To my clients:
First, an announcement. I will be taking December 19th through 27th off (inclusive), and back on December 28th. While away, I will periodically check my email inbox and monitor market developments. Further, there will be no weekly updates on December 23rd and December 30th. As always, Brenda will be available for urgent client requests during my absence.
It was a down week for North American stock markets with the Canadian TSX falling 2.6%; the U.S. Dow Jones Index falling 2.7%; and the U.S. S&P 500 falling 3.4%.
As clients will know, RBC’s current position is that there will be recession sometime in mid-2023. However, there are many other global investment firms which forecast that recession will be avoided and a so called “soft landing” will be achieved. This divergence of opinion owes to a still very resilient economy in the here and now (particularly employment) and leads me to suggest that even if there is recession, it will likely be mild. As I’ve also stated over the past several months, I believe markets have already priced in the effects of a mild recession. This in turn leads me to believe that 2023 will see continued market recovery, albeit with its fair share of challenges. Next week’s inflation report (via the Consumer Price Index) and the rate decision by the U.S. Federal Reserve soon thereafter should go a long way to setting the tone for how 2022 will finish and 2023 will begin.
Next week I will be executing select tax loss selling transactions for client accounts. In a recent telephone discussion with a client, I affirmed that losses would be taken only in situations where a suitably similar investment alternative could be sourced (i.e. quality bank for quality bank; quality utility for quality utility etc.). Positions which have unique investment characteristics that cannot be sufficiently replicated in another holding will not be sold. Further, the goal, as always, will be to maximize long-term returns. Tax-loss selling is a distant secondary consideration to this primary goal, so it’s conceivable that many clients might see minimal, if any, tax loss selling activity in their taxable accounts. Given the different cost-base of positions for different clients (largely driven by different entry dates into the discretionary program with myself), this process will be individually tailored to the circumstances of each client. I will be engaging in the same process for non-discretionary clients although, in this case, I will be calling with my recommendations.
That’s it for this week. Next Friday’s update will be the last until the new year. All the best,
Nick
Nick Scholte, CIM, FCSI
Senior Portfolio Manager
Scholte Wealth Management
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
Toll Free: 1.844.665.9900 │Email: nick.scholte@rbc.com
Visit Our Website: www.nickscholte.ca
We accept new clients primarily by referral from our existing clients. If you have family or friends who would be a good fit for our specialized wealth management services, please let us know.
Any recommendations herein are for the exclusive use of clients of RBC Dominion Securities and Investment Advisor Nick Scholte. Any other direct or indirect recipient of this email should consult with his/her own licensed investment advisor prior to implementing any investment action he/she may be contemplating.