November 2021 Update

 

Lest We Forget

We hope that you'll join our team and countless people around the world on November 11th and take a few moments of silence as we honor those who have defended our freedoms.

Money is a tool. It's something that supports your life!

November's market was surprisingly strong. Our update this month covers our returns, as well as our change in our Fixed Income section from bonds to ETFs. We share an article on protecting yourself in the digital age, and our Millennial Minute gives tips on creating and sticking to your budget. As always, we cover our portfolio returns, and we invite you to share this blog post with anyone who might have their own questions or concerns with their wealth management...

Bull bars appear to be coming back - October surprising us with its market strength. This will most likely continue in November with higher prices - showing us a small pullback bull trend. A strong way to ease into our holiday spending as we prepare for our celebrations!
The Millennial Minute continues following Ashley as she strives to gain Financial Independence. This month she touches on her trials with budgeting and some tips on how to maximize your budget space.

As always, we share Stephen's Technical Comments, our Interesting Charts and the Portolio Performance. We give an update on our Fixed Income side as we shift from Bonds to ETFs.

We hope you enjoy this month's offerings, and we hope you have a wonderful July!

Members of our Planning Team:

We have an extensive team of experts that we work with. From Business Succession, to Retirement Planning, even to mortgages, we have the professional advice and service you may be looking for!

 

Interesting Charts  

1) Has medicine gotten so complicated that we need 3000% more administrators than physicians? A chart like this brings to light where spending in the healthcare sector goes in the US...

 

2) And speaking of healthcare, below charts the alarming rise in obesity in children. With both parents typically working longer hours and dealing with long commutes, processed and quick meals are very attractive. Could the obesity rate start to decline with more parents working from home? Giving them more personal time to take care of their families?

 

 

3) The pandemic certainly didn't help, but the average family is seeing children stay at home longer and longer. With the rising housing costs, food costs, fuel costs, education costs and wages that cannot keep up with inflation, it's getting harder for young ones to leave the nest.


Source: https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/

4) Below's chart can easily show us that increased spending on staff and spending in general has not done much to increase the value of education over the last 4 decades. Where could this spending be going?

 

Technical Comments

• The October monthly Emini candlestick was a second consecutive outside bar at new high. An OO (outside-outside) pattern means the Emini is in breakout mode.
• With October being surprisingly strong, November will likely be another bull bar. Traders will begin to wonder if the Emini will reach the 5,000 Big Round Number before there is more than a one-month reversal.
• For now, the odds favor at least slightly higher prices in November. However, there is always a bear case, and a 40% chance of it happening.
• A Small Pullback Bull Trend is a bull trend where the pullbacks are small. This one began with the pandemic crash. The biggest pullback was 10% and it came a year ago.
• A Small Pullback Bull Trend ends with a big pullback. That means a pullback that is at least 50% bigger than the biggest prior pullback. Here, the trend will remain intact until there is at least a 15% correction.
• Once it ends, the bull trend typically converts into a trading range. Initially, the odds are that it will be a bull flag. Traders expect the trend to resume. If it does, it is usually a weaker bull trend.
• If the trading range lasts 20 or more bars, the probability of a reversal into a bear trend begins to get close to 50%.
• The bears want a higher high double top major trend reversal with the September high but the 4 strong bull bars after a 6-bar bear microchannel was a low probability event. A surprise typically has at least a small 2nd leg sideways to up.
• Therefore, the bears would need a surprisingly strong bear bar and a micro double top before traders would look for a reversal.
• For now, odds slightly favor sideways to up for November.

The Portfolios

October was a relatively quiet month for the portfolios. We added a position in B2Gold Corp. We sold Chartwell Retirement REIT and replaced that with TC Energy Corp. We also sold Lockheed Martin on poor earning outlook and replace it with Danaher Corporation.  We started to deploy more of our cash as we went to full positions for our dividend stocks and started a small position in our tactical S&P 500 ETF. We current sit at around 15% cash.

Returns on our 60/40, 70/30, and 80/20 portfolios before fees: As of November 5, 2021

 

Fixed Income Update

We are moving to fixed income exchange traded funds instead of holding the individual bonds for the following reasons.

1. ETFs are much more diversified in their holdings.
2. ETFs provide far greater liquidity. During the March 2021 market drop, our individual bonds offered almost no liquidity. In fact, it took us 5 days to sell $10,000 of the Suncor bond at a significant discount. ETFs trade every day.
3. There is a spread between the bid and the offer on individual bonds that is larger than the spread between buy and sell bids on the ETFs.
4. There is not always an availability of bonds to buy from our bond desk.  There is always a bid and an offer for ETFs.
5. The ETF portfolio provides a higher coupon than the current bonds.

 

The Millennial Minute

Planning a budget needs to be a trial and error process, especially when you're new to it, like I am. We live in a world where spending money is very easy and mindless, and keeping to a budget can seem difficult to accomplish. This month's Millennial Minute covers a few tips I use to keep myself on track. Click here to read more!
 

Planning Topics

Protecting Yourself in the Digital Age: You can read the BMO presentation here regarding scam awareness, online shopping, phishing and social media. Also, there are some great tips on keeping your cybe presence clean and safe. Click here to read more!