BMO Nesbitt Burns
1 First Canadian Place
38th floor, P.O. Box 150
Toronto, ON
M5X 1H3

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Trust this note finds you well and enjoying this excellent summer weather.
Your portfolio posted gains again in June. You have experienced positive performance in 2020 and over the last twelve months.
To understand how we think about where we are heading (and how we will be invested), let’s look back on where we have come from in this historic year.
The first chapter (February and March): Crisis (how bad can it get?). The period when all investments declined -- albeit at different speeds and outside of government bonds / US dollars. 

The second chapter (April, May, June): Relief & Rebound (things have stopped getting worse). Lead by bond markets and the largest technology companies in the world, markets rose and the rally expanded to include many other investments.
The third chapter (beginning ... in July or later this year): The Show-Me Story -- what companies have adapted to this new reality and are actually executing on their business plans.
In this upcoming phase, stock markets will probably remain range bound. Volatility (up and down) will continue. This sideways trend will mask what is going on under the surface. Winners and losers will start to emerge. This reinforces the continued importance of focusing on areas of strength and avoiding weakness. This is always a core part of our investment process.
For the remainder of the year, selling pressure from negative headlines (Health/COVID, geopolitical, US presidential election) will bump up against improving economic fundamentals (economic growth as measured by GDP of over +4.5% in both 2021 & 2022 as forecast by International Monetary Fund in Canada and the US).

We continue to be careful and cautious in the near-term while remaining constructive in the medium-term.
Finding opportunities that align with the emerging/enduring trends (working remotely, on-shoring of supply chains, zero percent interest rates) is another core part of our investment process.
You have been and remain in a strong investment position.
As always, we have a clear plan and sound process to navigate the times ahead - be they challenging or positive.
The view from Brian Belski, BMO’s Chief Investment Strategist:

"US Stocks Prove Resilient in June Despite Renewed Pandemic Fears. The sharp rebound in US stocks during Q2 faded a bit in June with the S&P 500 index posting a modest ... gain as a resurgence in coronavirus cases brought renewed fears of a long and bumpy economic recovery. From our perspective, however, it is too early to start sounding the alarm bells as it relates to market performance, especially with the Fed prepared to take any necessary steps to further stimulate the recovery. With that said, we do expect price choppiness and elevated levels of volatility to persist in the coming months as many investors continue to doubt the validity and sustainability of the market rally since the March low. However, given the current stage of the recovery, a retest of the market low appears unlikely based on our historical analysis…Yes, Canadian stocks rebounded sharply in 2Q20, keeping pace with global markets as investors appeared to look beyond near-term uncertainties and toward economic re-openings, and the prospects of a longer-term recovery. ... However, despite this broad performance, there was still concentrated outperformance among a few key stocks. ... Shopify alone [accounted for over 1/3rd of] TSX returns in the quarter, and saw the Technology weight in the index surge to the highest level since 2003.That being said, we did see some broadening out of performance in the later part of the quarter, which our work shows typically portends to additional overall market price gains." Portfolio Strategy – July 2020. BMO Capital Markets.
  • Stocks in your portfolio that made a new 52 week high this past month: Accenture*, Home Depot, Microsoft*, United Health*
  • Stocks in your portfolio that made a new 52 week low this past month: None
  • The Loonie gained one cent versus the US dollar to $0.74
Thank you.

We wish you all our best,
Ian, Gab & Kaitlyn

* This specific security is covered under the research of BMO Capital Markets. For a full list of company specific disclosures keys please visit or ask your BMO Nesbitt Burns Investment Advisor for a copy.