Annual Letter to our Clients - Christine

Fortin Wealth is celebrating another successful year in our shared pursuit of our clients’ most cherished lifetime financial goals as stated in your Wealth Optimization Plan. Our orchestrating of the plan and elevated performance continue to be driven by goals, rather than by prognostication around the economy or markets. This will continue to be the case in the coming year, and beyond.

I will begin by restating some of our core beliefs, and then proceed to a few comments about the current economic/financial backdrop for interests’ sakes.

General Principles:

• We are long-term, goal-focused, institutionally concentrated, industrial grade immersed, wealth optimization plan driven advisors.

 

• Our core investment policy is to invest in a broadly diversified portfolio of high-quality businesses that can grow their cash flow and ultimately growth the cash flow they compensate their investors with.

 

• We believe that the economy can’t be consistently forecast, nor the markets which attempts to price a complex company in a simplistic fashion consistently timed. We conclude from this that the only practical way to capture the premium long-term return of equities is to ride out the frequent, sometimes significant but historically “always” temporary declines.

 

• We do not react to economic or market events. As we have mentioned to all our clients, companies are nimble and adaptable, and often the economic event has little impact on their underlying business. So, if your wealth optimization plan is unchanged, we continue with our plan that facilitates you to achieve your goals.

 

Current Commentary

• Powered largely by a very few of the very largest technology stocks, the past year was another exceptionally good one for the diversified equity investor. As the year ended, the market gave evidence of broadening out to some extent. This is certainly welcome and will be fantastic for satellite positions as well and non-US based corporations and non-technology companies. (1/3 of returns of S&P500 was from 10 companies)

 

• The US presidential election result was at least clear and uncontested. The economic backdrop in the US continued favourable. The job market remained fairly strong, though showing signs of cooling due to relatively stringent monetary policy. Corporate earnings and dividends reached record highs and are forecast to increase further in 2025. The S&P 500 is forecasted to grow 13% in earnings and S&P/TSX 12% in earnings; These do not yet factor in any possible corporate tax cut.

 

• At the same time, the elephant in the room are risks of a Trump-led tariff war and the high valuation for the US stock market (particularly in tech and communication).

 

• US Federal Reserve and the Bank of Canada both remain in easing mode which in the past has been a tailwind for equities.

 

• Inflation has not gone away – while tariffs will dictate the positioning of the Bank of Canada, the Fed Chair Powell observed in mid December that it is still on his radar. A frothy market took this statement rather badly, as indeed it should have, in our opinion.

 

• A steepening yield curve where now the 10year yield is higher than the 2-year yield has historically been a good omen for equities. While we had a fairly good year for our fixed income component, the rate declines (and price increases) are mostly priced in, and we remain limited on our fixed income exposure.

 

• The fiscal condition of the US remains undeniably appalling, the consumer is (perhaps surprisingly) in very good shape. The household debt service ratio at 10.1% in the third quarter of 2024 is near 40year lows despite coming off the highest rates in years.

 

• It doesn’t seem reasonable to suppose that the broad equity market can go on indefinitely compounding at the nearly 16% it has been producing since the March 2009 Global Financial Crisis lows, nor do we need it to. Our longterm plan assumes the hundred-year return of the S&P500 at around 10% and S&P/TSX at around 9%.

 

We wish all our clients and friends – because to us they are the same – a healthy, happy, and prosperous 2025. We are always here to answer your questions and address your concerns. To our clients, we thank you – it is a privilege to serve you.

Chart Source: S&P500, YCharts, BMO Nesbitt Burns Investment Strategy team

 

25% Tariffs: What If? - Christine

It is going to be an interesting ACT II to the ensuing political drama on both sides of the border during the next 3 months. Not the least of which is the economic threat, a certain form of war, of tariffs being imposed on Canadian good being exported to the US. Our economics team judges that a 25% tariff could pull our growth down by nearly 2 ppts and weigh on the loonie (Christine’s estimation would be 4 big figures initially from the CAD/US rate differential - see below, which would help shield exporters somewhat), but monetary and fiscal policy would not stand by on the side lines.

We are not debating the impact on growth of tariffs, however, there are real tools that can be implemented.

1. Expect the Bank of Canada to deliver much more interest rate relief than under a status quo backdrop – expect up to 100 additional basis points. This will obviously cut rates and free up cash flow to companies but will also support the loonie somewhat.

2. On the fiscal policy side, the federal budget for 2025 would need to be aimed squarely at supporting the domestic economy and providing relief.

We always say that companies are nimble and adaptable and will pivot as needed no matter the challenges they are faced with. Currently, we are acutely aware of our clients aggressively looking to create other growth channels and other markets to export to – a lower loonie helps this!

We have a more detailed publication on the specific impacts and tools that we feel should be employed, click here to read:

Article Source: 25% Tariffs: What If?

 

Embracing Market Swings: Why Volatility Favours Long-Term Investment Success - Ryan

As we enter 2025, many headlines point to higher expectations for increased market volatility stemming from changes in the U.S. Government, potential elections here in Canada as well as discussions around the introduction of tariffs from neighbouring trade partners. As the headlines continue to grow, we take a step back to focus on the long-term outlook for our clients and utilize short term volatility as an opportunity to rebalance portfolios and discovery areas of opportunity for long term investing. ¹

Market volatility is a staple when investing in the equity markets. While the past does not provide any guarantees to what the future may bring it is helpful to review past years to remind ourselves of previous headlines, negative sentiment, and years of high volatility as when seen over a long period of time begin to show as areas of opportunity rather than a long-term risk. ¹

From January 1928 through August 2023, the S&P 500 Index fell more than 1% in a single day 2,891 times, or every 9 trading days on average, yet rose by more than 1% in 3,030 trading days. Over that same period, the index fell more than 2% 859 times, but rose by more than 2% 769 times—every 30 trading days on average. Still, over this seemingly volatile period, the S&P 500 rose more than 25,425% cumulatively. A hypothetical investment of $10,000 in 1928 would have grown to $2,552,469 by August 2023—not counting dividends.¹

Chart Source: Fisher Investments Putting Stock Market Volatility in Historic Perspective

While looking at the long-term growth of the index over time may seem to be a smooth ride. Below we can see individual calendar year returns for the S&P 500. In blue, we see the annualize return for that year while the red dot signifies the largest intra-year peak through trough market decline within that year. The 50-year average shows us that a 13% annual correction is quite normal, and, in many years, large intra year corrections still result in a positive year end return. ²

Chart Source: Bloomberg L.P. (2024), Standard & Poor’s (2024), BMO Wealth Management (2024)

Our focus remains the same leading into 2025 as we continue to focus on our client’s long-term goals. With our Wealth Plans as our guide, we will utilize short-term market volatility and pull backs as an opportunity to reinvest in great companies that drive cash-flow and value to our clients over the long term. ²

Article Sources:

1. Putting Stock Market Volatility In Historic Perspective | Resources | Fisher Investments

2. 2025 Outlook – The name of the game - BMO Wealth Management

 

Financial Planning for Your Life Stage – Jordan

Investing isn’t a one-size-fits-all kind of mindset it evolves as your life does. As you navigate different life stages/circumstances your financial goals, risk tolerance, and investment strategies normally follow suit. Understanding how your approach to investing changes over time can help to make decisions that create a solid financial foundation for the future.

A person’s “Life Stages” can be broken into four main phases:

• Phase One: Starting Out
• Phase Two: Marriage, Mortgage, Children
• Phase Three: Pre-Retirement
• Phase Four: The “Calmer Years”- Retirement

 

Phase One: Starting Out

In this phase people are normally in their college and university years. It’s the beginning of their time in the workforce and they don’t typically have a lot of disposable income.

Financial Goals

For many people in this stage their goals may include things like purchasing a car, saving for a down payment, moving out to live on their own. Ultimately this stage of life is all about saving whatever income is possible.

Risk Tolerance

People in this stage of their life tend to have a much higher risk tolerance. Since people in this stage are so early on in their careers, they have the runway to afford to take some risks. However, risks that are taken should be limited to an affordable amount.

Investment Strategies

In this stage of life growth is the main priority. The amount of time someone in this stage of their life has to stay invested in the market, means short term volatility associated with growth mandates shouldn’t change the investors mindset when deciding to invest.

Phase Two: Marriage, Mortgage, Children

In this phase people are normally in their late twenties to their early forties. This stage of life comes with a lot of changes. During this time in people lives people’s jobs/responsibilities take on more importance and there is less time for leisure.

Financial Goals

In this stage, financial goals can shift. For many big cities in Canada owning a home may still be on the backburner in this stage of life, however, regardless of whether you have purchased your first house or not the of life’s goals associated with this stage stay relatively similar.

Expenses for Children, house maintenance, and different family outings start to take centre stage. You move financial responsibility from taking care of yourself to taking care of your family during this stage.

Risk Tolerance

While still being willing to take risk in this stage, most people scale back due to the commitments in their lives. The focus is on saving for retirement and planning for upcoming expenses means that speculative investments may be less suitable in this stage.

Investment Strategies

As we still have a longer runway to retirement at this stage, a growth mindset normally remains. The biggest difference during this life stage is that there is a greater need for liquidity. The responsibilities are bigger than the previous stage, which, in turn means expenses are typically bigger. Speculative investments with limited liquidity are not usually a good option during this stage of someone’s life. However, people in this stage are still usually able to handle the short-term volatility of being in a growth mandate.

Phase Three: Pre-Retirement

This phase is when people are normally early forties until late 60s. In this stage of life, income is stable and expenses start decreasing. Mortgages may be paid off and children start growing up and may be finishing school during this phase. In this phase it is important that retirement saving is the focus, this means contributing to accounts like RRSPs and company pensions.

Financial Goals

As your expenses are now much lower, the main financial goal is making sure your retirement is funded. There could be other goals such as a house upsize/downsize that may come during this period however, the focus remains on upcoming retirement.

Risk Tolerance

A person becomes less tolerant to risk as they near retirement. Meaning, all-or-nothing decisions in the market are not generally a mindset that is found withing this life stage.

Investment Strategies

Just because you aren’t making risky investment decisions does not mean that you can’t have a growth mindset. As someone draws near to retirement, they may decide to increase the amount of Fixed Income within their portfolio. This will generate more income that will help to fund their retirement. In preparation for retirement, there may be an opportunity for insurance that will help to plan for a person’s estate.

Phase Four: The “Calmer Years”- Retirement

This phase occurs upon retirement. What may have been a regular expense may drop off and new ones will appear. Whether someone decides travel is what they want to do or finding new hobbies. Retirement is the time to explore different opportunities that may not have been there throughout working years.

Financial Goals

With retirement, the biggest goal we see for our clients is estate planning. People in this stage of their life tend to look at where and how to pass down their accumulated wealth.

Risk Tolerance

As someone prepares for estate planning, a growth mindset starts to become less of a priority. As a person ages, their thinking normally transitions to capital preservation. It becomes less about growing the balance of their portfolio and more about how the portfolio can be passed on to their next generation while still supporting their retirement needs.

Investment Strategies

For people in this phase of their lives, we normally see a move towards a more balanced portfolio. Fixed Income is a great way to provide income to those who would like to have more income than their pensions provide.

Investing is a lifelong journey, and each stage of life offers their own set of unique opportunities and challenges. The key is to plan, remain flexible, and seek guidance when needed.

If you have any questions, feel free to reach out to any member of our team and we would be happy to provide more insight to any of these topics.

Article Source: Canadian Securities Institute: What lies ahead: The “life cycle” approach to financial planning

Robin Esrock’s Bucket List

Winter 2025

Travel personality and bestselling author Robin Esrock has reported from over 120 countries on 7 continents. We’ve invited him to share his latest travel inspiration.

GLOBAL DREAM FOR THE SEASON: MARLBOROUGH

Located in the sun-drenched northeastern tip of New Zealand's South Island, Marlborough is heaven for food and wine buffs. Vines of world-renowned Sauvignon Blanc stretch across undulating hills like an artist's brushstrokes, with wineries enhanced by high-quality artisan food producers, fruit and olive orchards, and gourmet restaurants taking full advantage of local produce and seafood from nearby Marlborough Sounds. My wife and I did a week-long road-trip to the region, sampling tasting flights and feasting along a ‘Golden Mile’ between Rapaura and Renwick. We swam with dolphins on an eco-tour in the stunning Queen Charlotte Sound, took a guided biking wine tour, and a cheese and olive-oil tasting class too. The pace and beautiful scenery are far removed from New Zealand’s reputation for more wild adventures. Marlborough is an overlooked wine region that invites you to take it slow, toast the sunshine, and taste the good life.

CANADIAN DREAM FOR THE SEASON: WHITEHORSE

There's a reason Whitehorse landed in the New York Times’ 52 Places to Go in 2025. With direct flights from Vancouver, a winter visit packs in plenty of Canadian Bucket List adventures. The Yukon capital sits beneath the aurora oval, giving you the best chance of seeing the northern lights. That’s still no guarantee, so keep your eyes on the aurora forecast, and connect with a local aurora-watching lodge or a local tour operator. During the day, head to Muktuk Kennels to find the happiest dogs you’ll ever see, eager to pull your sled across a magical frozen lake in the surrounding valley. Lovingly named, cared for and exercised, if you’ve ever wanted to go dogsledding, this is the place to do it. Soak in the natural hot springs at the Eclipse Nordic Spa where you can sculpt your hair in ice to enter their hilarious hair-freezing contest. If you’re lucky, you can see the northern lights while soaking in the springs. Whitehorse has a quirky arts scene and some great restaurants, like the Woodcutter’s Blanket, Smoke and Sow, and breakfasts at Burnt Toast. Peak aurora viewing runs all the way to April.

TRAVEL TIP: TEACH KIDS ON THE ROAD

We’ve yet to see how technology like AI will disrupt the future of employment and education, but in the meantime, I refuse to let school get in the way of my kids’ education. Late fall, I took my 11-year-old daughter to Italy’s Amalfi Coast to learn about Roman history at Pompeii, stroll the Path of the Gods, explore Positano, and expand her taste horizons inside authentic Italian kitchens.

Yes, she missed a week of school, but the crowds were significantly lighter from high-season peaks, prices were more amenable, and our activities stoked curiosity and wonder. Last spring, she missed some school when I took her to Belize, where she qualified as a junior open water scuba diver so we could dive the Belize Barrier Reef together. She finished her homework on the plane, but learned so much more both on the ground, and underwater. Take your kids and grandkids somewhere different: the result is lifelong memories, priceless experience, and a hands-on, real-world education.

LET’S GO

Several new travel trends have emerged for 2025, including: a focus to make travel more accessible for disabled and neuro-diverse travellers; more offerings for solo-female adventures; ‘workout holidays’ that combine travel with sport clinics or exercise; family sabbaticals; and rail journeys offering more off-board experiences.

Remember, there’s never been a right or wrong way to travel, only your way. I recently put together a Gift Guide of travel-related products I tested in the field, from memory foam neck pillow to suitcases, functional clothing and go-anywhere waterproof runners. MEC’s Hut Booties are something special if your feet are cold around the house or cabin. My winter adventures include ski trips to Colorado, Big White and Mt. Baker, and a snowmobile safari in Ontario. I’m not going anywhere without my hut booties!

DON’T QUOTE ME:

“Peculiar travel suggestions are dancing lessons from God.” - Kurt Vonnegut

If you have any travel-related questions or inquiries, feel free to email me at robin@robinesrock.com

 

Happenings

Christine

Coming off the Holidays, Christine and Kent and Kase were up at their ski place entertaining friends. The snow was amazing and there was a lot of charcuterie, cliff drops, powder days, daily stick and puck on the NHL sized rink, card games, widespread debates on various topics and thankfully no yard sales.

We aren’t sure how Kase does it, but he sits on his skis with no hands on anything while waiting… oh, to be young and nimble!

Kase has joined the Vancouver Freestyle Club so will be training there and dry land and track in the off season for Football until Flag starts again in March. Kase’s Fall Tackle team made it through to the Vancouver Mainland Football League’s semi-finals! Not bad for a team that had its first time playing together this year.

Christine and her family undertook a big residential move just before the holidays. As one of the 3 biggest stressors in a family – it was not a walk in the park. But, with the help of packers and professional organizers on the other end and a carefully curated calendar of events (we would expect no less than perfect strategic organization from ), the move was fairly painless, and they are now settled in at Crescent Heights. They are looking forward to creating a backyard oasis for the family over the summer with a large-scale Landscape project.

Ryan

The Holidays were spent local this year and Ryan and Amm took on the role of hosting the large family dinner of 20+ guests. It was a great feeling to slow the pace down and just enjoy quality time with the family. This Holiday season was a first for baby Reyna and she took in all the traditions, even snuck over to the tree at night to steal a bite of Santa’s cookies.

Aanya was excited to lean that Winter indoor soccer was starting up again. Great way for both Ryan and the kids to get in some exercise every Saturday morning.

Jordan

Jordan took full advantage of the winter season by trading Vancouvers chilly days from some well-deserved sunshine. He spent his time relaxing poolside soaking up the warmth and enjoying his escape from the chilly Vancouver nights. He had a great time recharging and enjoying the peaceful downtime before diving back into work.

Dylan

Dylan had the opportunity to escape to the slopes of Whistler this Winter break. He spent his days shredding Jersey Cream and 7th Heaven while stopping for hot chocolate and waffles on the mountain! It was a perfect mix of adventure and relaxation to recharge him for 2025. Dylan’s excited for the year ahead and hopes to continue to learn, grow and develop deeper relationships with all of our clients.