Outlook

Paul Martin was Canada’s Minister of Finance in the mid to late 1990’s, when Jean Chrétienwas Prime Minister. When he came into office, Canada’s public debt had reached the dire and unenviable level of 100% of Gross Domestic Product (GDP), a level only previously seen in the aftermath of World War II. 

While we will never have all the answers needed for investing, the answers to three key questions will have a significant impact on the investing world. In this monthly update, David outlines these questions, the impact each will have, when he expects to have answers, and what investors should be doing as we await the outcomes.

Understandably, people are concerned that the market is going to go down. The impact of the pandemic has created a high level of uncertainty and we do not know what will happen with this horrible and persistent disease in the remainder of 2020 and beyond. However, what we do know is that trying to time the market is not the answer. In this monthly update, David outlines the steps we are taking to protect your portfolios.

David starts his monthly update with the aphorism “hours of boredom punctuated by moments of sheer terror” as an apt description of the markets so far this year. He includes some interesting charts to illustrate the extremes vis a vis prior periods and reiterates that our approach, as it has been in the past, was to not sell into a falling market. David also introduces 4 recent videos recorded by he and Barry which you can find below. Given that we have not been able to meet with you face to face, we thought that some short videos explaining our views on current circumstances may be of interest.

In this month's update, Barry indicates that, while the economic headlines are troubling and may very well continue to be so for many months, the stock market is forward-looking and is focusing its attention on the improvements in economic conditions that have occurred since April. Whether you look at gasoline consumption, railcar loadings or even the numbers of air travelers, you will notice the North American economy beginning its slow recovery.

Normally we discourage our clients from spending too much time worrying about the day-to-day gyrations of the stock markets, however, we felt that it would be worthwhile to share some of our thoughts with you, as well as the data for the month and links to essays you might have missed on a regular basis so we have created this monthly newsletter to keep you informed.

In his quarterly newsletter, David acknowledges that there is plenty we don't know about how the COVID crisis will evolve but we do know that the economy will not dry up and blow away. While it will contract by possibly an unprecedented amount and not all companies will survive, people will return to return to their prior way of life and companies will need to meet those demands.

David provides our perspective and approach in light of the recent market turmoil.

In his year end newsletter, David discusses why, while deep into the longest continuous period of economic expansion in U.S history, the markets produced remarkable gains in 2019 and what clues this can give us to possible future performance.