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Hello there, I'm Mark Pearlstein. Well, here we are. We made it through 2021 and are looking forward to a better '22. I know we had all hoped we'd be back to normal by now. That didn't happen, so we're doing our best to deal with new challenges. But despite the uncertainty in 2021, the markets behaved like they were at an endless party. Take the S&P 500 as a filming. Up about 20% year over year, much of this was on the back of the tech and financial services sectors.

Of course, some sectors such as travel and hospitality were hurting, but many others roared ahead full of confidence. So where does this leave us in early '22? I think it leaves us with several groups of very expensive stocks trading at very high prices. So far, the music still plays, but everyone knows that at some point, all parties come to an end. Still, some of the revelers will begin to leave the party a bit early looking for cheaper sectors.

And so, there are three things, I think, we should pay attention to. The most obvious is that we're not done with the pandemic yet. New variants seem to spread faster than ever. And that continues to put a damper on the economy. But perhaps, the biggest issue isn't COVID. The second thing to watch is the decline in the rate of growth of money supply relative to the economy. Now, while this indicator doesn't garner big headlines, it does mean a reduction in liquidity, which is generally not good news for high-priced equities.

And finally, there's ongoing talk of inflation. If you believe the Fed, they say they have it under control. But that depends on everyone staying confident in the Fed and that could change. If there's even a whiff of greater inflation, it could easily prick the balloons of the high flyers. So where can we look for good value in the markets? I think it's time to shift our focus to sectors that haven't been in recent headlines such as old fashioned energy and mining, if you're comfortable owning them.

We still consume plenty of oil and gas, exploration is down considerably. So we're using what we have from existing sources. If you want to pick a mining example and believe the future is in electric cars, you might consider some of the copper miners. Electric cars use three to 10 times as much copper as conventional cars, so there will be growing demand.

And there's also good value to be had and well-managed consumer staples such as food producers and grocery chains, granted. Not as sexy as some of the areas in high tech, but profitable and more reasonably priced for future growth. Overall, I think we'll see more

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Hello there, I'm Mark Pearlstein. Over the past few months, I've had clients ask me for my thoughts on inflation. Should they be concerned about inflation in regards to their portfolio? It's a good question, and I can understand investors thinking about it. After all, if you've been to the grocery store, you'll have noticed that prices have increased, especially for fresh fruits and vegetables.

Energy prices are up, it costs more to fill up on gas, and for a while, lumber prices skyrocketed. So what does it all mean for your portfolio? The big factor in all of this is the pandemic. It has disrupted our lives in so many ways, including the supply chains that we count on to get goods to market.

We've all heard about the shortage of truck drivers and the holdups with container ships getting unloaded. That means products start to get scarce and prices rise. So should we be concerned? Most of the experts who watch long term trends believe that the inflation we're experiencing now is not permanent and it will correct itself as we get back to normal.

What signals do I look for to tell me where the economy is headed? I look at 10 year US Treasury yields and similar government of Canada bonds as longer term economic indicators. Generally, the higher the yield or interest rate, the stronger the economy.

Now, although the Federal Reserve and the Bank of Canada have announced increasing short term interest rates towards the middle or later next year, longer term bond rates are still below the levels that were there in the summer of 2019. Back then, both economies were strong prior to the pandemic. So, this currently indicates that there's still some slack.

Also, countries have taken on massive amounts of debt to help combat the pandemic. For these economies to service that debt, central banks will likely have to keep interest rates low. The consensus seems to be that inflationary aspects have been caused mainly by the pandemic and will recover from that.

So what about your investments? If your portfolio is properly diversified and balanced according to your risk tolerance, I would say leave it as is. However, if you'd like to review your portfolio, please get in touch. I'm always happy to talk, and I hope you found this discussion useful.

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Hello there, I'm Mark Pearlstein. Let's start with a question. As an investor, how well are you sleeping these days? Many investors are sleeping quite soundly. After all, it's been an excellent time for most investors with equities in their portfolios. Stock indexes seem to hit new highs or have been hovering near them every other day. And interest rates are low, which makes mortgages affordable, and that means the housing market is roaring. If you're a homeowner, your house has had a very good year.

And research shows that overall consumer confidence is high. That means people are optimistic about their future, and they're spending their money. You can see that it's reflected in robust car sales, and especially home renovations. Have you tried hiring a contractor lately? They're booked for months and months. So, despite the pandemic and the many problems it's caused, consumer confidence is strong. But in my mind, I sent some of you may be thinking that it's too much of a good thing. Many are wondering how long can this go on, or when will the music stop?

Valuations for popular equities are sky high, and yet most investors, large and small are staying invested because nobody wants to miss out. Sometimes I think of one of my father's favorite sayings, "When greed comes in the window, common sense goes out the door." So you have to ask yourself, where are we on the scale of common sense versus greed? And what is a prudent investor to do in times like this?

Well, my advice hasn't changed. You've heard me refer to the Pearlstein Relative Fixed Equity Ratio, also known as PRFER. It's a value-oriented strategy that I recommend to my clients because it works in both good and bad times. Essentially, PRFER creates a portfolio of three buckects. 30% fixed income, 30% equity, and 40% that varies according to your risk profile. It's the variable bucket that's the real secret.

It means your portfolio is customized to your risk tolerance. While I understand the impulse to want to profit as much as possible in the market is there, I still believe that your first objective should be to preserve your capital while growing it reasonably. That's why I like PRFER. If you'd like to discuss the portfolio and the markets, please get in touch, and I hope you found this discussion useful.

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Hello there, I'm Mark Pearlstein. I'd like to take a few minutes to honor my father, Al Perlstein, who left us in August, just shy of his 94th birthday. My dad was a role model for all of his children, his grandchildren, and I daresay many of his colleagues and those who knew him in business.

I have many wonderful memories of my father. Starting at age seven, I was allowed to watch him work in his den, evenings and weekends. But I had to follow three rules-- no eating, no talking, and no playing. What's a little kid supposed to do? Well, he had many magazines that he reviewed, and I would leaf through them, and I was fine with that. And I knew that he did it and I wanted to copy him. And so he'd work and I would quietly look at the magazines.

My father had many sayings that our family came to call the principles of Al. They tended to be lessons on life, family, and, not surprisingly, investing. For example, he'd say, "There are no shortcuts." He believed in doing his research, and read and read widely. Well, I learned that from him in his den. And the average person wastes six hours a day. My father was very focused on using his time wisely.

Now, this might give you the impression that my dad was all work and no play. Hardly. He was always there for many occasions with his family. And during golf whether, he was on the fairways three times a week.

And when it came to investing, my dad had a few stand-by principles. It's not what you make, it's what you save. It takes two things to make money-- money and patience. And the one that I particularly like is when greed comes into the window common sense goes out the door. Who can argue with those?

Right until the week before my dad passed away, we continued to trade articles about the markets. To say the least, he voiced some concern. He said, "Mark, at the end of the day, if everyone is all in and want to get out at the same time, the buyers aren't going to be there, and the bids will fall away." In other words, the lack of liquidity will result in a price adjustment until the buyers come back in. And so, as always, it makes sense to have an appropriately balanced portfolio that includes equities at reasonable multiples.

I think the word balance best sums up my dad-- modest, unassuming, finding the right balance between his family and his work life. And although Al isn't here in body, his legacy lives on in so many of us. And I know he'd be happy with that.

Thank you for watching and helping me honor my father. If you'd like to discuss your investment portfolio, please get in touch.

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Hello there. I'm Mark Pearlstein. Have you ever thought about the possible effects of leverage on your investment portfolio? Let's talk about leverage for a moment. Broadly, there are two types. The most obvious example of leverage is when investors have margin accounts. Having a margin account means that you can borrow against the value of the securities in your portfolio.

With this type of account, if you want to make further investments, your investment advisor will lend you the funds. That's leverage. Using the securities-- let's say stocks in this case-- you already have to make further investments. Used wisely, it can speed up gains in a portfolio.

Now this can be a good arrangement as long as your current holdings maintain or increase in their value. if they start to lose their value, you may get a margin call, meaning you have to deposit more funds to maintain your loan amount or sell some or all of the equities you bought to cover your margin. The risk in this type of arrangement is that you may be forced to sell when you don't really want to unless you quickly deposit further funds to cover your position.

Now that's leverage on a personal level. In a similar fashion, leverage is amplified throughout the market and can have an impact on your investments even if you don't have a margin account. That's because margin is being used not only by individuals but also by big investment firms.

Now these firms often make bets into the millions and billions of dollars when they are confident about the price direction for an equity. So you sometimes see a stock rise quickly with high volumes of it being bought. In many cases, this is because many of the shares of the stock are being bought on margin. The investors don't want to miss out. They feel confident it will keep going up, and so they borrow money to buy more.

Now this creates pressure in the market, and the stock continues to rise in price-- and sometimes to levels that makes little sense on a pure value basis. But leverage works the other way too. If the stock price starts to fall, this may trigger a cascade of margin calls forcing investors to sell quickly. This creates a downward spiral. With more sellers and buyers, and the stock continues to drop.

Now if you're following a stock closely, you may see this as a buying opportunity. Margin selling sometimes causes share prices to fall further, and they really should, which may be a great time to buy. Once all the margin sales have been washed out, prices often return to more fundamental values.

With a few searches, you can see how much leverage there is in the market at any given time. Overall, this is known as margin debt, the amount of money invested that is borrowed money. And with a quick search, you can find the charts that track margin debt. If you'd like to know more about market leverage or margin accounts, please get in touch. I hope you found this useful, and thanks for watching.

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Hello there, I'm Mark Pearlstein. Today, I want to talk about a phenomenon I call Flavor of the Month, and how some investors are tempted to go chasing after it. So what is Flavor of the Month when it comes to investments? Well, it's something new and something different, and because it's new it gets press and gets talked about on the internet, and inevitably someone is promoting it.

Now, I don't want to give the impression that I'm against new types of investments. I like learning about them like anyone else. But it's my job to vet them, to look beneath the surface and to understand whether they're worthy of consideration. To me, Flavor of the Month are new types of investments that seem exciting, but most, if not all, are extraordinarily risky.

Here's an example. You may have heard of SPACs, spelled S-P-A-C, for Special Purpose Acquisition Companies. They are publicly traded companies that have no commercial operations. They're also known as blank check companies. They've raised billions of dollars in financing and their mode of operation is simply give us your money, and we'll buy something within two years and make money doing that. Trust us.

Many SPACS have a celebrity attached to them to generate even more media coverage. So athletes such as basketball star Shaquille O'Neal and baseball legend Alex Rodriguez are the faces of SPACS.

It's not just SPACS though. There are many companies with sky-high valuations, little or no profit, and no obvious path to profit. They sound glamorous, and well, who knows? To me, these are classic Flavor of the Month. Some of them could turn out to become solid companies, but right now as an investor, your risk would be incredibly high. Just remember, it's the few success stories that make the headlines, while you rarely hear what happens to the rest.

I'll stick to my proven formula that I call The Pearlstein Relative Fixed Equity Ratio, or PRFER. PRFER Is an asset allocation strategy that manages risk in both good and bad times. In any investment advice that I give to my clients, I have two simple objectives. The first is to preserve existing capital, and the second is to make a reasonable rate of return as consistently as possible. Now I know, it's not as exciting as having a sports celebrity attached to my investments, but I like to sleep soundly. Let basketball players play basketball.

I hope you found this useful. If you'd like to discuss your investment portfolio, please get in touch. Thank you for watching, and I look forward to speaking with you.

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Hello there. I'm Mark Pearlstein. Let's talk for a moment about the various reasons we invest in the stock market. For younger people just starting to invest, their goal is often to realize big gains as quickly as possible. They'll typically read about companies that seem to be growing fast and hope to go along for the ride. Being young, they assume they can take the risk and have time to recover if their choices don't work out.

As we get older, our goals tend to change. Of course, we'd like our investments to grow, but we're also thinking more about protecting what we've already accumulated. So less risk, please.

As a wealth advisor, managing risk is at the heart of every discussion and every decision I make with my clients. Typically, as clients entered their late 40s and early 50s, they'll have built up their investments in personal and corporate accounts, as well as RRSPs and tax-free savings accounts. They're looking at the horizons for retirement. They want to ensure they can provide for themselves and leave a legacy for their family. Investments tend to become more predictable with less risk.

This is a critical thing to remember. For every investment, there's always a balancing act between risk and reward. But sometimes my clients have other objectives for their investments.

Here's a quick story. I've been working with a client who is in her mid 60s and has recently retired from work. At the same time, she came into approximately $2 million from her share of the sale of a commercial property that had been in her family. Her goal is to invest in such a way that she would receive a reliable income of about $55,000 a year, which is what she was earning before her retirement.

I looked at a few options with varying levels of risk. Of course, the key objective here is to protect the capital which provides the annual income. So by investing the $2 million in a diversified portfolio of dividend-paying stocks, she earned dividend income of approximately 3%, giving her about $60,000 annually. Having dividend income is also tax efficient, so that works.

If we wanted to, we could reduce the risk further by choosing to invest 70% in dividend-paying stocks and the other 30% in the fixed-income portfolio. That would give her about $54,000 annually-- a little less risk and a little less reward. We could decrease the risk further by changing the allocations of dividend-paying stocks and income from 70%, 30% to 50%-50%. That would produce about $50,000 annually.

These are the types of options I review with clients to find the best solutions for them. Perhaps using your investments to pay you an annual income would work for you. It's something to consider. If you'd like to discuss this, please get in touch. I hope you found this useful, and thanks for watching.

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Hello there. I'm Mark Pearlstein. As I'm recording this, we're still in the midst of the COVID-19 pandemic. And I'm happy to say that my family is healthy. And I sincerely hope yours is too. While the pandemic has turned everything upside down and caused great losses around the world, the stock markets seem to be behaving in a contrary fashion. Many of the indices are near or breaking records. Valuations remain near their highest level in 20 years. Price-to-earnings ratios on some equities are stratospheric.

How high can they go before the balloon bursts? Of course, no one knows. But we do know they can't go up forever. If you've been in equities for a few years, you should have seen good gains.

So why do I still recommend a balanced portfolio with about 60% in equities, 30% in fixed income, and 10% in cash and gold? Why not 100% equities? The one-word answer is safety.

Although the return on fixed income isn't anywhere near the best-performing equities, fixed-income assets, as a diversified group of investments, have provided safety in your portfolio. And given the world situation these days, I'm happy to have a good margin of safety in my clients' holdings. I like to emphasize diversity since we break it out, and people should feel they have a choice in their fixed income.

Let's take a look at what we might include in the fixed income portion of your portfolio. In addition to corporate and government bonds, I look to preferred shares that pay dividends. Now although the dividends aren't guaranteed, they currently pay in the 5% range. And they also qualify for an enhanced dividend tax credit, so your before-tax income will likely be between 6% and 7%. There are good exchange traded funds, or ETFs, that make it easy to get in and out of these investments.

Also, high-yield bonds paying the 5% range. From a risk perspective, I consider them similar to equity, so a small [? weighting ?] in them can make sense. Again, a diversified ETF can work here.

Many of my clients have moved into gold bullion from 5% to 10% of their portfolios. That gold has always been a safe harbor in troubled times. Most are closer to 5% in gold, but I'm comfortable with a bit more.

I also think it's a good idea to have cash equivalents available to take advantage of opportunities if there's a correction in the markets. So all in all, I don't think fixed income has to be boring while it's mostly providing safety and some income in your portfolio. If you'd like to discuss how fixed income can add a measure of safety and return to your portfolio, please get in touch.

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Hello there. I'm Mark Pearlstein. Well, there's so much to think about these days. But I want to take a few minutes away from the markets and away from the headlines to focus on something that's important to me personally. I'm talking about my father.

After 70 years in the investment business, and with the same company no less, my father is officially retiring. Amazing, I know. We had planned a party. But obviously, now's not the time.

So I just want to share a little about my father. In 1950, my dad started with Mackay Ross, which ultimately became RBC Dominion Securities. When I was a young boy, I would often sit with him in his den watching him work and catching up on his reading. It's no surprise to me that I followed in his footsteps and then enjoyed the bigger privilege of working alongside him for many years.

That gave me an unfair advantage over others in the business. You see, I had a direct line to my father's wisdom. I could watch him, listen to him speak with his clients. And so I knew that what he said actually worked. If I had a question, I could just ask. I saw that he's slow and steady philosophy meant that he took a real interest in his clients' lives. It was much more than just the latest stock offering.

My dad taught me so many valuable lessons in the investment world. One of his favorite sayings seems so simple, but it's actually quite profound. It takes two things to make money, money and patience. That really stuck with me. Having money set aside to take advantage of opportunities is something too many people seem to have forgotten. As for patience, I think that these days we could all use a little bit more of it both in the markets and in everyday life.

My dad is a very patient man. Over the years, I learned firsthand that he's also a man with his priorities in the right place. Even while he was busy with his work, there was always time for his wife and children, the families, sports and social activities, and his faith and his community. For him, all of this was critical to peace of mind and a well-lived life.

Today this way of thinking is helping me and my family through these unfamiliar times. We're also used to doing things to assuming we have control when sometimes it's just best to observe and wait. A few years ago, I wrote a book about my dad and his philosophies. It's called Balanced, the Al Perlstein Story-- Lessons from my Father on Life, Family, and Investing. I wrote it to honor my dad and to thank him for his guidance.

If you'd like a complimentary copy of this book and learn some of my dad's secrets to investing and living a full life, please get in touch. I've been very lucky to be the son of Al Perlstein. My family, my friends, and Al's many clients are fortunate to have him in their lives. Dad, we can't have that retirement party right now, but I'm still planning it. Again, thanks for everything.

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Hello, I'm Mark Pearlstein here to spend a few minutes with you. First of all, I was wondering how you're doing in this unprecedented time of COVID-19. I hope you're all well and safe and hunkered down if possible. I'm filming this from home right now. I've been locked down for quite some time. And I'm sure that you're looking as forward as I am to seeing the back end of this pandemic, which is truly a once in a century type of event.

Now, over the past few months, I've been speaking with every one of my clients to make sure that they're up to date and on track in these uncertain times. And what I'm going to do today is do the same thing for you by focusing on three important things you should check on your monthly brokerage or bank statement.

Now, in order to do this, I'm going to walk you through one statement by sharing a story about a client of mine and what she went through. Now the three important things are your beginning and ending account values, your asset mix, and your currency exposure. These things are usually found in the summary section on the first page of your statement, but you should know that no two statements are exactly alike. So in some cases, you'll just have raw numbers presented to you. Or in other cases, you may have numbers with some nice pie charts beside them, and as well the descriptions of all these things may vary.

So let's go back to my client who we'll call Rose. She's a very busy professional, and she's thinking of retiring in a couple of years. But let me say first that you can be a brand new investor who hasn't seen anything like this before, or you've been around and seen maybe several different market cycles. In fact, your statements will have mirrored the massive ups and downs in the markets that have just taken place. And especially in fact if you've owned stocks in your holdings.

Now stocks depend on profits, and profits have been impacted by COVID-19. And the initial solution to solve the problem which is this great lockdown we've been experiencing. Now no one feels comfortable with these huge historic swings up and down. And it's never happened before that the markets have gone down about 30% and up about 30% in about two months. But the good news is, there's still a good opportunity here to review and adjust your portfolio to make sure that it's diversified and aligned with your long-term investment and financial plans.

So the first thing to check are your beginning and ending account values. Now this may seem obvious to you, but it's worth mentioning that your monthly statement is a snapshot in time of your financial position. So Rose, about two or three weeks ago, gave me a call regarding a statement that she held with another advisor. And she was very concerned. This is what she said to me. She said, Mark, I can handle a bump down of, say, 10% or 15%, but 35%, that's like falling off a cliff.

So Rose emailed me her statement, and that allowed me to analyze her asset mix, which is the second thing you need to check. And asset mix is just another way of saying how much you have in stocks and bonds or how much you have in equities or fixed income. Now Rose's asset mix was really comprised of just mutual funds and exchange traded funds. And as I drill down a little bit, I could see that she was actually 100% in stocks. And that was the reason for the big decline in her statement.

Finally, the third thing that you need to check is your currency exposure. In Rose's case, her portfolio was 100% in Canada. Now having exposure outside of the country is very helpful because that just gives you more opportunities to invest because Canada only represents about 3% of the world's stock and bond markets. To summarize, by checking your beginning and ending account values and your asset mix and your currency exposure, you may be able to relieve a little bit of the uncertainty you may be feeling in this time of corona.

Now I've been speaking in general terms. So in order to take this a little bit further, what I'd like to do is offer the first three people a complimentary second opinion of your last statement. All you need to do is email me at mark.pearlstein@rbc.com. I'll come back to you within 24 hours to set up a time for a call where we'll navigate your statement together in this uncertain and challenging time for all of us. Until then, be well and stay safe. Thank you very much.

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Hello, there. I'm Mark Pearlstein. Reading about the financial markets, you may have heard the terms "fundamental analysis" and "technical analysis." Let's look at what they mean.

Like most people who follow the markets, I tend towards fundamental analysis. That means I look at the business, the sector that it's in, and then interpret the company's reports, such as income statements and balance sheets. I look at the Price Earnings ratio, or PE, the price of a stock over its past and future earnings, to determine its relative value at a point in time or against similar stocks in the same industry. A high PE could mean that a company's stock is overvalued or that investors are expecting high growth rates in the future.

I also take into consideration what is broadly called "market sentiment." What do the analysts, financial journalists, and big-name investors feel about a particular stock or bond? Are opinions improving or deteriorating?

This plays into market sentiment, which has an impact on the price. So in summary, fundamental analysis is just what it sounds like. It looks at the fundamentals and attempts to predict a direction for the price of a stock.

Now, on the other hand, technical analysis seems to ignore the fundamentals. It just considers the direction and momentum of a stock or bond price over a period of time. Technical analysts are less interested in what a share did on any given day, but more interested in its direction over time.

From technical analysts, you'll hear terms like "50-day moving average," "200-day moving average," "resistance," and "support." Technical analysts rely on graphs of closing prices over periods of time. Looking at these charts and applying various formulas, technical analysts try to determine which way a share price is moving, whether it will continue in its current direction or change course. They're looking for indicators whether they should buy, sell, hold, or wait.

Although you can view fundamental and technical analysis as two separate practices, I believe they're related. Think of it this way. Fundamental analysis attempts to answer why a stock price is what it is on any given day, whereas technical analysis looks at where it's going based on its history over a period of time.

I combine fundamental and technical analysis. I want to know the fundamentals first and then apply a screen, so I care about both. I think this is the most effective way to look at equities. First, understand the company, and then be aware of its history.

I've lived through numerous market cycles, and I've seen all types of behavior. I put that experience to work as I look at the markets during these unusual times. I hope you found this useful. Thank you for watching, and I look forward to speaking with you.

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Hello, there. I'm Mark Pearlstein. Today I want to talk about something that may be confusing for many people. We're living through a pandemic that's shaken up our world. Many businesses are operating at half speed. Small companies are shutting down. People are dying. And governments are adding trillions of dollars to their debt. Our American neighbors are also in the middle of a very contentious election with unpredictable outcomes.

And yet, with all of this bad news-- until very recently-- the stock market has been setting new records. How can that be? Let's have a look. First, it's important to understand that a few big companies account for much of the market gain. The Fab Five companies, which are Amazon, Apple, Microsoft, Google, and Facebook, account for more than 50% of the gain in the total market cap of the S&P 500 since June 2014.

In addition, big retailers are perfecting their online shopping services and growing market share at the expense of smaller competition. So we see companies, such as, Walmart and Home Depot recently showing strong earnings reports. All of these companies are continuing to grow during the pandemic. And that sways the whole market. And remember, the market looks 12 to 18 months into the future and makes a few assumptions.

Right now, the market assumes that we'll overcome the pandemic. It also assumes that the big companies will get bigger and that the added government debt won't have any impact on interest rates. Whether or not you agree with it, that's how the market sees it today. Of course, this could change at any time. One dramatic event could change everything, so given all of that, what should you do about your portfolio?

I'd suggest you do as you've always done. Maintain a well-balanced portfolio that meets your needs in terms of return. Review it on a periodic basis and make any necessary adjustments. You might consider adding Gold to your portfolio if it's not already there. It's a very traditional hedge against uncertainties. I've been buying Gold Bullion exchange traded funds for a number of months.

Gold recently made headlines when Berkshire Hathaway built a $500 million US Dollar position and Barrick Gold. Now, many of my clients have a 3% weighting in Gold. Back in the old days, Swiss Bankers would allocate 5% to 10% of a portfolio to Gold. So it's certainly a consideration. As always, keep your portfolio balanced and be ready for all markets. I hope you found this useful. Thank you for watching. And I look forward to speaking with you.

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Hello there, I'm Mark Pearlstein. Well, to say the least, we're living in a strange time right now. Our world feels upside down and our daily lives, retail, hospitality, and travel, have mostly been shut down. Governments seem to have billions of dollars to bail out corporations and support the general population and no one dares ask how this will be accounted for in the future.

Meanwhile, the stock market seems to buck the trend. Yes, there have been some corrections, but nothing like the disaster many had predicted. In fact, some of the big names are up from the beginning of the year. Microsoft is up 21% and Amazon is up 44%, as of filming.

So, what's happening here? More and more, it's becoming obvious that Wall Street isn't Main Street. Here's why.

Let's look at the S&P 500. This is a basket of 500 shares of leading companies, but if you look at just the five big tech stocks, that's Microsoft, Apple, Amazon, Alphabet, which is now Google, and Facebook, you'll see they account for 20% of the overall market. In other words, just 1% of the shares are 20% of the market and those shares have been doing relatively well. And that's what skews the picture.

Here's another interesting fact for Canadians. In Canada, we hear a lot about the energy sector and the price of oil. We see it reflected at the gas pumps. That's very Main Street, right? On the markets, the energy sector has dropped by over 1/3 this year in North America.

Not good news, especially in Canada, where that waiting is over four times larger than its US Cousin. But, it doesn't seem to have much impact on the Broad Stock Market Index South of the Border, because energy constitutes only 3% of that market. This makes the whole energy sector in the S&P 500 just a fraction of the five biggest tech stocks.

So, when you read about the S&P 500 in the headlines, it's important to really dig down a bit and look at the individual sectors. It's a good time to review your portfolio to ensure you're not too overweight in one sector. I know how tempting it can be to load up on a winning sector like tech right now, but often, this doesn't end well. We need to remember that some sectors are more cyclical than others. Technology, for example, has bigger ups and downs than consumer staples.

So, if you had a good run in the tech sector, it may be time to trim some of those holdings and lock in your profit. While we can't meet face to face right now, to go over the market and your portfolio in particular, I welcome your call or email. We can talk on the phone, or by video conferencing if you like. I hope you found this useful. Thank you for watching, and I look forward to speaking with you.

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Hello there, I'm Mark Pearlstein. Today, I want to talk about the upcoming American election and whether it may have any effect on your investment portfolio. It's impossible to ignore election news since it's in the daily headlines. So people have been asking me whether they should adjust their portfolio in any way because of it. Well, no matter who you think will win, I'd suggest that when it comes to your portfolio, you turn your focus elsewhere.

Think about this instead. At the time of this recording, the equities market has enjoyed its longest positive business cycle ever, 10 years, nine months. Now for the last few years, pundits have been calling for it to turn negative. But the market ignored that and has simply kept growing until very recently. Overall, it's been a great time for investors, but I do believe in market cycles, and at some point this market will change, regardless of who is in the White House.

Now, it could be that recent market volatility is signaling such a change. So what should you do? I look to the words of the extraordinarily successful money manager Howard Marks who said, "You can't predict, you can prepare." I found success for my clients by always being prepared and following good practices that are based on years of experience through all kinds of markets.

I work with clients to create portfolios with asset mixes that are balanced and are tied to each individual's risk tolerance. I call my formula "The Pearlstein Relative Fixed Equity Ratio" or PRFER. PRFER is an asset allocation strategy that manages risk in both good and bad times. I know that markets change, which is why PRFER has flexibility built in.

This allows us to make periodic adjustments and still maintain the balance that reflects your goals, your timeline, and where you sit on the risk-reward spectrum. There's no magic or crystal ball for how to prepare a portfolio for changes or market turbulence, just years of experience and good practices that have worked.

So getting back to the US election, my recommendation is to resist the impulse to make major portfolio adjustments based solely on US political developments. Keep your attention squarely focused on economic and corporate profit fundamentals. It's the earnings reports, the bottom lines that are the crucial drivers of equities rather than who is in the White House.

Keep your portfolio balanced and be ready for all markets. I hope you found this useful. Thank you for watching, and I look forward to speaking with you.

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Hello there, I'm Mark Pearlstein. I've been a portfolio manager and wealth advisor for close to 30 years, and I've lived through many market cycles and watched interest rates go up and down. Today, I'm going to focus on investing in a low interest rate world. That's the world we've been living in for the past 10 years with rates at historically low levels. The central banks don't seem to be in a hurry to raise them, and that makes it tough for savers and investors.

What do I think investors should do in this kind of environment? This may not surprise you but my advice is to stay the course. Yes, it's difficult to accept that the interest-bearing part of your portfolio is showing such low returns. But if your portfolio is properly balanced, your equities or stocks, as they're also known, have more than made up for it. Let's talk about a portfolio structure that can work for you no matter where interest rates are. I call it PRFER, the Pearlstein Relative Fixed Equity Ratio.

PRFER is an asset allocation strategy that manages risk in good and bad times. The goal is to try and achieve 2% to 5% above the rate of inflation over the long term. Even when rates are at their lowest, PRFER worked and it continues to work with the understanding of course that guaranteeing a future outcome isn't possible. Here's how PRFER is structured. The portfolio has there buckets. The first bucket, which should account for about 30% of your portfolio's value is a safety bucket. It contains bonds, GICs, and savings accounts.

This is the bucket that won't get you a great return these days but the principal and income are safe. In a minute, I'll tell you why you should keep this bucket and not turn it over into equities. The second bucket, which it also holds about 30% of your portfolio, is a growth bucket that includes equities. These investments potentially generate capital gains and dividend income. Over long periods of time, equities have been shown to outperform fixed income investments by a wide margin.

The third bucket, representing about 40% of your portfolio is where we can fine-tune your investment savings to reflect your risk tolerance. How you choose to allocate for the third bucket is tied to your age, your investment horizon, and what's happening in your life. Now let's get back to that first bucket. Even with its low yields, remember it's always been there to diversify, reduce volatility, and have a ready liquid reserve to buy quality stocks cheaper. It still serves a very important role in asset allocation.