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Stocks consolidated their recent gains last month, reaching what we believe to be a near-term low in mid-April. Our analysis of various measures of volatility and options trading suggests a climax in selling occurred, likely exaggerated by U.S. investors selling stocks ahead of their April 15 tax deadline. This presents an opportune moment to deploy new cash, particularly as high-quality growth companies, and those with the largest gains year-to-date, were most affected. The strength witnessed in the first quarter’s trading reinforces our belief that we may see another year of double-digit performance gains in the indices by year-end.
Our optimism is underpinned by supportive fiscal policies driving growth, notably in the U.S. Strong consumer spending and robust employment figures further bolster our confidence. While some argue that this economic strength stems solely from government intervention rather than private sector growth, we maintain that growth from fiscal sources is just as valuable. In fact, government-led growth, detached from the fluctuations of a business and credit cycle, may prove to be more stable and enduring in the long run compared to the credit-dependent private sector booms and busts we’ve grown accustomed to over the last 50 years. As such, we believe the economic data emerging over the last few years aligns with the early stages of a paradigm shift towards a new model of government-led growth. That is, going forward we should expect more, and not less, government intervention.
Looking ahead to the upcoming November election, while the two candidates are expected to run distinct and polarizing campaign platforms, there is a notable commonality – both have endorsed expanding deficit spending in the past. We anticipate this messaging will persist in the months ahead, potentially injecting more money into the economy.
We believe high quality stocks are the best hedge to such a massive amount of government spending.
Model Portfolio Highlights
Growth Portfolio
We made no changes in April.
American Growth Portfolio
In April we sold Accenture and Edwards Lifesciences, replacing the positions with higher quality companies Moody’s Corp and Veeva Systems.
Income Portfolio
We made no changes to the holdings in April. We continue to hold high quality U.S. and global growth companies.
Small Cap Portfolio
We made no changes in April.
Across all portfolios we look for mispriced opportunities, considering only those with a significant margin of safety and minimal risk of permanent capital loss. After identifying such opportunities, patience is the most important factor in realizing our expected long term return.
If you have any questions about your portfolio, financial planning or investments please be in touch.
Thank you.
Yours,
Ben
Ben W. Kizemchuk
Portfolio Manager & Investment Advisor
Wellington-Altus Private Wealth![](https://advisor.wellington-altus.ca/stonehavenwealthmanagement/wp-content/uploads/sites/57/2020/06/ben.png)
Office: 416.369.3024
Email: bwk@wellington-altus.ca
Book a meeting
Ben Kizemchuk offers full-service wealth management for high-net-worth Canadians including families, business owners, and successful professionals. Ben and his team provide investment advice, financial planning, tax minimization strategies, and retirement planning.
Performance reporting disclaimer: Performance results reflect the returns of each representative model portfolio. Returns are calculated using each model portfolio’s monthly performance, including changes in securities values, and accrued income (i.e., dividend and interest), against its market value at the closing of the last business day of the previous month. Performance results are expressed in the stated strategy’s base currency and are calculated on a net of fees basis. Individual account performance may materially differ from the representative performance history set out in this document, due to factors such as an account’s size, the length of time the strategy has been held, the timing and amount of deposits and withdrawals, the timing and amount of dividends and other income, and fees and other costs. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security and no financial decisions should be made solely on the basis of the information provided in this document. This is not an official statement from WAPW. Please refer to your official WAPW statement for your specific performance numbers.
Market Commentary
May 2024 Update
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Stocks consolidated their recent gains last month, reaching what we believe to be a near-term low in mid-April. Our analysis of various measures of volatility and options trading suggests a climax in selling occurred, likely exaggerated by U.S. investors selling stocks ahead of their April 15 tax deadline. This presents an opportune moment to deploy new cash, particularly as high-quality growth companies, and those with the largest gains year-to-date, were most affected. The strength witnessed in the first quarter’s trading reinforces our belief that we may see another year of double-digit performance gains in the indices by year-end.
Our optimism is underpinned by supportive fiscal policies driving growth, notably in the U.S. Strong consumer spending and robust employment figures further bolster our confidence. While some argue that this economic strength stems solely from government intervention rather than private sector growth, we maintain that growth from fiscal sources is just as valuable. In fact, government-led growth, detached from the fluctuations of a business and credit cycle, may prove to be more stable and enduring in the long run compared to the credit-dependent private sector booms and busts we’ve grown accustomed to over the last 50 years. As such, we believe the economic data emerging over the last few years aligns with the early stages of a paradigm shift towards a new model of government-led growth. That is, going forward we should expect more, and not less, government intervention.
Looking ahead to the upcoming November election, while the two candidates are expected to run distinct and polarizing campaign platforms, there is a notable commonality – both have endorsed expanding deficit spending in the past. We anticipate this messaging will persist in the months ahead, potentially injecting more money into the economy.
We believe high quality stocks are the best hedge to such a massive amount of government spending.
Model Portfolio Highlights
Growth Portfolio
We made no changes in April.
American Growth Portfolio
In April we sold Accenture and Edwards Lifesciences, replacing the positions with higher quality companies Moody’s Corp and Veeva Systems.
Income Portfolio
We made no changes to the holdings in April. We continue to hold high quality U.S. and global growth companies.
Small Cap Portfolio
We made no changes in April.
Across all portfolios we look for mispriced opportunities, considering only those with a significant margin of safety and minimal risk of permanent capital loss. After identifying such opportunities, patience is the most important factor in realizing our expected long term return.
If you have any questions about your portfolio, financial planning or investments please be in touch.
Thank you.
Yours,
Ben
Ben W. Kizemchuk![](https://advisor.wellington-altus.ca/stonehavenwealthmanagement/wp-content/uploads/sites/57/2020/06/ben.png)
Portfolio Manager & Investment Advisor
Wellington-Altus Private Wealth
Office: 416.369.3024
Email: bwk@wellington-altus.ca
Book a meeting
Ben Kizemchuk offers full-service wealth management for high-net-worth Canadians including families, business owners, and successful professionals. Ben and his team provide investment advice, financial planning, tax minimization strategies, and retirement planning.
Performance reporting disclaimer: Performance results reflect the returns of each representative model portfolio. Returns are calculated using each model portfolio’s monthly performance, including changes in securities values, and accrued income (i.e., dividend and interest), against its market value at the closing of the last business day of the previous month. Performance results are expressed in the stated strategy’s base currency and are calculated on a net of fees basis. Individual account performance may materially differ from the representative performance history set out in this document, due to factors such as an account’s size, the length of time the strategy has been held, the timing and amount of deposits and withdrawals, the timing and amount of dividends and other income, and fees and other costs. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security and no financial decisions should be made solely on the basis of the information provided in this document. This is not an official statement from WAPW. Please refer to your official WAPW statement for your specific performance numbers.
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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.