October 2017 SWM Letter

In life many surprises arise, inevitably good, bad, or otherwise. While a crystal ball could help, the best we have are flat-screens, past experience, and common-sense to go forward.  We have succeeded well and I’m sure we will continue to do so.  Meeting together through the years we see our progress and also adapt to change in your needs or circumstances.  Whenever you have questions we are always here for you;  we can speak at your convenience.

Worries last a moment.

Unwanted surprises could arise and are not limited to North Korea, NAFTA, changing interest rates, reduced corporate earnings, uncertain currency markets, US government debt, natural disasters, China’s reduced credit rating or their 19th national congress which started today (see further HERE).  There is never a shortage of worry in the world.  Much of our success actually has come from discerning how to ignore unprofitable worries, and diversifying to immunize against greater shocks.

Most worries ultimately become opportunities.  Positive developments then compensate for the seeming risks of earlier seasons.  Global economic growth today is more vigorous and synchronized than it has been in years.  Germany voted for stability, affirming Angela Merkel as the strongest leader in Europe.  US and Canadian tax-cuts are inching forward.  The U.S. government debt ceiling has been extended for a few months again.  Oil prices are trending upward.  Inflation is rising gently.  Brexit may take longer, Spain may hold together, and France is enthralled with its new leader.  NAFTA discussions should have a modest impact (positive or negative) and hold little risk of major catastrophe.  With China as the 2nd biggest economy today (U.S. is #1, Eurozone is #3) there's some comfort hearing President Xi’s opening emphasis on environmental responsibility.

We keep our ears open to all such developments, seeking a healthy balance between safety and opportunity.  Stay tuned as we’ll share further next month.

Prospective Growth.

This weather is amazing – no complaints with crisp sunny days in October!  Now in 2017’s closing quarter, this is typically the most generous quarter for investment returns leading up to Christmas.  Thirty years ago, October 19, 1987, there was nasty 25% drop.  News media worldwide said markets would be devastated forever.  (It lasted 3 weeks and the year ended higher!) 

That event caught my imagination and sparked my personal financial interests that ultimately led me into this career 22 years ago – another Oct. 19th  if I recall correctly.  I’ve found October often sets a strong foundation for the months which follow.

October offers many things to taste and smell, learn and enjoy, experience afresh, with further rally probably adding to values by Christmas and the new year.


Ben Takacs in our office passed his second level of CFA studies this summer.  Often noted as the toughest financial certification in the world we herald Ben’s upcoming completion as a certified financial analyst, summer 2018.  Congratulations and continued success Ben!  Sometime soon we’ll have Ben share his thoughts in this monthly space.

Going Away this Winter?

Did you realize Trip Cancelation and Interruption Insurance is part of your financial security?  Imagine the couple who planned the trip of their lifetime and paid years’ of savings for it.  They were so happy and committed that they saw no reason to insure against missing it.  What they didn’t expect was an unexpected death among their parents.  Travels were canceled – the money was lost.  

  • Don’t insure major trips through a premium credit card as this is often limited ($1000 to $2500) and only applies if the trip was originally put on that card.
  • Remember this isn’t the same as Travel Medical Coverage.  While you may consider or arrange the two together, the contracts are distinct and separate.
  • Ease the worries you haven’t yet imagined. Reasons to cancel or interrupt travel can include extreme storms, personal illness, job-loss, a variety of family emergencies among aging parents or even your children, plus government warnings against travel to certain countries.  Might as well insure against losses!
  • PLUS: not only must your own health be stable, but your parents’ health too must be stable for at least 90 days before you buy cancellation/interruption insurance, or related claims could be annulled.  (See further HERE.)

Various surprises can impact travels -- at any age.  By age 70 people typically have at least three chronic health issues to report with any travel insurance application.  For me this now includes myelodysplasia …a gift or surprise I wasn’t expecting.  Point is, we carry on living, working as we choose, and traveling to wonderful places when the inclination strikes.  Today nothing holds us back.  Still be sensible, though, to insure the risks that could thwart your travels or steal your savings.

If We Could Crystal Ball ...now into 2018?

As I said above we have no crystal ball but continue to blend professional prudence with common sense.  What I personally see but cannot guarantee is that 2017 markets will end higher and 2018 will continue to lift corporate earnings and investment values.

Canada’s 2017 laggards have been financials (flat for 9 months) and energy which fell 25%.  Financials are a third of our market; energy is a fifth, together representing 55% of our capital markets.  No wonder the stock market to Sept 30th was only slightly over zero!  Rising interest rates will help bank stocks within our Cdn dividend funds.  Rising oil prices will favour energy firms, which having reduced costs, are anxious for double-digit returns when sentiment turns in their favour.  Much of Canada’s market is preparing for a strong 2018.  Perhaps it will rocket ahead like 2016.  With time all this will come into view.

The U.S. is among the highest-priced stock markets in today’s world.  2017 performance mostly rests on 4 or 5 innovative stocks, especially the FANGs (Facebook, Amazon, Netflix, Google) which have low earnings, no dividends, and high debt-loads.  We are not emphasizing the US in any way at this time (although it will always appear within our global infrastructure and global dividend mandates).

European markets compare as less expensive, pay stronger dividend yields, and are earlier in their cycle which suggests more potential growth.  Several Emerging Market economies are similarly poised despite this year’s double-digit returns.

For safety and growth our portfolios especially blend opportunities within Canada, Europe, and the developing world.  Always we stay mindful of mandates which reduce worries and avoid calamity.  These life income mandates as you know include major Canadian and global focus to dividends, infrastructure, real estate, global fixed-income, and where suitable also life payout annuities.

We cannot see the whole future but we’ve seen the past and thus know what kinds of events the future holds.  We plan to remain secure against any storms when they arise, and recover quickly.  What I’ve experienced personally since 1987 and professionally since 1995 is that we have the team and the processes, the compassion and commitment, to safeguard investors, families, and lifestyles in all kinds of weather.

Yours in Financial Security for LIFE!


Brian Weatherdon, MA. CFP. CLU. CPCA. CRC.  905-637-3500 x 223

627 Guelph Line, Burlington, Ontario. L7R 3M7.   1-877-937-3500 FREE x 223
Ret.Coach SEALAmazon (2013):   A Lifetime Of Wealth — And How Not To Lose It.
Amazon (2013):   Protecting Life, Loved Ones, and Future Dreams.
Amazon (2015):   Your Business, Your Retirement: Halton Retirement Study.
** This monthly letter touches on key strategies in Canadian and global investing and financial planning. This letter is not an offer to sell any kind of security, insurance, or program. Historical returns and risk measures are not a valid guide to future performance. Returns are from publicly available sources and research from a variety of firms including but not limited to GLC, RBC, CIBC, Mackenzie, Franklin Templeton.  Opinions reflected in this letter belong solely to the author and no other body is responsible for the content expressed here. We value opportunity to consult alongside your legal and accounting firms to advance your financial security and unique goals. We are grateful always to receive your comments and questions.

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