Staying disciplined through an unusual period

May 15, 2020 | Elinesky Schuett Private Wealth Management


An update on the virus, implications of some comments made by the W.H.O., and thoughts on how we are staying disciplined through this unusual period. Plus, new 10-Minute Take podcasts and tax filing information.

Stack of small rocks in front of a lake

Stock markets were lower this week, though the decline was relatively tame. In this week’s note, we provide an update on the virus, discuss the implications of some comments made by the World Health Organization, and share some thoughts on how we are staying disciplined through this unusual period.

Coronavirus update

We continue to see a mostly positive, or declining, trend in new global case counts this week. In Europe, trends are lower with the exception of Germany and northern Italy, where there have been recent increases. In Canada, most provinces continue to move in the right direction, with the exception being Quebec, and Montreal in particular, whose levels have not seen as much of a decline. In the U.S., the state of New York continues to improve. But, there have been other states – Illinois, Massachusetts, Michigan, and Louisiana for example - whose numbers have increased and driven the country’s daily new case count higher. Lastly, in the emerging world, new cases continue to be elevated in countries such as Russia and Brazil, though they have not necessarily accelerated. Overall, the gradual reopening of the global economy – Europe, Canada, and the United States – has progressed with more districts, including parts of the state of New York, easing some restrictions.

Will it go away?

This week, officials at the World Health Organization warned that Covid-19, as it’s often called, may never go away. While alarming, the organization did go on to say the virus may continue to exist in our communities for years just as other viruses do while the global population builds natural immunity to it over time. Moreover, they indicated that treatments may also be developed in the future to allow people to more effectively manage the disease. A vaccine too, while more challenging, cannot be ruled out, particularly given the many efforts underway globally.

Implications for investing

Government restrictions are getting lifted around the world and the healing of economies has begun. But, it is hard to imagine life completely returning to normal any time soon, particularly if society has to accept the scenario described above. And so, while we expect economic activity, personal income, and company earnings to experience a rebound in the near-term as more restrictions get eased and people finally leave their homes, it may still be some time before economies are running at full capacity. In fact, our firm’s own economists expect the output gap – measuring the potential and actual output of an economy – to last well more than a year.

It can be challenging to remain disciplined through this period. This is particularly true because of the circumstances which feel unique. But, two considerations keep us grounded in our long-term approach. First, the resiliency and ability of human kind to adapt and innovate over time should not be underestimated. This has been proven through history with other devastating episodes such as wars, financial crises, natural disasters, and pandemics, among other things. Second, the earnings of most well run companies have a tendency of gravitating back to their long-term trajectories after periods of crisis, even if it takes a few years to do so. We believe these longer-term perspectives will continue to help guide us through the near-term which remains undeniably uncertain.

Audio commentary: Checking in on internet trends with Mark Mahaney

Top-ranked internet analyst Mark Mahaney, Managing Director with RBC Capital Markets, joins Janet Engels, Head of the Portfolio Advisory Group – U.S., to discuss the impact of COVID-19 on online trends.

The world has changed in ways we never thought possible over the last three months. A long-tenured research analyst, Mark has seen other paradigm shifts with consumer spending, advertising, and travel following 9/11 and the Great Recession. Mark will share his views on the impact of COVID-19 on online consumer spending, zeroing in on whether trends have shifted permanently and if new trends will emerge.

You can use this link to listen to the commentary: Checking in on internet trends with Mark Mahaney (approximately 15-minute duration).

10-Minute Take

There are two new 10-Minute Take podcasts available on our website.

Can business stimulus hasten the “swoosh” recovery?

Hopes for a V-shaped recovery – a short, sharp collapse followed by a bounce-back to pre-crisis activity – have been replaced by expectations of a “swoosh.” That is, a large drop followed by a slow incline. To bend the curve, Canadian policy makers have focused the latest round of relief on business. But how effective can these new measures be when much of the economy remains closed? Craig Wright, RBC’s Chief Economist, joins us with his outlook for the private sector and a broader recovery.

Cautious re-opening sets the stage for Ontario’s recovery

The COVID-19 crisis pummeled Ontario’s economy and forced more than 1 million people out of a job over the past two months. While the province has avoided the worst scenarios, the government isn’t taking any chances. It’s chosen a methodical and cautious approach to re-opening, meaning its recovery will be gradual as well. What implications will that have for its diverse economy? How might it handle potential global supply chain disruptions? RBC Senior Economist Robert Hogue joins us with the outlook for Ontario.

You can listen to both of these podcasts on > 10-Minute Take.

Tax filing and payment extensions

The extended deadline for personal income tax filing is quickly approaching and your accountant will be looking for tax documents associated with your investments. While you may be receiving your statements in the mail, or directly from us upon request, you can also safely view your tax documents through DS Online. If you'd like to view your tax documents online, use this link for information on how to sign up.

Please remember to request your Realized Gain Loss report from us directly. We can send your report to you through RBC Secure Mail or through DS Online.

Earlier this year, both the Canadian and United States (U.S.) governments introduced measures to postpone certain tax filings and in some cases, payment deadlines. Review the full list of details and deadlines in the article Tax filing and payment extensions in response to COVID-19.

Community Corner

Each week, we like to end our blog posts with a few good news stories from in and around the community. We hope that they brighten your day!

And finally… Although we are all doing our part by staying home, that doesn’t mean we can’t enjoy good theatre! The Stratford Festival is streaming a number of their productions online now at Enjoy!

As always, we are available to connect with you personally. Please don’t hesitate to contact us at 519-822-2024 or