29 May

May 2020 – SmartMoney Insights from Gerard Nash, B.Comm., CFP®

by Gerard Nash 0 Comments

As you are aware (if you opened your March 31st statements – I know some of you didn’t bother), we had poor performing markets in February and March this year. Markets dropped quickly due to two factors: COVID 19 and Oil Prices. The markets reacted negatively, as the markets do not like uncertainty. COVID especially presented a considerable amount of uncertainty. At that time, it was not clear how COVID would impact world economies.

Since March 23rd the US and Canadian Markets are up significantly.
Global stocks continue to head higher, on optimism about the reopening of economies.
The Canadian market is up 36% since its floor March 23rd. The US market is up 37% since its floor of March 23rd.
Both markets continue to trend in a positive direction. Last week, the US market was up about 3.2%, and the Canadian market increased almost 2 percent, and they seem to be headed higher again this week.

dow-jones-industrial-average-last-10-years-2020-05-27-macrotrends

Positives for the market:

Number of COVID Cases continue to decline.
Positive results on some vaccine trials.
The economic data through the decline seems to be showing that the economy was not impacted as badly as had been predicted.
The economic rebound now seems to be surprisingly forceful.

Negatives for the market:

There are notably fewer negatives than positives.
One big potential negative is a double spike in COVID infections. If that happens, and countries are forced to re-close some businesses, or keep businesses closed for longer than currently planned, that could have a negative impact on the market.

What kind of returns should you expect over the long term?
No one can predict long term returns in the markets. Markets can go up, down or sideways in the short term. Over the long term, the do become predictable. Which is why we build client portfolios to do well over the long term, using guidelines from FP Canada, the governing body for Certified Financial Planners in Canada. https://www.fpcanada.ca

If you are an equity investor, you can expect 6% returns on Canadian investments, and 6.4% on foreign investments, over the long term. More conservative investors, investing in fixed income products, should expect an annual return of around 3%.

We hope you enjoy our monthly market updates. If you would like to share them with a friend, just click on the links below.

Take care everyone.

Yours in service,

Gerard Nash, B.Comm., CFP ®
Founder

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Gerard Nash

Gerard graduated from Memorial University of Newfoundland in 1996 with a Bachelor of Commerce Degree. In 2001, he earned the designation of Certified Financial Planner (CFP®) from the Financial Planning Standards Council of Canada. He holds many achievement awards from Freedom 55 including Wealth Advisor of the Year and Corporation of the Year. Gerard is passionate and thorough in building and protecting the wealth of existing and new clients. His practice is in it’s twenty-third year with London Life and Freedom 55 Financial (now Canada Life). In 2019, he incorporated his business under the name 'Principal Planning' and invited additional financial planners and advisors with the same commitment and competencies to join him in providing quality financial advice. Gerard is licensed in the provinces of Newfoundland and Ontario. He welcomes new financial inquiries, and promises excellent, honest advice. Gerard hails from the Cape Shore area in Newfoundland. He lives in St. John’s with his wife, Sharon, and their four children, Joshua, A.J., Connor, and Elizabeth. He is a huge basketball fan and can usually be found coaching and watching his kids basketball games on the weekends!