Equity markets had another strong quarter led by mega-cap technology stocks, which we increased in our Balanced and Growth portfolios this quarter. The main story continues to be global central banks and government stimulus driving money into markets, most specifically the largest and most liquid companies on the planet, such as Apple, Google, Microsoft, and Amazon. More recently, we seem to be witnessing a tug-of war between “stay-at-home” stocks and “recovery stocks” as the outlook for the virus economy continually changes with daily news, vaccine rumours, and stimulus debates in the US government.
As we steam towards a US election on November 3rd, markets are somewhat choppy. Polling suggests a strong democratic victory, although 2016 served as a lesson that polls are not always reliable. Nonetheless, it is very likely that markets have already priced in a win for the democrats. That said, this is a good time to re-visit the historical impact of elections on US markets. History tells us that election years generally return better market growth than the immediate year following an election. That said, there is a common assumption that Republicans (being pro-business) are better for markets than Democrats. Looking back however, there isn’t much evidence to support that theory. The graph below (which excludes 2020), demonstrates that the partisan characteristics of Presidency determine very little.
With all of this in mind, it is difficult (and largely futile) to make investment decisions based on expected, or actual, election results. In the meanwhile, we continue to hold quality companies, take gains on them when valuations run too far, and are happy to keep cash on hand in search of new opportunities.
-The Gilman Deters Team
I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by HarbourfrontWealth Management Inc.”
This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity. As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. Laws and regulations are continually changing, and their application and impact can vary widely based on the specific facts involved and will vary based on the particular situation of an individual or entity. Prior to making any decision or taking any action, you should consult with a professional advisor. The information is provided with the understanding that Harbourfront Wealth Management is not herein engaged in rendering legal, accounting, tax or other professional advice. While we have made every attempt to ensure the information contained in this document is reliable, Harbourfront Wealth Management is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or as to the outcome to be obtained from the use of this information, and is without warranty of any kind, express or implied. The opinions expressed herein do not necessarily reflect those of Harbourfront Wealth Management Inc. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are not to be construed as a solicitation or offer to buy or sell any securities mentioned herein. Harbourfront or any of its connected or related parties may act as financial advisor or fiscal agent for certain companies mentioned herein and may receive remuneration for its services. The comments and information pertaining to any investment products (The Portfolios) sponsored by Willoughby Asset Management are not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of units of The Portfolios is made pursuant to the Offering Memorandum or Simplified Prospectus and only to investors in Canadian jurisdictions. Important information about The Portfolios is contained in the Offering Memorandum or Simplified Prospectus available through Willoughby Asset Management. Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with investments in The Portfolios. Investments in The Portfolios are not guaranteed, their values change frequently, and past performance may not be repeated. Historical annual compounded total returns including changes in unit value and reinvestment of all distributions do not take into account sales, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Unit values and investment returns will fluctuate and there is no assurance that The Portfolios can maintain a specific net asset value. Harbourfront Wealth Management Inc. (“Harbourfront”) has relationships with related and /or connected issuers, which may include the securities or funds discussed in this commentary and are disclosed in our Statement of Policies Regarding Related and Connected Issuers. This policy is included in your new client package, on our website, or can be obtained from your investment advisor on request.