Difficult to believe, but US Election Day – November 3rd – is almost upon us.
It’s going to be a fascinating 53 days. We will see to what degree social distancing changes the nature of the contest, but I still think it’s safe to predict that this will be the nastiest election battle of our lifetimes – so far.
The United States and much of the world will await the outcome with bated breath. Facebook CEO Mark Zuckerberg even warned last week of “violence or civil unrest” after the election, and outlined the steps his company is taking to dampen use of its platform as a tool to organize that turmoil.
THE TWO BIG QUESTIONS
Around the virtual water cooler, my clients and everyone else are asking two big questions:
#1. Can Biden actually win?
#2. Can Trump actually win again?
As the election nears, I am being asked more and more for my prediction. So, here it is: I predict that not a single stock we own will be affected one way or the other, long-term, by the result of the US presidential election.
As an investor, I consider much of the political talk to just be noise.
We have Johnson and Johnson, and many other high-quality companies, in our portfolios. I ask myself: will J&J really be affected by who is in office? Will people buy less Polysporin if Biden wins? Or less Lubriderm or Listerine if Trump does?
The answer is no (although, regardless of the result, more Tylenol could fly off the shelves). Our critical success factor on November 3rd, for the next four years and beyond will not relate to who’s in the White House, but whether we own the right companies and the price at which we bought them.
Our portfolios are designed to withstand the unpredictability of the political and economic environments: we look for companies that will do well in any circumstances. We continue to focus on our perennial strategy of owning predominantly high-quality, dividend-paying companies in regulated industries – companies with strong balance sheets and business models we understand.
Our portfolios continue to outperform the market, with less risk than the market.
END OF YEAR PLANNING
Of course, we are always working to lower the tax bills of each and every one of our clients, something we are even more mindful of as we approach the year’s last quarter. As we mentioned in the August edition of Marche Monthly, it is crucial to have a comprehensive, up-to-date financial plan that seizes opportunities to keep taxes at a minimum. A plan, for example, that maximizes your RRSP and TFSA contributions. One that takes advantage of income splitting. One that leverages prescribed-rate loans and the strategic use of trusts, life insurance, and credit strategies that maximize interest deductibility.
Great news! If you’re our client, the appropriate mix of these strategies has already been explored (if your circumstances have changed, please reach out to consult with us). But have they been undertaken for your friends and family? We are always available for a complimentary, no-obligation consultation, to help the people close to you do this important planning.
WHAT’S YOUR WINTER STRATEGY?
Here at Marche Wealth Management our mission is: To uncomplicate your life by helping you navigate not just the markets, but also your personal life events.
Rest assured that your investments are on track. That said, this winter promises to be a challenging one, for many if not all of us, on a personal level. The colder weather and shorter daylight hours will mark a big change from the outdoor freedom we have enjoyed in what has been a fantastic summer (which still has 11 days left in it!). A second wave of COVID-19 could take shape, isolation from grandchildren and adult children may be necessary, lockdowns could occur, and an escape to a warmer climate will probably be off the table.
This is why I am encouraging all of my clients to decide on a winter strategy. What can you do this winter to stay emotionally and psychologically healthy? The other day I heard about someone who’s decided to write their memoirs this winter. What a great idea: it will take him out of the present moment, allow him to reminisce, keep him busy over a long period of time, make those long winter evenings seem a bit shorter and produce a permanent record to share with family and friends.
What projects can you embark on? What day, overnight or weekend trips could you take that are not too far from home? Who could you establish a bubble with, such that it’s safer to visit with friends and family?
Want to do some blue-sky thinking about it? I will be happy to receive your call or email.
PS you can see our mission and full brand foundation here:
https://ca.rbcwealthmanagement.com/Marche-wealth-management/our-brand-foundation
COVID-19 UPDATE
Dr. Theresa Tam, our chief public health doctor, says a slow but steady increase in the number of people testing positive for COVID-19 is cause for concern. This past Tuesday, she noted that the average daily number of people testing positive in Canada over the last week was 545 – a 25% increase over the previous seven days. The daily number increased every day over the last week, prompting Tam to remind us not to get complacent about our risk of contracting COVID-19.
Overall, in the last week, 3,955 people tested positive across Canada, and 28 people died of COVID-19. That compares to 3,044 positive tests and 44 deaths in the week prior.
In the United States, the number of new cases continues to grind lower. Other jurisdictions are also seeing progress in the form of relatively stable numbers, namely Australia, the African continent, and Russia. Elsewhere, some are grappling with high or accelerating new cases: India, Spain, and France, for example.
These trends do not surprise the market, which appears to believe that economies can function and even recover while the virus is out there.
The biggest news is that hope is building on the vaccine front. Last week, it was revealed that the US Center for Disease Control and Prevention asked all states to ensure they are ready to distribute a vaccine as early as November, should one be ready. It remains unclear as to if and when a vaccine will be approved, but the gesture alone understandably ignited a dose of optimism.
IT’S BUSINESS AS USUAL AS USUAL
The pandemic, in that it has required us to work from home, has not affected our ability to protect and grow your wealth. Even so, I am happy to be back in the office for at least part of each day. Whether at the office or at home, we always have the vast resources of RBC Dominion Securities at our disposal. We have Canada’s largest team of top experts including accountants, tax specialists, estate planners, lawyers and more. We are always ready to bring the best and brightest resources to the table, as appropriate, to serve you.
SEPTEMBER 11TH
Today is of course the 19th anniversary of the September 11th attacks. We thought then that our lives would change forever. Here we are, in 2020, thinking the same thing for a different reason.
What shines through to me is the ability of humans to adapt, carry on and even improve. I am more optimistic than ever that together, we will do so in 2021 and beyond.
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We don’t speak jargon. We’re all about uncomplicating your life, so we speak plain English. If there is someone you care about – someone who would appreciate this simple and straightforward approach – please feel free to share this message with them or put us in touch.
Want to discuss any aspect of this month’s blog, or any other issue on your mind? Have a story idea? I am always happy to receive your call or email.
Tyler Marche, MBA, CFP, FCSI
Your life, uncomplicated
tyler.marche@rbc.com
1-416-974-4810
www.tylermarche.com