Last week I read that to combat the blues of being homebound it is helpful to focus on long term plans.  So this week our family started focusing on where we could go on vacation next year (we hope!)  Lots of ideas have been floated around but the most popular choices involved warmth and sun - likely due to the cool, rainy weather we have been having.  We know many of you love to travel so we wanted to inspire you to start dreaming about or planning your next vacation with this article:  The Top 50 Bucket List Destinations in the World.  In the meantime,  Take a Virtual Family Vacation with these Amazing Travel Stories.

 

Market and Economic Update

What a difference a month can make. The month of April was one of the best on record for global equity markets, standing in contrast to the month of March which was one of the worst. Equity markets are still down from their highs earlier this year, but the recent recovery has been nearly as staggering as the decline. How can this be? Unemployment has soared by millions and activity has basically ground to a halt. Investors appear to be looking beyond the dire economic headlines, believing that central banks and governments have bought enough time with significant aid for consumers, households, and businesses. The hope is that as economies begin to gradually reopen through May and June, we will see a sharp acceleration in economic and earnings growth as early as this summer.

 

Markets can be forward looking, and reflect the anticipation of what is expected to come, not what is necessarily happening right now. When investor sentiment reaches an extreme, both negative and positive, it may not take much to change the trend. There’s a point at which bad news no longer drives market prices lower. Moreover, news that is simply “less bad”,  can actually lead to positive price action.

 

We continue to expect ups and downs along the way as uncertainty is likely to be higher than normal, risks of additional outbreaks remain, and some measures of social distancing are still required.  We have yet to see the worst of the economic data.  We expect to see extremely poor unemployment and GDP numbers for the current quarter due to COVID-19.  Even though these numbers are anticipated, they could have an impact on investor sentiment.  Just as we did after the meaningful decline in March, we need to remember to manage emotions, stay disciplined and remain focused on long-term outcomes. If you would like to read more market commentary and the impact of this black swan event please see our Spring Newsletter.  This article does a good job of illustrating the impact of staying th course and taking a long term focus in times like these.

 

In Canada, our financial sector makes up a big component of our equity index and is always a focus for investors.  Banks have been a good source of growth and income for client portfolios but in this current market we need to be on the look out for the impact of the COVID crisis, namely an increase in loan loss provisions.  In this podcast you can hear from Gerard Cassidy, RBC Capital Market's Head of US Bank Equity Strategy, to discuss Why the world's biggest banks are relatively stable in this crisis - so far

 

RBC has created a series of podcasts called RBC Disruptors that features thought-provoking conversations with Canadian business and innovation leaders.  In the most recent podcast, experts discuss how governments have been able to push out billions of dollars of support to Canadians through the COVID-19 crisis almost entirely through digital channels and what this could mean for a digital government in the future.  On this podcast is Alex Benay, Partner, Digital and Government Solutions at KPMG, and Hillary Hartley, Chief Digital and Data Officer for the province of Ontario Will the COVID Crisis Lead to a Digital Revolution in Government?

 

Financial Health

At Hayes Vickers Private Wealth we strive to have a complete understanding of everything that matters most to you.  The second article in our Spring newsletter (page 3) provides you with an activity that will help with Finding clarity in crisis.  It offers five questions you can ask yourself/spouse/partner/family to help establish what matters to you.

 

Part of your goals may involve traveling more. We all vacation differently and many Canadians have invested or are considering investing in a second property to enjoy with their family and through retirement.  This article outlines Succession planing for your Canadian vacation property  If you own property in the U.S. and want to better understand the key issues and potential strategies to minimize tax, read Canadian owners renting or selling U.S. real estate.

 

If you are a business owner and own all the shares of your business an estate freeze can help minimize taxes and provide you with flexibility.  Here is a short video on this topic: Estate freeze planning

 

We have daily calls with our team to ensure that we are on top of our clients needs and service. We all comment on how much we miss seeing you.  We just want to remind you that we can 'see' you to review your portfolio, review and update your financial plan or help you navigate DS Online - we are able to use secure video webinars where we can share our computer screens through WebEx.  It is easy to use and we are happy to walk you through it, we even had a couple in their 80s this week participate!  If you don't want to do a video chat, we are here for you by phone or email.  All of our contact information is at the bottom of this page. 

 

Just a reminder that if you have questions regarding any of the items below, Taryn, Pia (Alessandra), Karen and Steph are here to assist you:

• Set up and navigate your online account

• Request to withdraw or deposit funds, or move funds between accounts

• Process contributions to RRSP, TFSA and RESP

• Adjust your RIF or LIF payments

• Process any paperwork

• Request tax slips or information

• Address changes

• Set up a meeting with our team

We are also happy to provide support to your friends or family members that may be concerned about the current market situation.  We commit to providing a second opinion to the important people in your lives if they are feeling uncertain.

 

Below is a picture of Natalia who is enjoying working from her home office - I think it is because she has so many monitors!

Have a great weekend.