Take Some Time to Remember This Weekend
Hi, !
Before I get started, I just want to apologize to anyone who received the newsletter twice last week. I noticed the title said anyone with mortgages coming up before 2024 and was supposed to read before 2025 - I tried to changed it and ended up just resending it to a large number of you. I won’t make that mistake again!
This Remembrance Day feels different than any I can remember. As we all take time to remember those who have fallen and the sacrifices that have been made in conflicts, it feels as though history is once again repeating itself.
As the world seems on the precipice of a greater conflict, there’s also a very narrow rope we seem to be walking when it comes to the economy.
Yesterday the Federal Reserve Chair, Jerome Powell, hinted at raising interest rates as well as keeping close tabs on potential losses with the US banks. After a rocky three months, we started to see a rally around Halloween, but have now started to give back some of those gains. Having a defence-built portfolio could really prove to be important in the coming months.
Our team just released it’s October market commentary, which you can find here. We have a new CIO as well as a brand and marketing team that is trying to bring this information to you in the most digestible way. The market commentary has always been written by our Portfolio Management team who are all very smart CFAs and sometimes forgot that we’re not all CFAs. Our commentaries now go through the lens of our marketing team to ensure that us normal folk can read and understand it as well. I encourage you to have a look and let me know if you like the new look!
If you just want the highlights, here they are.
As I mentioned already, the S&P 500 and the TSX both had their third consecutive negative month, with the conflicts in the Middle East playing a part in oil prices and the US/China tensions causing uncertainty around technology.
Bond markets, on the other hand, rallied towards the end of the month, but there is still much volatility with longer term bonds. In all this craziness, we did see a movement towards gold as a safe haven.
This might all sound scary and unsettling, especially if you look at the inverted yield curve and how a recession follows each time it “un-inverts”.
Having an actively managed portfolio that can make decisions in real time without having to follow rigid rules of having a certain amount of money in a certain fund (if they make and sell the fund, they’re going to want you investing in it even if it’s not in your best interest) allows us to be more nimble.
Our process is also designed to protect on the downside. What does that mean? We have designed (and hired our team) to run our Watermark Private Portfolios in much the same way pensions run their funds, which is to not lose you money (I have a video on this here). We have started to underweight our fixed income as we realize that there might be another interest rate raise (and we might miss that), but we also realize the more likely move is down. We’re ok to give up the very top to protect you on the inevitable downswing. We also moved some of this allocation to gold (before the upswing) as we saw the uncertainty and were able to take part in this rally.
With everything that is going on in the world and as we take time to remember those that have sacrificed for our freedoms, you can also take a deep breath knowing that with all the uncertainty that is happening in the world right now, your investments are in good hands. You have worked hard, made sacrifices to put money aside when you could have spent it, and have already weathered too many of these uncertain times. We take your family’s investments and financial future seriously.
Have a great weekend,
Trevor
PS Check out the new Wealth Building video (here) or on our Facebook page!
PSS We currently have room for a couple new clients this quarter and have found that forwarding this newsletter has been a great introduction to our team.
