Investment Update

Since our update a week ago we continue to monitor the daily information on what is happening with the Coronavirus (Covid-19) and the investment markets. We wrapped up the latest round of information gathering with a conference call with IA Wealth’s Chief Economist, Clement Gignac this morning. Here are some key points to share with you at this time:

• If what China is reporting is true, new cases of Covid-19 have stabilized in China and the work force is gradually getting back to work. As you know the virus began in China and as such, they are the first country to see progress at containing and recovering from the virus.

• The virus is spreading in other countries – those countries are all significantly ramping up their efforts to contain the virus. Both Canada, the US and Britain have announced large stimulus measures to support the health industry to contain the virus.

• The markets will stabilize when the future becomes clearer with actual data. At this point we are not sure if we will officially go into a recession (which is two consecutive quarters of negative growth) or if we will narrowly avoid a recession. When there is uncertainty, without data, the stock markets are uneasy, and it is very normal to see the large daily swings as data (good or bad) becomes available.

• To further complicate things – Russia and Saudi Arabia are in an oil price war, with Russia wanting to keep the price of oil low to do damage to the US oil industry. On the negative side, this can have a significant impact on Canada as oil exports are a large part of our economy. On the positive side – low gas prices help to stimulate the economy for individuals and companies who spend a lot on fuel cost (you can see this reflected in the price of gas at the pumps). As usual numerous economic factors are intertwined and interdependent on each other. Also, on the positive side Saudi Arabi and Russia are talking and negotiating a solution as the low oil prices will hurt Russia in the short-term.

• As usual, the fund management teams are re-aligning their portfolios to the current conditions and taking advantage with their cash to find buying opportunities where they see fit. There are certain industry sectors that do better than others during an economic slow down period.

• Another factor causing volatility is the US election process. Who becomes the Democratic Nominee to run against President Trump in the fall US election will drive different market expectations.

  We have reviewed many of our clients’ portfolios to compare performance to the actual stock indices. In most of those instances our client portfolios are down less than half of the overall stock markets. We are expecting the volatility to be around for several weeks until the economic data becomes clear.

  Volatility & market corrections are an inherent component of investing, and that can make many investors uneasy. People are fond of saying that it is ‘different this time’ – the reality is it is not different this time, only the trigger causing this slow down is different. In the last quarter of 2018, we had a

correction in the stock market that was caused by a perceived China economic slow down, US/China trade dispute as well as rising interest rates. Those were the triggers that caused the 20% drop in the stock markets at that time. Those issues were addressed, and we ended up with a significant investment market rebound in 2019.

We have Covid-19 and an oil war triggering a slow down this time and we are unsure how far it will go. Measures are being implemented to correct those problems and eventually the economy will recover and come out of this economic cycle. As in the past we don’t panic and make rash decisions in the middle of a volatile period. We wait for things to bounce back and then examine how your specific portfolio reacted during that time period. If necessary, we make changes at that point in time to prepare for the next downturn.

In this current market environment, we would like to share with you a well written article from one of our partners, Franklin Templeton instead of re-inventing the wheel. Please click on the link below:

www.franklintempleton.ca/en-ca/investor/planning/investor-education/five-ways-to-deal-with-market- volatility

As we always say, market volatility is part of a long-term investment plan; however, should you have any specific questions about your personal portfolio please call us.

This years’ dose of market volatility brought to you by... COVID-19

Anytime we hear the old refrain “this time it’s different” or “don’t worry, this is just the same as before” regarding the market ‐ alarm bells begin to go off in our heads. While market volatility and corrections of 10% seem to have become more the norm lately that does not mean we should ignore them and just go merrily on our way. Neither should we panic blindly due to the media touting “largest point fall ever”, which it was, but as a percentage not so.

We have not seen a significant correction since the end of 2018 so, in a way you could say one was overdue and could just as easily been set off by this as something else. The cause of this volatility however is slightly different, and we are paying special attention to it. It could go away relatively quickly, and markets would likely rebound quickly... but it could also be prolonged and tip the world into a global recession which we would still recover from but might take much longer.

In general, many of our partners have been finding the market pricey as of late and difficult to find great new investments. They have been raising the amount of cash they have on hand over the last year to 18 months in order to look for company/stocks going on sale in market dips. It appears that although they were waiting for an opportunity like this, they are going to continue to be patient and careful before starting to buy in in this case. It makes us feel good that they are being extra careful. We would rather miss a little bit of the “sale” than rush blindly in without good data.

It is important to understand that the managers are constantly fine tuning the portfolios to reduce risk in areas of concern or increase/decrease cash holdings or take advantage of a market dip to get a good deal on a particular stock. This is not to be confused with taking large portfolio bets, this is done with a great deal of thought and research. They try to use short term volatility to actually increase their performance compared to the markets.

We are constantly receiving research from our partners. They take special care to make sure that when there is market turmoil, we get even more up to date research and thoughts from the managers and economists who help us manage your investments. As usual we are sifting through all kinds of research to make sure we are able to help you make the most informed decisions possible regarding your investments. We thought providing you some quotes from our partners might be interesting to some of you. The following are clipped from the hundreds of pages we have been through in the past week.

Eric Benner, Global and US equities Dynamic “it is important for us to remember that corrections are a normal (even healthy) part of functioning markets and occur in more years than not. There were two such corrections in 2018 (the latter quite deep), which provided an attractive setup for 2019” “over time if events turn out more benignly, we’re getting our shopping list ready” February 2020

David Fingold, Vice president & Senior Portfolio Manager for Dynamic “As is our custom we mitigate risk by raising cash. We have done this throughout our tenure. Similar to prior corrections we are looking for the signals that will lead us to put that cash to work.” February 27, 2020

Bill McCleod, Canadian equities for Dynamic “This is not a SARS‐like event and the SARS playbook is not applicable. The risk of “a recession driven by inventory correction and travel industry (with some associated financial distress) remains the primary downside scenario.”

“we remain on the sidelines generally, with high cash levels. We are waiting for either better entry points or better data.” February 2020

Oscar Belaiche, Head of equity income team for Dynamic “As always corrections don’t hit you between the eyes, they whack you in the back of the head.”

“Dynamic Strategic yield fund and Dynamic Dividend income fund have raised cash to over 10%.”

“our view in this environment would be to have a shopping list prepared ready to begin buying once we believe the Coronavirus situation is settling down, i.e. the 2nd derivative of change is “less bad”. Currently the situation is “more bad”” February 2020

Todd Martina, PHD Senior VP, Chief economist Mackenzie Investments ‐ “investors were initially reassured by China’s robust measures to contain the rapid outbreak.”

“However, the coronavirus narrative began to shift in late February as the contagion accelerated internationally.”

“Forecasting the short‐term economic impact of the outbreak is inherently uncertain given the unprecedented nature of the virus.” “As the spread of the contagion stabilizes, we expect a bounce in economic activity as global supply chains resume normal functioning.” February 27, 2020

Tye Bousada President and Chief Investment Officer Edgepoint wrote recently regarding market volatility reminding us that an investor who invested $100 in Berkshire Hathaway 55 years ago would now have approximately $2.7 million but........ there were 3 times that your investment would have been down more that 50%, there were 18 years when the stock performed worse than the S&P (11 of those years by more than 10%).

Further he comments on the “Absolute Dread” of watching investments go down in value and I quote “You’ve surely seen a video of a herd of gazelles being chased by a lion. They’re running for their lives. Most people feel that way in the stock market at some point during their investment journey. Prices are going down, panic sets in and there’s a stampede to sell. The stampede occurs because there’s very few things in life as uncomfortable as watching the price of something you own go down if you don’t know what the value of it is. Most people don’t know the true value of what they own, so dread sets in. The easiest thing to do is sell, so they join the stampede.

Here’s the positive side to the absolute dread – unlike the average participant in the stock market, we make it our job to know the value of the businesses we own and to take advantage of that dread. We certainly haven’t been perfect, but nothing in the past has helped us buy more growth for free than a good stampede. Here are some of the previous stampedes that you or someone you know may have found themselves in:

• The economic slowdown in the fourth quarter of 2018

• The U.S. debt downgrade of 2011

• The European sovereign debt crisis of 2011/12

• The U.S. financial crisis of 2008/2009

• 9/11

• The dot‐com bubble burst of 2000 to 2002

• The emerging market crisis of the mid‐1990s.”

  According to the CDC, in 2017/2018, in the United States alone 45 million Americans contracted the flu leading to 810,000 hospitalizations and 61,000 Flu related deaths. We only remark on the CDC statistic to remind us of perspective when considering current market upheavals.

During times like these, it’s important to remember that panic is a very human emotion, but never a good investment strategy. Market volatility and corrections are a reminder to review your objectives regularly, stay appropriately invested, stay diversified and stay the course.

As this communication goes out, we are busily re‐scheduling our calendars for updates, conference calls and webinars with all the fund companies so we don’t miss any new information we might need.

As always, if you have any concerns regarding your accounts please let us know how we can help you.

Health, Happiness & Success!

Deborah Kohlsmith, Gary Elder &

Kelly Wood

What's In A Name?

The financial services industry is a highly regulated one that includes many mandatory requirements. Compliance plays a large role in our day to day business. We are business owners, with overhead costs, etc. who are required to operate within these specific guidelines.

     As you are aware over the years our name on our letterhead has changed many times.   For Gary and Deb, we have been known as financial advisors with Regal Capital Planners; the owner Paul Rockel sold the firm to Cartier Partners, which subsequently became Dundee Private investors - owned by Ned Goodman.  When Mr. Goodman was ready to retire, he sold to Scotiabank.  Scotia named our firm HollisWealth, seeing as the first Scotiabank in Canada was on Hollis street in Halifax it made sense and the name stuck. 

     We had very much gotten used to HollisWealth as had you our clients.  In August of 2017 we were sold by Scotia to Industrial Alliance which has a few subsidiary firms underneath the main company - Investia Financial Services Inc.  being one of them. Recently Investia decided to drop the HollisWealth name to become more efficient as a company and low and behold we are now known as Investia. 

     Kelly took a similar path except he started his career with Hewmac, which was subsequently bought by Canadian First Financial Group (CFFG).   We have all ended up where we are today. 

     We are aware that so many changes can be very unnerving for our clients.  Logistically speaking over the years our letterhead has changed, our office signage has changed, our back - office systems have changed.  The constant in this change has been Kelly, Gary and Deb.  

     Change is inevitable in our industry.  We decided to do something about it more than two years ago to prepare for the next name change.  That time is now.   

     Welcome....Lifeview Financial - our trade name owned by Kelly, Gary and Deb. We spent almost two years creating this trade name. It was important for us to get it right. Choosing a name was very difficult as we wanted it to reflect us and our relationships with our clients.  From now on no matter what our Dealer’s name is, we will always be known as Lifeview Financial.  As a result of legal and regulatory requirements we also need to acknowledge our association with Investia.  On communications from our office to you will see both names and on any communication from our head office you will likely only see the Investia name. 

      Over the coming months we are going to introduce you more and more to Lifeview Financial - it is our baby!  Lifeview Financial is meant to revolve around our clients’ lives – where they are and where they want to go and our view on how to get there together.

     In summary, what’s in a name?  In our opinion it is primarily the people that matter most.  We are here to continue to provide our clients with exceptional service and to go above and beyond when and where we can. 

We hope this helps to clarify the ‘name’ issue and where we stand.  As always, we would appreciate your comments.  Rest assured - with more than 70 years plus of combined experience amongst us, we are here to help you and your family in achieving your financial goals and dreams at each of your life stages. 

Different Perspectives.... One Life View is our Lifeview Financial motto.

Tuning Out The Noise

Tuning out the Noise

Recently while doing research with a potential new partner in Toronto we listened to this video that we would like to share with you.  It is very fitting in the current environment we are in.  We are constantly being bombarded by opinions through traditional and social media channels. 

The video, entitled “Tuning out the Noise” is very consistent with our views.  

Take a few minutes and listen - let us know your feedback in the comments below.  We hope you find it interesting.

At Dimensional, we believe that the right financial advisor plays a vital role in keeping investors focused on what really matters. To find an advisor in your area, visit https://us.dimensional.com/individuals

Remembrance Day 2019

November 11th... A Time To Remember

Recently we took some time to visit the Beaches of Normandy (France).  Remembrance Day has always held a dear place in our hearts.  We, (Kelly and I) went to experience and reflect where many Canadians lost their lives, to experience where ‘it all happened’ – Omaha Beach and Juno beach (the Juno Beach centre and its tours are run year round by Canadian students).

We went to pay our respect trying to comprehend what ‘they’ did for us those many years ago.  Hoping we might have had the courage and fortitude to match theirs, had we been there that day. We went to remind ourselves of the gifts society so often takes for granted these days.  

The grey day was solemn, sombre, and yet eerily peaceful at the same time – like you would expect it might have been many years ago before war touched it.  This ominous experience allowed us to be very introspective and reflect on each of our lives and those who have gone before us.   Walking these beaches (Kelly actually walked bare foot in the ocean staring up at the cliffs) it was easy to imagine how enormous a task capturing those shores would have been.  Later walking through the thousands of solemn crosses in cemeteries - the cost was obvious, no longer needing to be imagined.

Hours later that day, walking alone along the cliff tops, in between quiet raindrops, silent together in our own thoughts… the sky surprised us, clearing to the most beautiful late afternoon sky.  Beauty after the storm……….. our grey day of reflection turning suddenly to breathtaking beauty….. a spectacular double rainbow.  It definitely reminded us of the wonder of what we have.  How life changes from dark to brilliance in a blink of an eye. Their sacrifice bought our peace.  It brought to light how important it is to stop and take time to appreciate what we have.

A lifetime goes so fast……. we hope to remember to take the time to appreciate every moment.

When you see poppies or wear a poppy this Remembrance Day, remember that we have the lives we have today because so many people gave their lives unselfishly for us to experience the freedom we have in 2019.

Kelly & Deb

-

 P.S. 75 years ago this year the allied forces stormed the Beaches of Normandy…..take time to remember….take time to teach a younger generation to remember.