Category Archives: Investments

Terry Broaders

Weekly Update November 24 2015

“The Best Revenge Is To Be Unlike Him Who Performed The Injury” -Marcus Aurelius


TSX: Slow Friday After A Solid Week

The S&P/TSX composite index was down 40.34 points at 13,433.49 Friday, after an otherwise solid performance over the week that saw strong advances in three of the four previous trading sessions. The S&P/TSX has added 2.7 per cent this week. The S&P 500 added 0.4 per cent to 2,089.19 in New York, after rising as much as 0.8 per cent. Declines in energy and consumer staples shares whittled down earlier gains.  The S&P 500 rose 3.3 per cent this week, the most since December, as shares rebounded from the worst weekly decline in almost three months. Minutes from the Federal Reserve’s October meeting released Wednesday stressed that the pace of any interest-rate increases will be gradual, reassuring investors that higher borrowing costs won’t derail economic growth. The index has rallied 12 per cent from its August trough and is 2 per cent from its all-time high set in May.  The Dow Jones industrial average rose 92.13 points, or 0.52 per cent, to 17,824.88, while the Nasdaq Composite added 31.28 points, or 0.62 per cent, to 5,104.92.


Women Occupy 19.5% of Seats on Corporate Boards

A new report says women hold 19.5% of the seats on the boards of Canada’s biggest companies, up from 17.1% in 2014. The report by the Canadian Board Diversity Council says it’s the largest one-year increase in female representation on the boards of FP500 companies, which are Canada’s largest firms by revenue, since 2001. The rise follows the introduction of a new “comply or explain” policy that forces publicly traded companies to disclose certain statistics on the representation of women on their boards and in executive officer positions. Securities regulators in every province and territory except for Prince Edward Island, Alberta and British Columbia implemented the “comply or explain” rules at the end of last year.
Pamela Jeffery, the founder of the Canadian Board Diversity Council, says that although Canada is heading in the right direction, the pace of change is too slow.  Jeffery says securities regulators should force publicly traded companies to have written board diversity policies rather than merely requiring the companies to disclose whether or not they have such a policy in place.  “In the context of board diversity at a global level, Canada is falling behind,” said Jeffery.
In the United Kingdom, there are no all-male boards in the FTSE100 — the 100 largest London Stock Exchange-listed companies based on market capitalization. In the FTSE250, the next 250 largest companies on the London Stock Exchange, that are only 15 companies that have no women on their boards.  In comparison, 109 of the companies in Canada’s FP500 have boards comprised entirely of men, said Jeffery.


Market Update as of November 20 2015

North America
The TSX closed at 13420, up 345 points or 2.64% over the past week. YTD the TSX is down -9.04%.
The DOW closed at 17824, up 579 points or 3.36% over the past week. YTD the DOW is down -0.05%.
The S&P closed at 2089, up 66 points or 3.26% over the past week. YTD the S&P is up 1.51%.
The Nasdaq closed at 5105, up 177 points or 3.59% over the past week. YTD the Nasdaq is up 8.00%.
Gold closed at 1076, down -5.00 points or -0.46% over the past week. YTD gold is down -8.19%.
Oil closed at 39.39, down -1.42 points or -3.48% over the past week. YTD oil is down -25.24%.
The USD/CAD closed at 1.33446, up 0.0024 points or 0.18% over the past week. YTD the USD/CAD is up 13.71%.

The MSCI World closed at 1701, up 29.00 Points or 1.74% over the past week.  YTD the MSCI World is down -0.53%.
The Euro Stoxx 50 closed at 3453, up 93.00 points or 2.73% over the past week.  YTD the Euro Stoxx 50 is up 9.73%.
The FTSE closed at 6335, up 217.00 points or 3.54% over the past week.  YTD the FTSE is down -3.53%.
The CAC closed at 4911, up 104.00 points or 2.14% over the past week.  YTD the CAC is up 14.94%.
The DAX closed at 11120, up 412.00 points or 3.84% over the past week.  YTD the DAX is up 13.40%.
The Nikkei closed at 19880, up 283.00 points or 1.44% over the past week.  YTD the Nikkei is up 13.92%.
The Shanghai closed at 3631, up 50.00 points or 1.39% over the past week.  YTD the Shanghai is up 12.24%.


Sources: Bloomberg; Investment Executive;,

Terry Broaders

Weekly Update October 27 2015

“Little Attention Is Paid to People Who Talk Too Much” – Kin Hubbard


TSX Up On Banks and Materials Gain

Canada’s main stock index rose on Friday, helped by gains in financials and materials stocks. The Toronto Stock Exchange’s S&P/TSX composite index closed up 75.55 points, or 0.54 per cent, at 13,953.66. It gained 1.4 per cent on the week. Equities got a further boost Friday as China’s central bank cut its benchmark lending rate, stepping up efforts to cushion a deepening economic slowdown. The move comes ahead of Bank of Japan and Federal Reserve meetings next week, as central banks worldwide seek to revive slowing global growth and lacklustre inflation. The Dow Jones industrial average rose 160.68 points, or 0.92 per cent, to 17,649.84, the S&P 500 gained 22.69 points, or 1.11 per cent, to 2,075.2 and the Nasdaq Composite added 111.81 points, or 2.27 per cent, to 5,031.86.


Retail Sales Rise Higher Than Expected

Canadian retail sales rose for a fourth-consecutive month in August, beating expectations, driven by higher sales of new trucks and alcohol. The value of Canadian retail sales increased 0.5% to a seasonally adjusted 43.62 billion dollars in August, Statistics Canada said October 22. Market expectations were for a 0.1% gain, according to economists at Royal Bank of Canada. Excluding motor-vehicle and parts sales, retail sales were flat in August compared with the previous month, at C$32.59 billion. Retail sales rose in seven provinces in August with Quebec’s gain of 1.2% the largest increase in dollar terms. Sales in B.C. rose 1.4%, while Ontario gained 0.2%.  Economists had expected sales excluding motor-vehicle and parts to rise 0.2% in the month. Retail sales volume, which economists say offers a better gauge of economic activity, rose 0.7% in the month.
The August retail-sales report comes one day after the Bank of Canada downgraded its outlook for economic growth during the next two years but maintained its key interest rate at 0.5%. Recent data suggests that while Canada’s economy is rebounding from an oil-price driven slump in the first half of the year, low commodity prices continue to be a drag on growth.



How the New Trudeau Government Will Affect Your Pocket Book


Market Update as of October 23 2015

North America
The TSX closed at 13954, up 116 points or 0.84% over the past week. YTD the TSX is down -5.42%.
The DOW closed at 17647, up 431 points or 2.50% over the past week. YTD the DOW is down -1.04%.
The S&P closed at 2075, up 42 points or 2.07% over the past week. YTD the S&P is up 0.83%.
The Nasdaq closed at 5032, up 145 points or 2.97% over the past week. YTD the Nasdaq is up 6.45%.
Gold closed at 1164, down -12.00 points or -1.02% over the past week. YTD gold is down -0.68%.
Oil closed at 44.69, down -3.04 points or -6.37% over the past week. YTD oil is down -15.18%.
The USD/CAD closed at 1.31154, up 0.0206 points or 1.59% over the past week. YTD the USD/CAD is up 11.76%.

The MSCI World closed at 1689, up 13.00 Points or 0.81% over the past week.  YTD the MSCI World is down -1.19%.
The Euro Stoxx 50 closed at 3426, up 161.00 points or 4.93% over the past week.  YTD the Euro Stoxx 50 is up 8.88%.
The FTSE closed at 6444, up 66.00 points or 1.04% over the past week.  YTD the FTSE is down -1.86%.
The CAC closed at 4924, up 221.00 points or 4.70% over the past week.  YTD the CAC is up 15.23%.
The DAX closed at 10795, up 691.00 points or 6.83% over the past week.  YTD the DAX is up 10.09%.
The Nikkei closed at 18825, up 533.00 points or 2.92% over the past week.  YTD the Nikkei is up 7.88%.
The Shanghai closed at 3412, up 21.00 points or 0.62% over the past week.  YTD the Shanghai is up 5.50%.


Sources: Bloomberg; Investment Executive;

Terry Broaders

Weekly Update October 20 2015

“Now and Then an Innocent Person is Sent to the Legislature” – Kin Hubbard


TSX Moves Higher On Financials & Energyl
Financial and energy stocks headed higher Friday helping the main index of the Toronto Stock Exchange to close just higher after losses in the previous session. Oil prices headed higher as the US rig count figures were lower for a 7th straight week. Global stocks were in positive territory beginning with Asian markets which gained on expectation that China may announce additional stimulus. In Europe earnings together with the positive wave from Asia meant a strong finish to the session.

Wall Street managed slim gains amid mixed data; particularly in focus was industrial production slipping slightly. The S&P/TSX Composite Index closed up 9.13 (0.07 per cent). The Dow Jones closed up 74.22 (0.43 per cent). Oil is trending higher (Brent $50.44, WTI $47.22). Gold is trending lower (1177.50). The loonie is valued at US$0.7744.


September Home Sales Down From August
Canadian home sales in September were down from August as some of the country’s hottest real estate markets saw sales cool.  The Canadian Real Estate Association said Thursday that home sales in September through its Multiple Listing Service were down 2.1% compared with August.
The drop came as the number of sales fell in more than half of the local markets led by declines in Vancouver, Calgary and Toronto. Sales in Vancouver were down 3.8% for the month, while Toronto slipped 3.5%. Calgary dropped 7.5%. Compared with a year ago, September sales for the country were up 0.7%. BMO senior economist Sal Guatieri said the Canadian housing market is cooling somewhat. However, prices were “frothy” in the Vancouver and Toronto markets.

The national average price for a home sold in September was $433,649, up 6.1% from the same month a year ago. But, excluding the Vancouver and Toronto markets, the average was $334,705, up 2.9% from September last year. “The story for the Greater Vancouver area and Greater Toronto area is that continued strong demand for a limited supply of detached properties is sending prices through the roof as international migrants, young millennials and an apparent influx of foreign wealth flock to these two areas,” Guatieri said. “The latter could get a significant boost if China further eases foreign investment restrictions on individuals, as proposed later this year in the Qualified Domestic Individual Investor program.”



Market Update as of October 16 2015

North America

The TSX closed at 13838, down -126 points or -0.90% over the past week. YTD the TSX is down -6.21%.
The DOW closed at 17216, up 131 points or 0.77% over the past week. YTD the DOW is down -3.46%.
The S&P closed at 2033, up 18 points or 0.89% over the past week. YTD the S&P is down -1.21%.
The Nasdaq closed at 4887, up 56 points or 1.16% over the past week. YTD the Nasdaq is up 3.38%.
Gold closed at 1176, up 20.00 points or 1.73% over the past week. YTD gold is up 0.34%.
Oil closed at 47.73, down -1.78 points or -3.60% over the past week. YTD oil is down -9.41%.
The USD/CAD closed at 1.29095, down -0.0036 points or -0.28% over the past week. YTD the USD/CAD is up 10.00%.

The MSCI World closed at 1676, up 12.00 Points or 0.73% over the past week.  YTD the MSCI World is down -1.98%.
The Euro Stoxx 50 closed at 3265, up 15.00 points or 0.45% over the past week.  YTD the Euro Stoxx 50 is up 3.77%.
The FTSE closed at 6378, up 38.00 points or -0.59% over the past week.  YTD the FTSE is down -2.86%.
The CAC closed at 4703, up 2.00 points or 0.03% over the past week.  YTD the CAC is up 10.06%.
The DAX closed at 10104, up 7.00 points or 0.08% over the past week.  YTD the DAX is up 3.05%.
The Nikkei closed at 18292, down 147.00 points or -0.08% over the past week.  YTD the Nikkei is up 4.82%.
The Shanghai closed at 3391, up 208.00 points or 6.54% over the past week.  YTD the Shanghai is up 4.84%.

Blog Links

How Is Your Account Doing ? 

Fall Investment Research

Near Year End Tax Tips 

Investment Fees Full Disclosure


Sources: Bloomberg; Investment Executive;

Odette Morin

How is your account doing & Fall Market Outlook

world map

World Markets have been very volatile since the summer. The past week has been a welcome reprieve with 6 straight days of recovery but we are bound to see more ups and downs as global growth uncertainty continues.

Before I give you a brief fall Economic Outlook, I feel the need to remind you that your account results have been quite good compared to the markets. The North American markets have lost about 9% year to date. Most of you hold a combination of fixed income, cash and a healthy dose of International Equities, not just North American Equities. Your account will likely show a small gain or very small loss if any.

We do not anticipate any recessions or long-term downturn. Short-term volatility is a normal and healthy process of financial markets. You should not be alarmed at all.

Here is a quick fall 2015 economic outlook. We look forward to seeing you at your annual review meeting to further discuss these events as they pertain to your personal situation. In the meantime, never hesitate to contact us.

Please see the attached Economic Outlook – Fall 2015 from RBC GAM’s Chief Economist Eric Lascelles.

Key Highlights

– Oil Prices – Estimates indicate that West Texas oil prices can rise moderately, but probably not all the way back to US$60 a barrel in the near term;

– Financial-market weakness and volatility are naturally concerns at present, though we expect the former will fade. Commodity-oriented risks – mostly connected with resource-exporting countries and companies – may linger due to a fundamental supply-demand mismatch;

– Gazing into 2016, most regions should manage faster growth, though we have more conviction about this view for the developed world than emerging nations. In the developed world, North American growth prospects have been reduced, while the outlook for Europe and Japan is little changed. All appear on track for growth next year that is no worse than 2015, consistent with the economic-recovery narrative;

– The U.S. dollar continued to perform very well last quarter, but the greenback has been in a bull market for four years now and we feel confident declaring that the “easy money” has been made. To be clear, we’re still bullish on the U.S. dollar but are more tentative now, recognizing that the pace of the gains has been significant and that the currency is no longer undervalued.

– Global inflation remains very low and is likely to fall even more in the near term as the latest wave of oil-price weakness washes over the economy.

– In our view, the long-term case for stocks remains intact. Equity valuations were broadly fair before the downturn, but the decline has pushed equity markets below equilibrium, potentially providing an attractive entry point for investors. With stable earnings and the potential for rebounding valuations, total-return prospects for equities remain compelling.

Odette Morin

Fall Investment Research (written by Anthony Sabti)

investment research

Each year Odette and I complete a thorough review of the investments we use for You First clients. We cover the entire Canadian mutual fund spectrum and eventually narrow it down to a list we are comfortable recommending. There is much more to a fund then merely its rate of return. Here are some of the metrics we look at when assessing a particular investment:

Manager: Who runs the fund? How long has he/she been in the industry? What is their investment style? Are they by themselves or part of a team? Do they have a repeatable process? Do they have long-term track record of above average returns? A fund’s portfolio manager is one of the most important considerations.

Quartile rankings: Every mutual fund is placed in a category based on the assets inside the fund (ex. Balanced Fund, Global Equity Fund, Canadian Dividend Fund). This allows for a comparison of the fund within its peer list. Each fund in a category is ranked according to return and is assigned in one of four quartiles. A fund with a 1st quartile 5-year return means it has achieved returns in the top 25% of all funds in its category over the past 5 years. We look for funds that consistently achieve top 2 quartile returns.

Standard Deviation: How volatile is a fund? Standard Deviation measures the variation in a mutual fund’s returns. Here are two very basic examples:

• Over three years Fund A has returns of 8%, 10%, 6%. The basic average (I won’t go into the timing of these returns) of these three returns is 8%. The standard deviation would be 1.63%.

• Over three years Fund B has returns of 16%, 0%, 8%. The basic average (ignoring timing) of these three returns is 8%. The standard deviation would be 6.53%.

Fund A and Fund B achieved the same rate of return, but fund B was much more volatile. All other things being equal, fund A has achieved a better risk-adjusted return. We look for funds with low volatility and high risk-adjusted returns.

Fees: All mutual funds have a Management Expense Ratio (MER) which bundles in both the management firm and advisor’s compensation. For an equity fund the MER averages around 2.3% although more expensive funds can near the 3% mark. Although a lower fee won’t guarantee a higher return, there is a correlation between the two and we strive to use funds with average or below average MERs.

Concentration: A mutual fund can hold as few as 10 stocks, but there are also funds that have hundreds of holdings. We generally look for concentrated funds that hold around 20-50 companies. This is usually the sign of an active manager with conviction and studies have shown that mutual funds with concentrated portfolios tend to outperform.

Upside/Downside capture: This metric compares how a fund performs relative to its benchmark index. If Canadian Equity Fund A has a 5-year upside capture of 100% relative to Toronto Stock Exchange (TSX), it means it increased as much as the benchmark in that period. If it has an 85% 5-year downside ratio, it only decreased 85% compared to the TSX. Naturally we look for funds to capture as much of the upside with as little of the downside. This is another way of assessing risk-adjusted return. Successful managers love highlighting a good upside/downside capture ratio during their presentations.

A lot of work goes into our fall analysis.  It is essential to do an in-depth review every year but ongoing monitoring is also part of our regular work. You will be updated at your annual review meeting and contacted should any urgent changes are required during the year.

Odette Morin

About Investment Fees: Advisor’s accountability and full disclosure.

It’s finally time for full disclosure! Starting February 2017, advisors will be legally required to include their compensation and management fees on every statement you receive.

Typically, advisors are paid 1% of the market value on a client investment account. Investment companies are paid 1.5% for management.

This is pretty much industry standard. But what isn’t standard is the value they provide – or lack thereof, which is precisely why this new regulation is a game changer. Now you’ll know what you’re paying for.

What full disclosure reveals.
Did you know that banks charge the same fee as financial planners with little personal service (the “your call is important to us” message doesn’t cut it), let alone monitoring.
Full disclosure enables you to take a critical look at what you’re paying for in relation to what you’re earning. It protects you. It keeps you informed. It allows you to comparison shop.

It also spurs critical questions like this one: do financial planners earn their keep?

Are Advisors Worth it? According to research, we are.

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YF About Investment Fees CHART3

As you can see, those with an adviser do better financially and feel more confident about their future.

In the next few blog posts, I will talk more about fees, how much you actually pay, discuss the value we add and how competitive our fees are.  Stay tuned!