December 2019 Portfolio Management Team Update

Elvis Picardo

December 4, 2019

Market & Economic Environment: North American indices powered their way to historic highs in November, boosted by lowered trade tensions and solid corporate earnings. The TSX Composite rebounded from October’s 1% decline with a 3.4% surge that took it over the 17,000 level for the first time. Nine of the 11 sectors on the index advanced in November, led by the technology, consumer and energy groups, with health care the worst performer as a ferocious correction hit marijuana producers. The S&P 500 also surged 3.4% in November to trade over 3,100 for the first time. The Dow Jones rose 3.7% to trade above 28,000, while the Nasdaq Composite added to its 3.7% advance in October with a 4.5% gain. (Data Source: FactSet)

Our Strategy: With a YTD gain of about 19% as of end-November, the TSX Composite is on track for its best annual performance in a decade. This stellar performance is by no means an isolated one; in the U.S., the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite had surged 20%, 25% and 30% respectively for the year as of November 30, while most European indices had also gained more than 20%. While easy monetary policy in most major economies has fueled massive risk appetite that has in turn led equity indices into uncharted territory, the consensus opinion seems to be that 2019 will be a hard act to follow. The Portfolio Management Team (PMT) took the opportunity provided by the broad market advance last month to eliminate securities that had underperformed significantly this year, in order to harvest tax losses and improve overall portfolio quality. The PMT believes that these adjustments position client portfolios appropriately for a challenging 2020.

Please contact any member of the PMT if you have any questions or concerns regarding your accounts.