Part 3 Markets and Moves

Hello All,

Happy birthday to me, lol—though I must admit this tariff announcement has been the worst present I could imagine. It turned out to be far harsher than what was being projected last week. Markets were up just yesterday, fueled by optimism that the tariffs would be less punitive—but that was short-lived.

We can expect heightened volatility in the coming days as this situation unfolds. While some of the selling might be justified, much of it is not. For instance, why has DraftKings dropped from February 14th to today? Isn’t most of their revenue generated in the USA? Are sports leagues stopping play? MLB has just started its season with 30 teams playing 162 games plus playoffs. Consumers are still spending in this space, yet the market seems to have lost its way on some things. I don’t plan to do the same.

As I’ve reiterated in every email, we will adjust as needed, and I’ve done so today. I’ve moved 100% of ATL1626 and MFC8594/8142 into ETFs focused on U.S. government bonds (QTIP and QTLT). These small- and mid-cap funds are unlikely to perform well in the current environment, so they are now playing defense as trade issues evolve with many countries.

Additionally, I started a complete sell of VET today to be shifted into RUS. It may take a day or two to complete as we are large enough to move markets, so I need to do this in stages. Not only did the tariffs come out harder than expected, but OPEC announced it would increase oil production amid this turmoil: OPEC Accelerates Crude Oil Output Hikes. Gotta love OPEC!

We may make further adjustments in the coming days as this situation plays out, but this is a start.

Monthly Investors: This is a fantastic time to buy! You're getting a rare opportunity that only comes around every few years. Stick to your goals and plans. As Warren Buffett wisely said: "Be fearful when others are greedy, and greedy when others are fearful."

Retirees: We’re not moving out of dividend-paying investments. Remember, dividends provide much of your income, so fluctuations in market value are only on paper during volatile times. This strategy gives us cash reserves and flexibility to decide when (or if) we need to free up more funds. Selling units in this market is a last resort. For now, we rely on cash and yield—this is why I love this model!

Near-Retirees: You're benefiting from a buying opportunity with DRIPs (dividend reinvestments) and dividend income. There’s no need to panic. The 2008–2009 financial crisis was only about seven months long (September–March) before the recovery began.

I stated last email this is a weird "shoulder season" and markets tend to be more volatile when there are no earnings.

On upcoming earnings, which I look forward to: There has likely been significant onshoring prior to these tariffs, so many companies will be “buffered” for a while. Additionally, the last quarter was probably great for suppliers. However, the next quarter (or two) may see only essential imports as negotiations take time to progress. This situation will likely cause a slowdown—or even a recession (Canada may already be in one)—but it could end quickly with positive news. On the other hand, if this drags on, the economic impact could last longer.

I am sharing some timely slides below from my colleague at CIBC who showed great integrity today when I told him of my sell of his fund. He agreed it was smart to do in this shorter-term volatility. This is another reason why we use their funds for part of our investments. Integrity.

These slides should remind us of our goals being longer-term and issues come and go. I try to remind everyone that our time horizon spans the rest of our lives, not a few months, with hopes to leave a legacy for our heirs. This isn’t the first time I’ve navigated market turbulence, and we must stay sane in insane times. That’s exactly what I’m doing.

Courtesy: Edward Jones

It was only two months ago we were in the euphoria section. Today we are very far down on the cycle, if not right near the bottom. This has always been the slide that keeps me grounded when many of you were sending me messages on how fantastic things were. We will get there again. Patience, Grasshopper, patience (that dates me for sure!).

As always please reach out if you want to discuss anything. We are always here to help.

Cheers,

Steve

This information has been prepared by Steve Switzer who is a Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates. This content was fully or partially generated by artificial intelligence. The advisor reviewed the critical information independently.