WE ARE WELL-POSITIONED
As Winston Churchill once said, “Never waste a good crisis.” In that spirit, we see this as a time of great opportunity – the best since the financial crisis of 2008.
We are well-positioned to capitalize and come out of this even stronger. We take a comprehensive wealth management approach; that said, we are first and foremost portfolio managers. On that score, this has been one of the busiest months in our history – easily the busiest since the financial crisis. We have been responding to moving market conditions, digesting developments and making changes in our portfolios, so they continue to be positioned strongly for the months and years ahead.

Already during the pandemic, our clients have outperformed the market by double digits, because our strategy increasingly over the last few years has been to be positioned considerably more conservative than the market. I expect that our performance gap will widen moving forward, as – driven by your financial plan – we have cash (mostly short-term bonds and GICs), ready and waiting to prudently buy stocks at great prices and in many cases with very high dividends.

I do not believe that any business we own is at risk of going bankrupt, because we predominantly own regulated, dividend-paying companies with very strong balance sheets. Therefore, I do not believe that any of our dividends are at risk. For every company we own, I think that the negative effects of this crisis will be temporary – that they all have the financial strength to emerge on the other side of this period even stronger.

THE PAIN OF PASSIVE
I take no joy in pointing this out, although I really must as a point of ongoing education: many people who have been using robo-advisors and/or basically buying the market through indices and ETFs – the people who are passive investors and have been conditioned not to think – have been hammered by this crisis (and to make things worse, many are not getting the planning they so desperately need). The Canadian market is down over 20% in the first quarter of this year alone, and has only returned a meagre 1% per year for the last five years. This is considerably less than our portfolios, which have also avoided the riskiest parts of the market, such as oil and other commodities.
The losses we have avoided for our clients in just the past month vastly outweigh any funds the passive investor has saved on fees over the years.

GREAT CONVERSATIONS
The current crisis has also given me the opportunity to have many in-depth conversations with our client families. One of my key takeaways from these conversations is that, because of the financial plan we have created by partnering with our client families and other experts, not one client needs to sell any stock, for at least the next five years, to fund their lifestyle or other expenses.
I have been very encouraged at the confidence and awareness our clients are showing. Instead of asking if we should be selling anything, many clients are asking how they can transfer more assets to us – as they recognize there are stocks now for sale at greatly discounted prices.

THE NEAR TERM
What is the forecast for the near term? We don’t know how long this will last, but we do know it is temporary. The improvement, however, will not be sudden. The data tells me that things will get worse over the next couple of months, and perhaps in June or July, investors will resume evaluating companies according to their expected future earnings – something that, in the panic, people are not doing right now. And something that, as the market rises, will be beneficial to our clients and their portfolios, because we are buying carefully now.

AS ALWAYS
In the meantime and as always, our team remains highly accessible to you. Our service to you has not been negatively impacted in any meaningful way, and that will not change. Although we do have a busier than normal schedule of client calls, we will get back to you in a timely manner.
Our team has smoothly adapted and has been practicing self-isolation and social distancing for more than two weeks. Your access to our advice, whether it be our high-net-worth planners, estate planning specialists or multitude of other professionals, continues uninterrupted. Any scheduled meetings have simply been conducted online or by phone and conference call. For example, we have been doing will and estate planning reviews remotely, and financial plans that we were developing before the crisis have also been presented in this fashion, by conferencing in our team of experts including accountants, lawyers and others.

WE ARE HERE TO HELP
Through speaking with so many of you recently, we are aware of your concern for your friends, family members and colleagues. Some of you have also mentioned your concerns about the investments of institutions and foundations you are involved with.
Please know that my team and I will be happy to speak to anyone and provide a second opinion on a completely confidential, no-obligation basis.

TAKE GOOD CARE
Please take good care of yourselves. Continue to practice self-isolation and social distancing protocols. In many ways, this is a very unusual time – but with attention, we will come out of it stronger than ever before.

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We don’t speak jargon. We’re all about uncomplicating your life, so we speak plain English. If there is someone you care about – someone who would appreciate this simple and straightforward approach – please feel free to share this message with them or put us in touch.

Want to discuss any aspect of this month’s blog, or any other issue on your mind? Have a story idea? I am always happy to receive your call, email or visit.

Tyler Marche, MBA, CFP, FCSI
Your life, uncomplicated

tyler.marche@rbc.com
1-416-974-4810
www.tylermarche.com