Emotion is my enemy.
When it comes to investing, that is, because clear-eyed strategy and execution is the only way to succeed in that arena.
But in life overall – in my life, in my clients’ lives – it is very real. And it is something that needs to be openly acknowledged and managed, especially as we move closer to what could be a very difficult winter for a lot of people, including many people reading this blog.
As just one example: while it’s difficult to look at your investments when they are down, it is difficult in a different way to not see your loved ones for what could be months at a time. My in-laws have not seen my children in person in the three weeks since school started. Instead, they are FaceTiming them every day. They miss them dearly because they saw them all summer – inside our bubble, which burst with back-to-school.
So I am asking you, and I will continue to ask you through these upcoming colder and darker months, in which it will be more difficult to be outside as we did in summer: what are you going through? How are you doing? How can I help?
Here’s what clients have been saying to me so far: they want to know that we have a strategy (we do), that everything happening in the markets is a normal part of the process (it is), that they will be rewarded for being resilient and opportunistic (they will), and that they will come out of this stronger (ditto).
Here’s what really strikes me about the four points I’ve just written in the paragraph above: they’re a dead-on metaphor for our lives overall as we head into the winter:
1. We each need a personal strategy for getting through it mentally and physically healthy. As I mentioned in the September issue of Marche Monthly, I am calling it a winter strategy.
2. Granted, what we are going through with COVID-19 is not normal, but I think it will help if we can accept, to a degree, that certain restrictions will be with us for a long time to come. There will be a new normal, as we have all heard.
3. I strongly believe that we will be rewarded in our personal lives for being resilient in these challenging times and for taking the opportunity to do new things and take approaches that will keep us, and those we love, healthy and happy.
4. I am equally firm in believing that, with a well-thought-out winter strategy, we can come out of this stronger than before.
WHAT’S YOUR WINTER STRATEGY?
My winter strategy is simple. I will continue to focus on my mission: to uncomplicate your life by helping you navigate not just the markets but also your personal life events. Helping you feels good, and this year being what it’s been, you can understand that, in all seriousness, I have enjoyed my work more in 2020 than ever before.
I am working out almost every day in my home gym, spending time with my wife and kids, and of course doing Zoom calls with family members we don’t have under the same roof. I actually have not taken a complete day off this year, and will continue at this pace until travel restrictions loosen. Then…I am going to take my family on a fabulous vacation somewhere warm. For now, it’s fun just to dream about it.
WINTERCITY
So, what’s your plan? For inspiration, start by looking to a city that knows all about tough winters: Edmonton. In 2013, they established the WinterCity initiative, which has all kinds of ideas and programs for helping people get through the winter. By 2017, it had raised positive perceptions of winter by 44%.
You can check it out here. They have yet to roll out their COVID-friendly 2020 plans, but you can see from last year that they have creative ideas and toolkits for winter fashion, recipes, fun activities and much more – most of which can be adapted for physical distancing.
REMOTING
It’s also true that many people are dreaming of skipping the whole cold weather thing by escaping to a warmer, welcoming country. Barbados, for example, which offers a remote visa that allows you to work there for up to 12 months under certain conditions. Anguilla and Bermuda are offering similar programs. While Barbados has had only 190 COVID-19 cases in total and Anguilla only three, I have to point out that Canada is still advising against any non-essential international travel until further notice. We all have to assess the risks carefully, and put our health first, of course.
Auberge Resorts Collection is a hotel brand with luxury locations abroad – including in Anguilla – promoting the idea of “remoting.” As their Chief Marketing Officer puts it, “Remote with Auberge. For a week or a month, come work, learn and play with us this Fall and Winter. Take advantage of business concierges, private tutoring and nanny services so you and your family can be productive while enjoying all the amenities of Auberge in a spectacular setting that will inspire you.”
Whether you’re serious or just dreaming, have a look at their video and you’ll feel like you’ve been on a mini-vacation.
PLANNING IS MORE IMPORTANT THAN EVER
Want to talk about your plans? Please do not hesitate to reach out for a discussion. However you ultimately decide to handle winter, I urge you to have your plan ready in advance.
Our long-time plan for the markets has been to own predominantly high-quality, dividend-paying companies in regulated industries. Companies with strong balance sheets and business models we understand. In this way, our portfolios are designed to withstand the unpredictability of the political and economic environments.
As a result of this plan, our portfolios are doing well. Because your portfolio is carefully hand-selected, it is not the market – and so it continues to outperform the market. We have managed to avoid many dangers in the market – for example, those companies that have not been prepared for the new remote reality.
The companies that had done the proper planning – had ensured they were up to date on their technology platforms – are thriving, having achieved what amounts to a sustainable competitive advantage and thus higher profit margins, which we have seen reflected in higher stock prices.
As an example of these winners, we own Real Matters, which is digitizing the real estate market. Its stock is up 115% this year. We have also owned Mastercard since 2004, and Visa since 2006, and it will not surprise you to know that, with the sudden huge rise in touchless payment and the near-death of cash, they’re better positioned than ever.
Also positioned for success are the renewable energy companies, who have been a big benefactor of federal government support during the pandemic – because the government is using this as an opportunity to dictate energy and environmental policy. You can ask yourself: who is government going to give more money to in 2020, renewable energy or coal? We own Algonquin Power and Brookfield Renewable Energy (which is up over 40% this year). We really like how these two companies are positioned moving forward.
BACK TO YOU
Planning is everything. If you are feeling uncomfortable about the upcoming winter and/or any aspect of your financial plan – if you are questioning your risk tolerance for example – please reach out. It will give you peace of mind.
Every client for whom I’ve done a financial plan this year – and I have done a lot of financial plans – is still ahead of schedule. Not one has had to make any changes at all to their financial or retirement plans. Our plans, like our investments, are made with a margin of safety.
THE US ELECTION
As I shared in the September edition of Marche Monthly, the long-term effects on our portfolios of the upcoming US election will be negligible. That said, as we get closer to the election, I believe the markets will become more volatile, especially because of the growing possibility it will be contested. As always, we are ready to capitalize should the market drop – ready to buy selected, high-quality companies at discount prices. Then, once the US has an officially-elected leader, an atmosphere of certainty will settle in, removing much of that volatility from the market – regardless of who wins.
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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