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 as we move into the end of 2020.
Your portfolio declined in October (back to the level reached at the end of July) before completely recovering in the days following the election. You remain with positive performance in 2020 and over the last twelve months.
With all the uncertainty going on in the world, let’s focus on what we do know about the future and how that shapes a few of the enduring trends.
Working from home is here to stay (Companies are shrinking the amount of office space they rent).
0% interest rates are here for the next three to five years (As debt matures the new rate for renewal will be at a historically low cost).
Rent and interest are big expenses for every business. These expenses are structurally resetting lower.
The positive tailwind of these two trends will benefit companies for the rest of this decade.
When expenses go down that means more money is left over to invest in the business or to save, which means earnings go up as margins expand.
Now imagine if your business is that is seeing demand go up to reflect the changes in behaviour brought on by the pandemic.
The recovery will continue to be unequal. We need to remember that for all the businesses that are shrinking (due to lack of demand) there are just as many that are thriving. The cup of coffee I used to buy downtown? I’m buying it at the end of my street.
Our world is much more local and domestic. The money we would spend internationally is being spent close to home. This is not likely to change any time soon.
Our investment strategy is successful by being forward looking and aligning with the positive trends that are the mostly likely to occur.
We continue to focus our investments around domestic themes in North America while maintaining a proper diversity of individual ideas. Positive and enduring trends remain for areas such as domestic consumer (renovations etc.), healthcare, Infrastructure (5G), technology and transportation.
Our investment strategy remains sound and you remain in a strong position financially.
The view from Brian Belski, BMO’s Chief Investment Strategist:
“US stocks were broadly lower for the second straight month with the S&P 500 logging a 2.8% decline in October as a resurgence in COVID-19 cases and lack of pre-election stimulus overshadowed largely positive earnings releases during the back half of the month. Election uncertainty added another layer of anxiety, although US stocks managed to rally 5.3% in the first three trading days of November, leaving the S&P 500 just 3.8% off its 9/2 high. That being said, as investors contend with a host of uncertainties, including the election outcome, heightened periods of volatility, emotion, and rhetoric will likely be commonplace, so we urge investors to be patient, disciplined, and process-driven rather than reactive during these times. From our perspective, we do believe the market will eventually revert to trading on fundamentals as some of the aforementioned uncertainties begin to dissipate in the months ahead, which should ultimately be a positive for US stocks… The TSX posted its second consecutive monthly decline in October, declining 3.4% on a price return basis and is now down almost 6% in the last two months. Overall, the weakness has been relatively broad as the market continued to struggle with the COVID-19 second wave, timing on US stimulus, and election anxiety. Despite these anxieties, fundamentals continued to improve during the month. In fact, both trailing and forward earnings growth continued to rebound from lows... Indeed, we continue to believe the TSX is well positioned to regain positive momentum heading into 2021. ” Portfolio Strategy – November 2020. BMO Capital Markets.
-          Stocks in your portfolio that made a new 52 week high this past month: CN Rail*, Home Depot, Qualcomm,

-          Stocks in your portfolio that made a new 52 week low this past month: None
-          The Loonie was unchanged versus the US dollar at $0.75
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.