This week’s blog sees us a little more settled into working from home which has aligned with the markets also settling and the declines in equity markets starting to reverse. Kieron had been teasing me about the picture I used for last week's blog as it looked like people were praying for the markets to recover.  That was not my intent but the markets did have the best weekly performance since 1930s.

 

I have commandeered our home office for my workspace and Kieron has set up his work on our kitchen island. Many of you know that we just recently moved into a new home. We had downsized, which in light of being at home all the time may not have been the best move as our children are not enjoying all this new family togetherness. We moved at the end of February and had been complaining that it didn’t feel like home yet as we hadn’t really spent enough time at home. Be careful what you wish for, now we feel very settled and looking forward to being able to leave. I am sure we are not alone in looking forward to this health crisis ending and getting back to our normal routines.  We realize that everyone's stress levels are higher than normal as we worry about our health and the health of our loved ones. We would love to hear from you about how you are successfully passing your time and focus on some of the positives that might come out of being home bound. I can say for us, our house has never been cleaner, what you don’t see in the shot below is the spray cleaner and cloth that Kieron has nearby that he uses in between calls. I also have been spending my free time cooking, which I think will soon have to be replaced with more exercise.

 

Market Information

Earlier this week the Head of US Equity Strategy, Lori Calvasina, from RBC Capital Markets recorded a podcast: Coronavirus and the outlook for US Equities. Lori does a great job reviewing how we look at these type of market events. Keep in mind this was recorded prior to the equity market movement up. In this call she saw the S&P 500 2300 level as a point that we should watch. Interestingly on Tuesday the markets briefly breached this level and changed course moving up.

 

The following article summarizes RBC Global Asset Management’s Chief Economist, Eric Lascelles thoughts on a likely recession. Eric feels that the recovery could be quicker and stronger because policymakers have introduced extraordinary amounts of monetary and fiscal stimulus. It has been quite amazing to see both the size and speed of these aid packages when compared to the 2008/09 Financial Crisis, where governments took months to approve smaller packages. To learn more, see RBC Wealth Management’s article Reflection of reality

 

For our discretionary equity portfolios we were underweight Financials in Canada prior to the market downturn, which has proved to be a successful strategy. We did and still have some concerns regarding Canadian banks due to low interest rates and the debt levels of Canadians and the housing market, and the now added economic concerns due to COVID-19. We have maintained our underweight Financials but in Canada it is challenging to not be invested in Canadian banks given the composition of our markets. We know many of our clients are hesitant to sell their bank positions when we transfer in large positions. We believe the next 12 months will continue to be challenging for this sector. It is during these times of turbulence that we count on the dividends these stocks pay. This article reviews Are Canadian bank dividends sustainable? (spoiler alert: They should be - the banks are better managed, more diversified and better capitalized than ever)

 

Protect yourself

There has been numerous reports that there has been an increase in fraudulent activity related to the Coronavirus. CBC recent reported on some of the scams that you can read about here.  It is sad that people take advantage of stressful situations but it reminds us to be vigilant in protecting our data.  We wrote a blog about how to protect yourself in 2018 that has some great information.

 

Team News

We have a new addition to Hayes Vickers Private Wealth. Sarah Kilpatrick joined our team in February as an Associate Advisor. She will be working closely with Kieron and Nicky and our clients to support their wealth management needs. Sarah joins us from within RBC Wealth Management where she has worked for the past 10 years. We are excited for Sarah to be a part of our team and for each of you to meet her (once we can welcome you back into our office).

 

Please keep checking in with us and letting know how you are doing.  We are thinking of all of you and wishing for your good health.