Aesop's Wisdom

This article/newsletter was initially published April 2023. At the time, the advisor was not affiliated with iA Private Wealth Inc.

Happy Easter long weekend!

When I was young, one of my favorite go to books was Aesop’s Fables. Sometimes I think it was like another parent with its teachings. It might even be an idea for you parents or grandparents looking for a unique gift. It put me to sleep many a night. Likely, the fable most of us recall is the race between the tortoise (turtle) and the hare.

With all going on recently, and news feeds so much faster, I feel many of us are focusing too much on the extremes of the day and forgetting about the long game. Slow and steady wins the race. Folks, investing isn’t about sprinting to a finish line every day to start another race on tomorrow’s news. It is about methodically using an intelligent strategy, so you don’t burn out or panic, just as the hare did. Slow and steady wins the race. The tortoise knows much more about the road it is on than the hare that pays no attention to methods and patience.

I’ve had to remind many clients recently that, “Once an investor, always an investor.” The method is easy: build, maintain, utilize the assets for daily and hopefully pass some assets on to our hares…oops, heirs, lol. Even though some days we all want to “turtle” and hide ourselves from the dangers approaching us, I feel it is much more prudent to adapt to the environment we are in and have a stable, methodical approach to travelling the long road ahead. No shortcuts needed. As investors our road will change, but we never should leave it, take it for granted, or assume what we do not know.

As the fable goes, there will be times the hare (market/news events) will come back to haunt us and laugh in our face, and we will smile and know that our strategy works and needs not be altered for other's amusement or ridicule. There is no reason to be regretful or to panic. Only those without a method or strategy would do that, right?

I associate the hare to the day-traders and talking heads that seem to have all the information. Does anyone see that recession yet that they have all been talking about for over a year now? The hare is the guy at the horse races that tells you about his big win but seems to forget about the other nine races he lost at. I have yet to meet one market timer that can actually show me they are wealthy and make money consistently. Why then would we think that way?

Slow and steady wins the race. The turtle will always beat the arrogance of the hare. I don’t need a plan to divert from the road most travelled, just to come back to it and find another pothole or roadblock is in my way yet the turtle is already ahead of it. I just need a good map and method. Here is a chart showing missing the best days of the market. I also attached a more in-depth report from our team on navigating these markets.

 On to the road ahead:

1. Available soon: The First Homebuyers Savings Account. We have a list of clients interested. If you want us to add you, or a child, onto the list, drop Amanda or Carly an email or call, and we will be in contact as soon as the infrastructure is in place to open the accounts.

It is a great account. If there is no income to offset, and the contributor still has TFSA room, it may be better to use that room first if income will increase in future years. You can move the TFSA money to it in a higher income year. Here is the link on qualifications for it: Every dollar counts – Benefits, credits and programs – Canada.ca

2. Please do/update your will. You do have one. It is called government intervention if you do not have one. It seems unfair to burden others for the small amount of time and cost. Please call me if you need help with your circumstances. We can refer you to the right party. Someone has to start the conversation: Why women ‘need to take action’ and drive the estate planning process – The Globe and Mail

3. For those interested in a more in-depth approach to the road ahead, Raymond James is hosting an event April: Client Insights – Navigating the Current Economic Landscape: Opportunities and Challenges for Investors – Webinar Registration – Zoom

4. With higher interest rates, we may be able to help you invest or work to bring down mortgage/debt costs. With Manulife Bank, I have an unbiased and client-focused approach. I also have a few good mortgage brokers I can refer you to if you want to go that route. Here are a few links: There’s more to a mortgage than the rate. – YouTube and Investment Savings Account – Manulife Advisors

5. I believe there is no recession to see here, people. I do see things slowing and cracks forming, but things are not near as bad as the media is telling us. From Capital Economics: GDP rose strongly in January and the preliminary estimate points to another healthy gain in February. That strength suggests the Bank of Canada will use its April meeting to reiterate that, despite the recent issues in the US and European banking sectors, it is still prepared to raise interest rates again if needed. The 0.5% m/m rise in GDP in January was better than the preliminary estimate of a 0.3% gain, although a bit lower than our forecast of a 0.6% m/m increase following the strength of the subsequent data. The gain was broad based, with GDP across the goods industries rising by 0.4%. There was a 1.1% increase in mining, oil & gas extraction GDP, a weather-related 0.7% m/m rise in construction activity and a 0.7% increase in manufacturing GDP, as supply shortages eased. Services GDP rose by 0.6%, with the increased availability of motor vehicles driving retail trade GDP up by 1.0% m/m. Activity across the high-contact service sectors also benefited from the unseasonably mild winter weather, with accommodation & food services GDP jumping by 4.0% m/m.

The big surprise is that, despite the early estimates showing declines in manufacturing, wholesale and retail sales in February, the preliminary estimate points to another strong 0.3% m/m gain in GDP last month. Stats Can suggests that was partly due to another rise in activity in the oil & gas sector, while the mild weather continued support activity in several sectors. Either way, that gain suggests the economy is heading for growth of about 2.5% annualized this quarter, slightly higher than the 2.0% gain that we have penciled in and a notable improvement from the stagnation last quarter.

Don’t forget there will always be forces pulling markets both ways. That is what drives investing. As humans, for some reason we seem to focus more on the bad than the good. Aesop had it right. We should follow the advice and methodically move forward with purpose. It is great advice for our lives. Here is a link to the book, but if possible, please support a local business/bookstore: Aesop's Fables Hardcover: The Classic Edition By The New York Times Bestselling Illustrator, Charle..., Book by Aesop Aesop (Hardcover) | www.chapters.indigo.ca

Have a Happy Easter!

Cheers,

Steve

 This e-newsletter has been prepared by Steven Switzer and expresses the opinions of the author and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable, but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. This newsletter is intended for distribution only in those jurisdictions where RJL and the author are registered. This provides links to other Internet sites for the convenience of users. Raymond James Ltd. is not responsible for the availability or content of these external sites, nor does Raymond James Ltd endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same privacy policy which Raymond James Ltd adheres to. Securities-related products and services are offered through Raymond James Ltd., member-Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member-Canadian Investor Protection Fund.