Last year was an incredibly volatile year where almost every major index and market ended up being negative for the year. The global climate with regards to trade, interest rates and geo-political issues all helped to contribute to a very volatile and underperforming year. As we look back at 2018 it helps to remind us that markets do not go up forever and that it is important to ensure that portfolios are diversified and that a proper asset allocation is being followed. By being diversified and not having all the eggs in one basket, when the markets do sell off and are volatile, it can help to smooth out returns and help to mitigate downside. It is also important to make sure that you evaluate your risk tolerance and that quality fixed income, despite low returns over the past years, can help provide balance to portfolios when there is increased uncertainty and market disruption. These are factors that are key elements of portfolio management and something that I make sure are implemented for all clients.

 

The December 2018 sell off has also provided some opportunities to rebalance into other areas of the markets or to add to quality companies that have sold off steeply in large part because of market sentiment. When my wife goes to Loblaws she is always looking for quality food that is on sale and that is what the markets have presented us with today as some quality companies are now 20 to 30 percent cheaper than they were in the summer. I am not a market timer and by no means do I think that volatility has disappeared but you need to use these pullbacks in the markets to add or initiate positions in high quality companies that present value today. I have been active during this sell off adding positions in companies that have sold off and that do offer upside going forward which are now available at a discount. Volatility is here to stay and there are still many clouds of uncertainty in Canada and around the globe but you can still be active as a long term investor to find some opportunities to add value to portfolios.

 

We kicked off our 2019 seminar series with a great turnout last week where we discussed some important issues that people need to face with regards to protecting their estate and their lifestyles. We discussed some of the important factors that people need to look at with regard to will and estate planning, also addressed some of the concerns that people have with regards to powers of attorney. We also provided a quick overview on the Agent for Executor program that RBC offers where RBC is named as the corporate executor or power of attorney and how that can help to alleviate some of the roles of the executor. It can also help to ensure that estate is settled properly and in a timely manner and also takes the emotional element out of process for the family. We also briefly talked about some of the life insurance options that are available as well to protect your family and to also protect your estate. We were jointed at the session by an aging in place interior designer who outlined some options that she uses to help and protect people as they age to make sure that their home is a safe and a livable residence but still looking stylish.

 

All the best in 2019 and our next session will be on February 20th at the Baton Rouge restaurant in Scarborough and the topic will be a market update and forecast for 2019. We will be joined by a guest speaker from Picton Mahoney who will be providing some insights on the markets and what to expect going forward.