November 11th... A Time To Remember.
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 2020.
Lifeview Financial,
Deb, Kelly & Gary
Research Dimensional US Presidential Elections 2020
Helping Hands Scholarship (the “Scholarship”) was established by six colleagues. Financial advisors ‐ Deborah Kohlsmith, Gary Elder, Kelly Wood and Alfred Redmann of HollisWealth, a trade name of Investia Financial Services Inc. (“HollisWealth”) and Investment Advisors ‐ Shane Nixon and Kim Seipt of HollisWealth, a division of Industrial Alliance Securities Inc. (all are the “Founding Advisors”). In addition, the Scholarship receives generous donations from Mark Rocklin, Regional Vice President – Ontario of Investia/HollisWealth and Stacie Fischer, Regional Vice President of IA Securities.
The intention of the Founding Advisors when establishing the Scholarship was to encourage and assist young people to pursue post‐secondary education. We believe that post‐secondary education is the foundation to a better future and we are delighted that we can continue to help young people realize their full potential.
Helping Hands Scholarship consists of two cash awards: 1st place ‐ $3,500 cash award
2nd place ‐ $2,500 cash award
Applicants for Scholarship monies must meet certain criteria – see below.
Selection Criteria:
Applicants for Scholarship monies must (i) be entering a 1st year undergraduate University or College program or be an Apprenticeship student, starting their program any time during 2020; and (ii) be an immediate family member (specifically ‐ son, daughter, niece or nephew, stepdaughter or stepson, or grandchildren are eligible) of one of our current clients.
Applicants must submit an essay entitled “My Life Goals” which should be between 2000 and 2500 words in length and should address the following elements/questions: (i) Tell us about yourself and your community involvement; (ii) What inspired you to choose your career path or area of study? (iii) What do you hope to achieve in your career with your education? and (iv) How has the current pandemic impacted you and your career choice, and what have you accomplished during this unprecedented time personally? (NOTE: your essay should be the correct length and touch on each of the areas mentioned above).
The essay should ONLY be submitted to the following email address: helpinghandsscholarship@gmail.com and should include student’s name, who the student is related to (and the respective advisor), mailing address, email address, phone number, name of school the student is attending, and the name of the programme they are enrolled in (all are mandatory).
Only one application per family will be accepted in any given year.
Proof of enrolment and proof of attendance as a full time student will be mandatory (confirmation of payment and semester schedule would be required to be submitted) prior to the student(s) receiving any Scholarship money. Once we have determined the winners, we will request this information be submitted within a timely manner to be eligible for the award(s).
Selection Process
The essays will be submitted by email to helpinghandsscholarship@gmail.com – they will be immediately numbered and made anonymous. The selection committee (comprised of the Founding Advisors) will review the essays and rank them based upon the following factors: (i) Proper essay format, spelling and grammar; (ii) Content of the essay relevant to our established criteria; (iii) Creativity and inspiration and (iv) Demonstration of leadership & community involvement.
The Founding Advisors will be responsible for choosing the ‘winning’ submissions by a majority vote.
The presentations will be made at a pre‐determined location and time and there will be a photo opportunity for our partners as well as the recipients and his/her parents or grandparents. The winning submission and photo(s) will be included in one of our upcoming Newsletter (written permission will be required to include the winning submissions and photos in our future Newsletters – this is also a mandatory component of the Scholarship).
Helping Hands Scholarship is a charitable initiative organized, funded and administered by Deborah Kohlsmith, Gary Elder, Kelly Wood, Shane Nixon, Alfred Redmann and Kim Seipt in their individual capacities. Helping Hands Scholarship is unrelated to HollisWealth, Investia Financial Services Inc. and Industrial Alliance Securities Inc., which are wholly owned subsidiaries of Industrial Alliance Insurance and Financial Services Inc. (‘iA Financial Group’). iA Financial Group and its related and affiliated companies have no liability for Helping Hands Scholarship.
NOTE:
Immediate children of the founding advisors and their employees are not eligible for this Scholarship.
Application Deadline:
• The deadline for submissions will be August 5th, 2020 and the recipients of Scholarship monies will be contacted by email and/or phone no later than August 20th, 2020. The awards will be presented to the winners at a convenient time in the near future.
We are looking forward to receiving submissions. Best of luck to the students who will be participating. Should you have any questions regarding your submissions please don’t hesitate to reach out to us.
Health, Happiness & Success!
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:
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.
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
