Market Commentary

Making Cents of the Markets

New episode of Ready.Set.Retire! Listen to our final clip of 2020 where Lori and Jon take a look back on the past year, provide a retirement checklist for 2021 and offer some fun ideas for gift giving! Listen here.

Listen to this week’s Making Cents of the Markets on CKNW where we dive into our 2021 outlook for markets and the economy and ways to spend the holiday season. This will be our last segment until the new year, so make sure to check it out here.

Charitable Gifting this Holiday Season

Donating your stocks to charity that have a significant gain is a great way to minimize your taxes and give back to the community at the same time. You simply donate the investment and receive a tax credit of up to 43.70% of the amount against taxes owing and avoid paying any capital gains on the stock that is up!

Please feel free to contact us if you would like assistance in making a stock donation as we are happy to help.

Beyond the Markets

What a wild ride in markets this year has been… and we are happy we have managed it successfully!

With 2020 starting to fade behind us, we’d like to thank our devoted clients for their commitment and dedication towards our team throughout all the uncertainty that was experienced over the last past year. We enjoy working with you and your families and we appreciate the trust that you have invested in us.

We look forward to connecting with everyone in the New Year and here’s to a fresh and vibrant 2021!

Be in the Know

Major equity indices continued to edge slightly higher for the week as the same recurring narratives around US stimulus optimism and vaccine rollouts fueled markets higher. Congress is still working to complete a pandemic-relief deal as leaders have said for days that they are close on a $900 billion relief proposal that would accompany a $1.4 billion spending bill. Leaders remain committed as they have pledged to work through the weekend and look to approve a bill before they head home for the holidays. The market remains optimistic that a deal will be done given the determination of Congress and the importance of the funding needed to support the US economy in the near-term.

Outside of US politics, we received an update from the US Federal Reserve this week where they reiterated their commitment to keep interest rates low until the job market has recovered. Inflation remains low and is not a concern today which continues to justify higher equity markets and valuations. As always, there will be bumps along the road in the coming year, but we remain positive given that the economic recovery and vaccine rollout has surpassed most analysts’ expectations. With this positive backdrop, we believe that markets will continue higher in the coming year, albeit at a slower pace than the last 6 months.

Regarding economic data in Canada, headline inflation accelerated to 1% in November (from 0.7%) as upward pressure in rent prices, food, and household goods contributed most to the increase. Retail sales remain robust in Canada as the growth rate is back to normal levels as of October but is expected to slow over the next few months due to the second wave of restrictions nationally. This weakness has already been seen from data in the US and has been overshadowed by vaccine optimism. Internationally, we saw Chinese retail sales and industrial production accelerate which confirms that the global recovery remains on track with China driving a significant portion of the global economy.

Our Strategy

Our Legacy portfolios had a strong week, as our exposures in technology, consumer discretionary, and materials led portfolios higher. Gold has started to turn higher again which has assisted our returns as we believe that the metal may be on its next leg higher, fueled by ongoing stimulus out of the US and most developed nations. Our plan remains to decrease our exposure to gold and to invest more back into economically sensitive sectors like industrials and materials that are expected to benefit from the ongoing economic recovery. Our disciplined strategy remains strong and we look forward to a calmer 2021!

As we reflect on the past year, we are pleased with how we managed the portfolios throughout the volatility and uncertainty. We managed risk during the downturn and then put money back to work quickly once stimulus was announced and markets started to recover. Our confidence remains high for good market conditions over the next few years as economies around the world recover from a recession and return to growth. We are hopeful that vaccines will be distributed quickly and that our world will be a safer place so everyone can go back to enjoying life!

Fun Facts about Christmas in Canada

As the year comes to an end, we want to finish on a light note and will save the “charts of the week” for the new year! Below are some facts about Christmas in Canada that you may have not known:

1. Canada grows A LOT of Christmas trees – In previous years, Canada has exported over two million Christmas trees to over 20 countries including France, Jamaica, and Thailand.

2. Canadians love Egg Nog – Don’t knock the nog as approximately 6 million liters of egg nog was sold in December of 2018. We must admit we are fans as well!

3. Canadians are always giving back – Over 40% of our population (aged 15 and over) volunteered for charities, non-profits, and community organizations in 2018 while donations to charities in the previous year was an impressive $9.6 billion.

We’re truly proud to be Canadian and are excited to wind down the year as we wish you and yours a safe and happy holiday season!

The comments and opinions expressed in this newsletter are solely the work of Pinkowski Wealth Management, not an official publication of Canaccord Genuity Corp., and may differ from the opinion of Canaccord Genuity Corp’s. Research Department. Accordingly, they should not be considered as representative of Canaccord Genuity Corp’s. beliefs, opinions or recommendations. All information is given as of the date appearing in this newsletter, is for general information only, does not constitute legal or tax advice, and the author Pinkowski Wealth Management does not assume any obligation to update it or to advise on further developments related. All information included herein has been compiled from sources believed to be reliable, but its accuracy and completeness is not guaranteed, nor in providing it do the author or Canaccord Genuity Corp. assume any liability.