For all your days prepare, And meet them ever alike: When you are the anvil, bear – When you are the hammer, strike. – Edwin Markham
Markets Each of the Portfolios supplied better performance than its benchmark over a volatile February. Stocks fell quickly and substantially, particularly the last week of February, on fears that a corona virus pandemic would slow global growth. Our predilection towards value and cashflow helped support our companies so that losses were kept relatively minimal and manageable. That said, with all my bullishness on Canadian energy, most of our energy stocks crossed their loss thresholds and were thus sold to protect capital. Energy weakness was offset by very strong performance from our gold miners, several of which touched new highs in the month. Some other recent additions to the Portfolios finished the month higher. In all, I’m thankful our strategy is working to minimize downside, and that we’ve been able to identify some companies that have bucked the down trend through such a tough month. I consider that promising for our long term objective.
I’m closely watching for central bank responses to corona virus developments. If China is to be a model in this regard, we can expect a new supply of central bank easing to inject liquidity into the markets. The question is how much will the economy grow in relation to the amount of easing delivered? If the economy can sustain even modest growth, the new liquidity would boost asset prices substantially. If the economy slows, the liquidity helps keep the gears greased. While it’s too early to say at this point, there are certain companies and sectors that will be an early “tell”. Until a clear signal emerges, caution is paramount.
Financial Planning Most financial planning centers around the value Advisors bring to the individuals they serve. But corporations are equally important in our mission to provide better service and advice. To that end, when was the last time, as a business owner or plan member, that you looked at your company’s group benefits plan? One of our team members specializes in advising companies in setting up and administering group benefits. If you’d like to review yours, please be in touch. This is particularly important for high income earners who may be under-served by their corporate plans.
Recommended reading A wonderful interview with the father of behavioural economics Daniel Kahneman on developing better decision making, rules-based approaches, and intuition https://fs.blog/daniel-kahneman/
The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts 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. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus. Wellington-Altus Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. All trademarks are the property of their respective owners.
Market Commentary
February 2020 Update
For all your days prepare, And meet them ever alike: When you are the anvil, bear – When you are the hammer, strike. – Edwin Markham
Markets
Each of the Portfolios supplied better performance than its benchmark over a volatile February. Stocks fell quickly and substantially, particularly the last week of February, on fears that a corona virus pandemic would slow global growth. Our predilection towards value and cashflow helped support our companies so that losses were kept relatively minimal and manageable. That said, with all my bullishness on Canadian energy, most of our energy stocks crossed their loss thresholds and were thus sold to protect capital. Energy weakness was offset by very strong performance from our gold miners, several of which touched new highs in the month. Some other recent additions to the Portfolios finished the month higher. In all, I’m thankful our strategy is working to minimize downside, and that we’ve been able to identify some companies that have bucked the down trend through such a tough month. I consider that promising for our long term objective.
I’m closely watching for central bank responses to corona virus developments. If China is to be a model in this regard, we can expect a new supply of central bank easing to inject liquidity into the markets. The question is how much will the economy grow in relation to the amount of easing delivered? If the economy can sustain even modest growth, the new liquidity would boost asset prices substantially. If the economy slows, the liquidity helps keep the gears greased. While it’s too early to say at this point, there are certain companies and sectors that will be an early “tell”. Until a clear signal emerges, caution is paramount.
Financial Planning
Most financial planning centers around the value Advisors bring to the individuals they serve. But corporations are equally important in our mission to provide better service and advice. To that end, when was the last time, as a business owner or plan member, that you looked at your company’s group benefits plan? One of our team members specializes in advising companies in setting up and administering group benefits. If you’d like to review yours, please be in touch. This is particularly important for high income earners who may be under-served by their corporate plans.
Recommended reading
A wonderful interview with the father of behavioural economics Daniel Kahneman on developing better decision making, rules-based approaches, and intuition https://fs.blog/daniel-kahneman/
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The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts 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. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus. Wellington-Altus Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. All trademarks are the property of their respective owners.