After a volatile February and March, which brought negative returns for the markets, we have seen some stabilization come to the financial markets. We anticipate the markets to recover from the down turn and hopefully move upwards to end the year on a positive note. It is good for markets that recent political headlines, such as NAFTA and U.S. & China trade negotiations, and tensions with North Korea, have been subsiding. That combined with recent strong company earnings reports and with summer approaching which is usually a slower period in the markets; the markets should be stable in the short term.

In saying that, market dips and volatility can creep back at any time. With the outlook for interest rates on the rise, thus costing companies and individuals more money to secure and maintain loans, as well as the flattening of the yield curve, which has been a leading indicator for recessions, and it being late stage business cycle; turbulence could occur in the markets at any time. Plus political issues are always just waiting to happen especially when no agreements in the current ongoing negotiations have been made.

 

Our Two Year Plan Is In Place

We have constantly been analyzing economic news and we are confident with the portfolio we have put in place to maneuver through any volatility that occurs during the next couple years. As previously mentioned, we have created a customized structured product that will shield against downside in the market while also participating in the upside, we have reorganized our fixed income portfolio with discount bonds from strong companies, and we have taken advantage of buying a handful of stocks in the down market. Meanwhile we still have approximately 5-10% cash waiting on the sidelines that we will put to work as we find more buying opportunities.

 

Cleaning Up Accounts

You may have noticed that when your accounts have transferred over to RBC Dominion Securities some of the securities did not transfer over their book cost and some U.S. securities did not transfer over to the right side of the account. Specifically for any registered accounts mainly because Scotia did not have U.S. dollar registered accounts and RBC does. So you will see your U.S. securities move over to a U.S. dollar account. This actually works better for you because there will be no FX spread taken on U.S. trades.

We are currently in progress of updating these but we just wanted to make you aware that if you notice any difference in your next statement, it is most likely because your U.S. securities are no longer showing up in the Canadian side of the account. So your monthly statement may have two parts, one with Canadian holdings in Canadian dollars and another with U.S. holdings in U.S. dollars. In addition to your monthly statements, those with discretionary managed accounts will receive a consolidated holdings report quarterly showing an overview of all your managed accounts in Canadian dollars.

If you are ever wondering about your accounts before these statements arrive, you can always access up to date information by logging into your accounts online.

As always, if you have any questions please feel free to contact us. And if you have any family or friends who are looking for financial advice please let them know that we are always willing to help.

 

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