October 2021 Update

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

October's update talks about the upcoming bear market trends and falling P/E we're facing. We touch on the portfolios and provide a good piece on Wills that Work with your estate planning. The Millennial Minute follows the start of the journey to financial independence and how you might be able to achieve it! Happy Thanksgiving, and happy reading!

October has come at the end of a slower September market-wise. We've come to the end of our 8 bar bull streak as the market has cooled along with the temperatures. As you tuck in for Thanksgiving this weekend, we hope you'll give our blog a read over! 

This month's Millennial Minute starts Ashley's journey into finding Financial Independence and she shares her journey every step of the way. This month she covers the importance of putting all of your finances down on paper and creating a budget to match your goals. 

Stephen's Technical Comments touch on the end of the 7 bar streak bull market conditions and the expected months of sideways trading over the next while.

We share the Portfolio Spotlight with Tourmaline Oil Corp. and as always, we give a peek into our performance, and we remind you of our extended team members who are here to help you with every aspect of Wealth Management, from mortgages to estates, insurance to financial planning. 

We wish you a happy Thanksgiving and a great start to fall! 

 

Interesting Charts & Tweets of Interest 

1) Housing prices continue to soar and wages haven't risen at the same pace... How are those first time home buyers affording their first home? Gifts from parents have become one of the most used sources for down payments.

 

 

2) Even the cost of food isn't safe from rising inflation and economic strain. Double check that grocery bill next time you're at the store!

 

3) No matter what stage of life you're in, savings should always be a top priority. How are you keeping your savings from shrinking?

 

4) A big bear market indicator is the lower P/E as the market moves along. Prices are expected to drop even lower in the future and it's something we are keeping a close eye on...

 

 

Technical Comments

 

• September’s candlestick on the monthly S&P 500 chart was a bear outside down bear bar closing near its low and below the September low. This is bearish, but the bull trend is strong. Traders will buy the 1st 2- to 3-month pullback
• September ended the 7-month streak of bull bars.
• There has never been a streak of 8 consecutive bull bars in the last 25-years, and that either September or October would be a bear bar.
• A bear bar should lead to 2 to 3 months of sideways to down trading. You can see that this is what happened with most other bear bars in prior buy climaxes.
• The bulls will try to create a credible High 1 buy signal bar in October. But even if they do, it will probably lead to a lower high and then a 2nd leg sideways to down.
• If the bulls can get a new high before the end of the year, it will probably be brief. An extreme buy climax like this typically results in at least 2 to 3 months of sideways to down trading.
• Traders will conclude that the Small Pullback Bull Trend has ended once there is a pullback that is at least 50% bigger than the biggest pullback in the bull trend.
• The biggest pullback so far was the 10% selloff in September 2020. A bigger pullback typically means 15 to 20%, and traders should expect at least 15% correction to begin before the S&P500 goes much above the September high.
• Remember, the minimum target on the weekly chart is 15%, which is around 3850. That is below the gap above the April 1 high and below the 4,000 Big Round Number.
• There is a 50% chance that September 2 will remain the high for the rest of 2021 and there is a 50% chance that a 15% correction is underway.
• A 50% chance of September 2 being the high of the year means a 50% chance there will be a new high.

 

The Portfolios

September was a busy month in the portfolio. As September got underway, we took profits on most of our positions and trimmed others. We sold all our EFTs as we wanted to increase the level of cash in the accounts and focus on individual names. With a portion of that cash we added to dividend paying stocks we already owned and added new names such as GFL Environmental, Kellogg Co., Verizon, The Travellers Co., Lockheed Martin, and PPG Industries.  We also bought oil and gas stocks such as Cenovus and Canadian Natural Resources. We sold Alimentation Coche-Tard, Fartech and Nike.  Our tactical S&P 500 current is at a zero weight and will be used to take advantage of short-term trading opportunities.

Returns on our 60/40, 70/30, and 80/20 portfolios before fees: As of October 7, 2021

 

Portfolio Spotlight

Tourmaline Oil Corp is a Canada-based company engaged in oil and gas exploration and production business sector. The Company is crude oil and natural gas exploration and production company focused on long-term growth through an aggressive exploration, development, production and acquisition program in the Western Canadian Sedimentary Basin. The Company has assembled an undeveloped land position with a multi-year drilling inventory and operating control of natural gas processing and transportation infrastructure in three core long-term growth areas. The Company is focused on three core areas: the Alberta Deep Basin, Northeast British Columbia Montney and the Peace River Triassic Oil Complex.

Tourmaline announced updated 2021 guidance, an approved 2022 budget, a base dividend increase, as well as declaring a special dividend. In addition, the company highlighted its future free cash flow allocation strategy that will see growing cash returns to shareholders as well as potential bolt-on acquisitions and margin-enhancing investments through liquid midstream opportunities.
 

The Millennial Minute

I've spoken a lot about debt and the struggles our generation is facing when it comes to our finances. My husband and I spoke extensively about this over the course of the last few weeks and have decided to start our journey to Financial Independence. You can read here how we got to this point of discussion and the first steps we're taking to reach our goals. And be sure to come back monthly for updates on our progress! Click here to read more
 

Planning Topics

Wills That Work: Estate planning is an essential component of a successful wealth management program. A good estate plan will provide you with the peace of mind that come from knowing your family will be taken care of, and your financial affairs will be in order and administered according to your wishes. An important key element of any estate plan is a Will. Click here to learn more!
 

Members of our Planning Team:

We also would like to remind you that 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!