Market update email Nov 2022 from Darryl Bowles

Hi everyone,

Just touching base again to follow up from my email in July/August. I know many of you have reached out to me since my last market update to discuss your portfolios. I am always here if you have any questions or would like to review your portfolio including your investment and retirement planning. In the meantime, I wanted to update you on the markets, share some recent enhancements, and provide some information to those of you who are invested in more conservative funds.

• It has been a difficult year for all of us as we continue to navigate through these unprecedented times. Even in 2020, when the pandemic hit in March, everyone’s portfolio bounced back after some of the fear subsided. Then in 2021 there was excellent growth. In 2022, once again unprecedented market volatility has created challenges for all of us. Geopolitics, rising interest rates, inflation have continued to impact all our returns. And of course, the pandemic has still had an impact. As I discussed in my previous market updates, we will have many positive years, and also downward ones. I don’t want to be too repetitive from my previous market updates, but history supports the rebounds. If we are invested we can take advantage of them. For example, since the beginning of October markets have started to bounce back. I know all of you are aware of this and know things will recover, but I am always here if you have any questions or concerns. To look at things with a glass half full perspective, if you take a look at your portfolio we are still up from where we were before the pandemic hit in March 2020 and the other world events that have happened since then.

• To streamline some processes, we have created a new website for all of you. The address is darrylbowles.com. You will find market updates, investment strategies, and various investment and insurance calculators, just to name a few. You will also see some of the blogs I created and going forward any group emails that I send. The website is still a work in progress, but the foundation has been created. Of course, the Canada Life site is still available as well, but I wanted to personalize something for my clients. As you already know, Caroline, Kate and Diane are always here to help you as well. Their contact information and bios will be posted on the site shortly.

• Toronto Maple Leafs/Montreal Canadiens ticket give away for clients only. Go to darrylbowles.com and RSVP with your name if you would like to be entered into the draw. More details to follow about how to enter, the draw rules and dates you need to know.

• For my clients that have invested conservatively or are conservative investors, it is very difficult to see your investments drop larger than you are accustomed to. Normally a conservative investment (in particular funds that contain bonds) does not experience this type of volatility. Bonds have historically been a stabilizing force in a portfolio, reducing volatility. Historically when equities have fallen bonds have risen, and visa versa. This is not the case currently as both bonds and equities are simultaneously down. The last time bonds fell this much was in the 1970s. This is before the internet, global commerce and technology enhancements. At the time, a house could be bought for $30k and interest rates were north of 10%. The massive increase in interest rates were not expected by any bond managers and our funds are in the top half of performers in this sector. The dramatic increase in interest rates have impacted bonds heavily.
   

The long-term risk and volatility of equities are higher and so are the returns. The long-term market expectations of equities are for a greater return than bonds and the recovery expectation is within the next year or two so equities are expected to rise higher and sooner than bonds. If you are a conservative investor looking to generate better returns, we could “potentially” start moving some of your portfolio into equities, but of course only if your risk tolerance and investment goals allows it. Equities are higher risk investments than bonds so this must be taken with caution.

We could also move some of your portfolio into GIOs with a guaranteed return, to counterbalance what is being moved into equities from a risk perspective. And as always, staying the course is an option because if interest rates fall quickly bonds could do well, although that is unlikely.

If you have any questions or concerns, I would be more than happy to visit you, talk over the phone, or communicate through email or text. Just let me know.

Look forward to hearing from you.

Thank you

Darryl