Rhetoric Versus Reality

Hello All,

Couple of things to touch on today:

Recently, I have fielded many calls and emails on market concerns and Trump "perceived" policies. I want to share a "quick" ( if you know me this is as quick as it gets, lol) take on this:

Folks, he is still NOT in power for almost two more months! His book, The Art Of The Deal, clearly lays out his strategy of asking for a mile to get an inch. Please remind yourself of this as his thumbs become more active again on Social Media which then goes mainstream.

I have continually made changes as information becomes available and will do so moving forward. We are not going to make knee-jerk changes to portfolios because of a post put out to alarm people. We need to be sane, intelligent, and calm when we are presented with things that may alter our course. I will not react to rhetoric or political pandering until we have solid proof of what is happening on a real-time basis. Let the news prognosticate and put that fear into the people. We've gone down this road before and will adjust the vehicles as needed, but I am sure not going to switch to a boat while the ocean is 10 miles away! That would make us look very foolish being stuck in the wrong spot.

Also, many things can and will happen with upcoming policy changes. Anyone remember Keystone XL? Did Trump not sign an Executive Order to get that going as one of his first acts as President in 2017? Do you see how successful that was? A look at the history of the Keystone XL pipeline expansion | CBC News

Oh, how we thought that was going to happen and change the Oil world here in Canada. It did not. Let's work with what real information we have and not panic on what may or may not happen. Period.

Second, with our substantial gains over the last 12 months, I am also being asked what I am doing to preserve it? At present, we are all roughly 35-40% higher over the last year! So, let me pose this question: If I took you out at a 20% gain earlier this year but left your spouse (or friend) invested and they have almost double the gain now would you still be happy with me? I think not. You would be upset and think I made a very bad call. Your portfolio is dynamic. We are not here to try to pick tops or bottoms, we are here to manage cash flow, risk, and lifespans.

We are always working to grow and preserve the portfolio. For example, I made a change on Tuesday, Nov. 06 to place a hedge by taking out LYFT and moving to VXX in case chaos set in the next day after the US election. It was a clean win so I quickly reversed that trade first thing the next day, as it looked like there would be no riots in the streets. The insurance was not needed. Almost nobody saw that trade ( a few of you did, lol). It was roughly a -0.3% drag on the portfolios. I would do it again every single time. FYI, we were up 22% on the Lyft buy just 2 months prior. Since the reversal Lyft is up another 27%.

We are also starting to try to weight portfolios to a bit more dividend payors like REITS as interest rates, in Canada, come down and more folks will then chase yield in 2025 as GIC rates continue to decrease. How's that 4% GIC look now when you are up 40% in the same timeframe? 🙂

As I've said to a few of you, "Let's ride this wave and not jump off the board too soon".

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.