Fall 2020 Investment Strategy Update

Mar 25, 2021 | Lauralee Bushan-Jazey


“The Brightside of 2020 being the worst year ever is that it will drastically reduce the amount of "hindsight is 20-20 jokes" next year.”


We hope that everyone is healthy and safe. We are always available to help you. While I wish 2020 were over, we still have two months to go. We are consistently assessing your portfolios and wealth management projections. We have the disciplined processes in place to help you navigate the financial impacts of anticipated events (retirement, sales of a business, and so on) and respond to unexpected events (pandemic, upsets in elections, illness).


Strategy Update Highlights

1) With ongoing uncertainty around the US Election and a potential second wave of COVID-19, we are conservatively positioned with exposure to equities, fixed income (with additional government bond exposure), alternative investments, a healthy cash position, gold, and increased portfolio protection.

2) COVID-19 transmission rates continue to impact economies and markets.

3) Central banks continue providing market support in Canada and globally. Canada has committed to government fiscal (spending) intervention, while we are waiting for another US stimulus package. (timing and size TBD, as election results finalize.)


Fixed Income:

We expect rates to remain near their historic lows, as indicated by both the Bank of Canada and Federal Reserve. We recently added more global bond exposure. In the past quarter, we increased the portfolio’s yield by adding preferred exposure using two managed ETFs – Horizons Preferred share ETF (HPR) and Dynamic Preferred Share ETF (DXP). Several preferred share issues were called/bought back by their issuing companies, which signals the beginning of a decreased supply of higher quality preferred shares. In the short to medium term, this should cause preferred share price increases, in addition to the portfolio’s increased income

Central banks providing a backstop continues to create a very favourable situation for the bond markets.

As well as adding bonds and preferred shares, we are researching liquid alternative positions and short-term highyield debt.



Our equities continued rallying throughout the summer, with a pullback in September. Many market indicators and portfolio strategists say the markets are fully valued. Some, such as the Warren Buffet Indicator, show that market valuations are stretched.

We also know that the sentiment around TINA (“There Is No Alternative” to equities due to low interest rates) and “Fear Of Missing Out” (FOMO) are also driving markets higher.

With that in mind, we renewed insurance/put protection to provide a partial safety net on Canadian equity holdings and US$ accounts with approximate equity exposure of $35,000 and up.

As of October 1st, about 35% of our Canadian Equities were insured/protected by a put safety net until November 20th . Sixty to 70 percent of US$ accounts with about USD equity exposure of $36,000 were partially insured/ protected with puts until November 20th .

We have taken some profits and are underinvested to our target equity weights. We have added new equity positions in place of those that met their sell targets. We anticipate that if there’s a large market correction, we will buy into the drop to get closer to our targets.



There are always opportunities with fixed income, equities, real estate investment trusts, cash, gold, silver, alternative investments, and currencies to buy and provide returns. The key is to be disciplined, avoid FOMO, and take profits when warranted. This is one reason we rotate into other assets and will be defensive when it is called for. We use this disciplined process to help our clients navigate the good times and the bad times.

For clients new to our Private Investment Manager (PIM) discretionary process: Please remember that you may have elevated cash as we transition your portfolios. This allows us the flexibility to buy on dips or when we identify investment opportunities.

We still see a continued monetary response from global central banks’ actions and global government spending/fiscal assistance being used during this crisis.

As always, we appreciate and value your trust. Stay well, stay safe, and do not hesitate to contact us.