risks:

We remain committed to bolstering the liquidity of your portfolios. During the past quarter, we made strategic decisions that reflect our dedication to sound risk management. We decided to exit our investment in Cortland Credit and additionally, we prudently reduced our exposure to Centurion Apartment REIT as a part of our broader strategy to diversify our real estate holdings.

 

Strategic Technology Rebalancing:

While we have celebrated the technology sector’s outstanding performance, we also acknowledge the importance of maintaining a balanced portfolio. We judiciously rebalanced our technology positions considering the sector’s prior outperformance. Nonetheless, we retain our optimism about its future prospects.

 

Core Equity Investment Resilience:

Core equity investments, consisting of minimum volatility and buffer ETF’s, demonstrated their resilience during a challenging third quarter in the broader markets. Not only did they help protect capital, but they also positioned us to seize opportunities during any market upswings.

 

Adjusting for the Future:

Looking ahead, we have strategic plans to reduce our Canadian exposure, both in fixed income and equities, and potentially remove some of our Canadian currency hedges. We have been active in our due diligence, and we plan on allocations to additional U.S. private debt and private real estate. Our rationale is anchored in economic fundamentals. Productivity in the U.S. surpasses that of Canada, indicating greater economic strength and growth potential. The diversified nature of the U.S. economy reduces the vulnerability of sector-specific shocks, enhancing resilience.

 

Addressing Home Bias:

In the Canadian investment landscape, a substantial home bias persists. Canadian investors often exhibit a strong inclination towards domestic investments, despite Canadian equities representing only 3.4% of the global market. We encourage diversification to mitigate concentration risk.

 

Acknowledging Potential Headwinds:

It’s essential to remain vigilant amid a landscape where complacency appears to prevail. Some investors assume a soft landing, even as bond prices decline, interest rates rise, budget deficits loom large, and COVID-19 savings are depleted. We take heed of these factors in our decision making.

 

In conclusion, our philosophy of “taking a train, not a roller coaster,” remains steadfast. We are ever mindful of potential headwinds and adapt accordingly to secure your financial well-being.

 

Please don’t hesitate to reach out if you have questions or need further clarification. Your trust is our driving force, and we are dedicated to navigating these complex times with prudence and care.

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.