Fall 2020



Sadly, Summer once again draws to a close. These past few months have forced many changes upon us. We remain in fear of the ongoing effects this virus may have on our
loved ones and the many others that have lost jobs, businesses, and freedoms.
We, the people, have become divided against each other through the political
opportunism and short-term vote buying schemes of those we have elected to lead
us. Laws and societal norms have been disregarded. Parliament has been closed during
a time when public scrutiny and debate is most needed. In my opinion, we have
not been this poorly served in the leadership department for many years. The
time is right for us to support our industries for the jobs they provide, the
education of our students, the development of new technologies, the people who
enforce our laws and those that care for our sick and elderly and support our
families. Almost all of us have the same needs and, in that way, we are equal
in our need for responsible and principled leadership. I believe that building
communities and reuniting the population against the problems we face in
society will make solving those very issues easier.

However, the news is not all bad.

One question that I am often asked is “How are the cows?” I can report that this has been a good year to be a cow. Lots of rain has left them enjoying lush hay, temperate
weather conditions and a good supply of fresh water. Cows like nothing better
than the social distancing opportunity offered in a big field. In fact, cows
are often “Outstanding in their Field”.

This has been a great year for all of us gardeners as well. The interest in and
importance of growing some of your own produce has returned, it comes with the satisfaction of providing for ourselves, friends, and families.

Home repairs have been a great way to deploy some of the entertainment funds we have not been able to spend. What better way to invest in yourself and with the kids at
home, create a teachable moment! Learning some basic repair and repainting
skills goes a long way in building equity in the home and confidence in the
kids to take on these necessary projects when they are out on their own.

The requirement to social distance and, where possible to work from home has led
many families to access the great outdoors. Reconnecting with bikes, tents, and
roasted marshmallows. A little less screen time can not hurt either. As the
frantic pace of our lives slows, time for our families has expanded and
potentially family sizes will follow.  

The pandemic is not permanent. Like all other crises, this too shall end. People will return
to their jobs, students to their schools and the cities with their hospitals,
galleries, shopping centres, and entertainment. 

Central banks forcing interest rates down is providing us with great opportunities to lock in long term mortgage rates at near zero prices. With everything that has happened in the past few months all the old rules still apply. With record amounts of money borrowed by the government, taxes will need to rise to repay it.  Review and/or make a financial
plan. Understand what you realistically need to set aside each year to achieve
financial independence. Pay yourself first. Live on less than you make. Pay
down debt. Make the largest contributions that you can to your RSP and Tax-Free
Savings account. Make sure your investments are balanced and properly
diversified. You do not need to take on too much risk, it is time in the market
not market timing that will generate the best returns over time. Finally, your
children receive little if any financial education in the school system. Make
sure that they are part of your plan and involve them in understanding what is
needed to make good financial decisions. Have a lawyer update your Will and
include Enduring Powers of Attorney. Have your financial advisor assist you to organize
and track your finances.

Remember that there is a difference between being rich and being wealthy. Rich people
feel they need to spend money to show people how rich they are. Wealthy people
care less about how others see them and more about independence. Wealth can be
defined as the ability to do what you want, when you want, with who you want to
do it with and, for a long as you want to.

While the markets have been jumpy this year, the overall effect of the pandemic has not
had a material effect on properly diversified portfolios. As seasoned savers,
we understand that markets are always going up and down and that over a
reasonable timeframe they mostly go up.

We value your trust and appreciate your loyalty and we continue to look for the best ways to look after your needs. Enjoy the next season and the extra time with your family that the pandemic has provided.

All the best,

Don Stone

Moving Forward Through Uncertainty

 The sun is slower to rise, the air is cooler, and the earthy green colour is turning slightly brown. Summer is always short, but this year it seemed exceptionally so. By mid July we had experienced the worst recession in a century. As businesses re-opened post lock down, we saw a rebound of economic activity and rallying equity markets, sending the Nasdaq into double digits. This improvement should come as no surprise as we literally
turned the economy off in March and reopened it in May.

Global Covid-19 infections continue to hit new records each week and while the direction of the economy is improving, and the initial pace has been robust the overall economic outlook is dire and the trajectory of the months to come ahead remains uncertain. The
pandemic and economic lockdown were the catalyst that tipped the economy into
recession. This pandemic-induced downturn unfolded in days in comparison to the
2007/2008 recession which took place over a year and a half. The difference is
an exogenous shock, driven by a virus that has not yet run its course.

There are two main areas of elevated uncertainty. The virus and policy response. There is still much we do not know about the virus, yet everyday we are learning more about how it spreads, who is vulnerable, and what treatments may be effective. We know that places that tried to downplay its severity, reopened too quickly and or/refused sound
health policy have witnessed the virus return with a vengeance. However, the
persistence of the virus does not mean we should not continue to reopen
economies. Quite the opposite, we cannot afford to not get our
economies back up and running. In doing so we must make good choices along the
way. Physical distancing, face masks and handwashing are key.

As the pandemic unfolded through March and April, creating widespread panic, there was extraordinary policy response from both central banks and governments around the globe. Monetary and fiscal policy supports were rolled out in spectacular fashion, unleashing trillions of dollars to offset the adverse affects.

The market’s rebound from the depths of the mid-March pandemic-driven drawdown reflects optimism that businesses will continue to recover and that as a global society, we will find ways to manage the spread of COVID-19. In addition, government and fiscal
support measures for households and businesses continue to provide a strong
tail wind for many parts of the market. Nevertheless, economic activity remains
below pre-pandemic levels and significant adjustments are still needed for many
businesses to recover, presenting risks to the outlook.

Given recent unprecedented circumstances, it makes sense to remain true to your well-established investment plan, that take your goals and tolerance for risk into account.
Active managers have the knowledge and experience to take advantage of
investment opportunities as they arise and limit risks.

By adhering to the plan we have mapped out together, we have the luxury of being able to observe surprises in either direction in the context of a longer term strategy; and regardless of where markets go from here, such perspective is valuable-particularly the next time we are faced with strong volatility.

The past six months have been like no other. Being distanced from family, friends and loved ones is not human nature, we thrive on connection. So, while back to school and Thanksgiving will no doubt look different this year, we are resilient, and we will get through this together.  Know that we are here to help and value your trust.

- Allison Stone

The information in this letter is derived from various sources, including CI Investments, Signature Global Asset Management, Globe and Mail and Bloomberg.