For the upcoming long weekend and the "back to school" season, I'd like to share an intriguing chart. A significant component of our job with clients is aligning their objectives and deciding appropriate risk. Presently, the elevated yields available in numerous fixed-income offerings surpass the return targets outlined in many financial plans.

 

The following chart pertains to the United States, but it exhibits a similar trend in Canada. A decade ago, there was a considerable cost associated with the certainty that bonds provided. Essentially, opting for bonds meant committing to an unacceptably low return over an extended period:

 

 

Substitute U.S Treasuries for GICs or other products in Canada: it was the same.  Over the past decade, within the majority of our clients' investment portfolios, there has been a prolonged period during which the yields in fixed-income investments consistently fell short of the targeted returns outlined in our clients' financial plans. Consequently, we have consistently maintained a bias towards equities. I don’t believe that over the long term, fixed income will outperform equities (historically this has never been the case, and for good reason). We are seeing more and more opportunities to achieve objectives using non-equity investments. This will be a focus in the fall, as we reach out to clients.

 

It's the long weekend: back to school, and the exciting U.S. Open tennis tournament in New York City is always a marker for me that it’s the fall (as is the recent very cold nights and mornings!). A no-brainer repeat of Wimbledon is going to occur: Djokovic will lose to Alcaraz, and on the US side, Iga Swiatek will hoist the trophy.

 

Have a great long weekend.