JMRD Market Observer for January 5th, 2018 – Happy New Year!

In This Week’s JMRD Market Observer



  • Happy New Year to Everyone!

  • Retirement Corner

  • Reads of the Week

  • Economic Calendar

  • Earnings Reports



Happy New Year to Everyone! 

The JMRD Wealth Management Team wishes you all the best in 2018!


In our first Market Observer of the New Year we focus on a number of items as 2017 was another year of significant change for the JMRD Wealth Management Team. Before we get to the investment comments, we wanted to review some exciting developments and changes that have occurred over the past 12 months.  Our Team is constantly striving to improve by adding new services to make our overall client offering better.  We feel 2017 was another important year as much of our hard work paid off in ‘dividends’.  Here is a short list:


  • We celebrated the first anniversary of Sue Lidbetter joining our team in the new role of Team Manager and Event Coordinator.  Not only is Sue a wonderful Team member but 2017 was the year that JMRD added a new level to what we already consider an industry leading client service offering.  Many of you have seen the great work she does for our various events and she does many of the regular duties and tasks that are not directly involved with investing or the financial markets.


  • We also tripled our summer student program this past summer and the results were awesome!  Getting a millennial perspective on things has allowed JMRD to stay ahead of many new and developing trends.


  • Returning to help in the London office was Morgan McCann, an attendee at Laurentian University in Sudbury.


  • Also back as part of the 2017 Class in our Toronto office was Arman Bery, a student at McGill University.  Arman assisted Zach in the Toronto office and his skills are getting more refined all the time!


  • Zack Maloney rounded out the summer trio in our Waterloo office.  Zack is currently at the Ivey Business School at Western University.


  • Speaking of the Waterloo office, another change in 2017 was the move to the newly renovated seventh floor at 180 King Street South.  We encourage those in the K-W area to visit Steve and Catherine (and Reg when he’s there) to check out the new digs.


  • We will have more exciting news later this year on the relocation of our London location!


  • JMRD continues to modify and improve our Financial and Estate Planning offering.  The Team boasts a multi-tier offering led by Marie Blanchet, a high level Financial Planner.  If interested in reviewing or putting a financial plan in place, please touch base at any time.


  • These changes result in the Team having 10 members in three convenient locations to serve you better.


  • Special mention goes to Sarah Johnstone for being recognized as one of NBF’s Top 30 Elite Investment Associates. This recognition was based on nominations received throughout the 2017 year for her professionalism, strong work ethic, and mentorship of peers. Sarah will be travelling with 29 of her NBF peers to Riviera Maya later this year in recognition of this fine achievement.  Thanks and Congratulations Sarah!


  • JMRD was recognized as one of the Top Investment Teams in the Canada according to Wealth Professional magazine.


  • JMRD was also recognized as one of the Top 50 financial advisors in Canada in the annual listing from Wealth Professional magazine.


  • A top priority the past few years has been to continue rolling out and improving our model program.  Our strides in 2017 exceeded even our lofty expectations.  Jaden Ropp spearheads this initiative and feel free to reach out to him with any comments or questions.  Also, check for regular updates and news related items in the weekly Market Observer.


  • We continued to improve our website –  Here you will find back issues of the weekly Market Observer email as well as snippets of JMRD events and team members out and about in the Community.


  • We are continuously working on the Team’s website and as always, your feedback is appreciated.


  • Electronic statements – We expect further improvements to the on-line experience in 2018 as the firm commits more and more resources to providing clients with more timely information accessible at any time of the day or night.  If you are not currently set-up for online access to your accounts please contact any member of the JMRD Team.


We look forward to sharing all these new initiatives with clients in the coming year and encourage you to send us comments and suggestions on ways for us to improve further.


Top Investment Objectives for 2018 and Beyond



Our objectives have not changed over the years and we will simply repeat them here with relevant updates.



  • Investors must continue to focus on their individual risk and reward profile.
  • Balancing the risk and reward trade-off by focusing on our best long term investment ideas while managing position size to avoid too much concentration.
  • After back to back years of solid equity returns, this has seldom been more important.
  • See anyone on the Team to review your profile and current asset allocation.
  • Are these two things still in sync?



  • Investors must have an investment plan and do their best to stick to that plan.
  • Review your Investment Policy Statement (IPS) and ensure your asset allocation is up to date and appropriate.  Please feel free to talk to us for clarification on this very important point.
  • All JMRD clients are set up with an ‘Annual Financial Planning Review’ and/or a ‘Two Year Client Check-Up.’  These services provide timely opportunities for us to follow up with our client’s to review and/or update their financial plans and assist in keeping our client’s information compliant and current.  That said, if you would like to speak to us about any changes in your financial or personal lives that may impact your investment situation in any way, please do not hesitate to reach out to us at any time.



  • Focus on income and get paid to wait for the markets to get through their inevitable weak periods. Volatility in the short term is what provides the long term returns.  For cash flow, invest in dividend and interest paying securities to cushion portfolios through times of weakness.


Though conservative by definition, these top three objectives allow us to position portfolios conservatively, but this is not necessarily a call to reduce equity exposure.


Perhaps the single biggest change over the past few years and what is an inevitable trend going forward is that interest rates are no longer falling but instead are trending higher.  This ‘tightening’ could put pressure on interest rate sensitive sectors.  Unlike during the past few years, we need to add a caveat that investors may need to sacrifice some income for growth.  The JMRD All-Cap Basket (ACB) and the JMRD US Growth Basket are good options to consider.  We will have full Basket Updates in the coming weeks’ Market Observers.


We would also recommend that clients review the account type that they have.  We are able to offer full discretionary accounts through our ‘Discretionary Portfolio Management Services’.  This account is taking our successful ‘Basket’ approach to the next level.  For more information on whether this fully discretionary approach makes sense for you specifically, please call to discuss.


Introducing Tom Deans and ‘Willing Wisdom’


JMRD has always been committed to life-long learning and continuing education.  In 2017, the Team had the opportunity to attend a fantastic presentation by Tom Deans who is the best-selling author of the new JMRD favourite ‘Willing Wisdom’.


Since attending his presentation, we have had the pleasure of chatting with Tom and are working on getting him out to speak at some of our events.  His message of planning early and sharing financial information has truly resonated with us.  One of his main suggestions is to have regular family meetings with parents, kids and even grandkids attending.  Paul Manders took Tom’s advice this past December and had a detailed family meeting with a formal agenda and a guest speaker.  Paul believes it was a very worthwhile exercise and welcomes any questions from our clients on the process.  Expect to hear more about Tom in 2018 and for those who know of his work, think about his 7 questions as you review the next section.


  1. What word best describes our family.  Share a family story that helps explain the word you selected.


  1. Describe how your parents acquired their wealth.  Share a memory about something your parents did to provide for you that left a lasting impression. 


  1. How would an inheritance advance your dreams for yourself, your family and your community?


  1. In the context of planning for the division of your assets, does fair mean fair or does fair mean equal?  Who are you planning on leaving your wealth to, and will you share a copy of your will with me? 


  1. Describe how your parents divided their assets and when you first learned of the contents of their will?  What would you do the same and what would you do differently?


  1. Describe the role you play or played in the final care of your parents. Can you name one thing that was or is being done well, and one thing you could change or wish you had done differently? 


  1. Describe in detail your last wishes. 

JMRD Strategy Comments – 2017 in Review and a quick look at the year ahead


Last year, global markets provided solid returns which is surprising given that news headlines were largely dominated by political uncertainty surrounding Brexit, North Korea, and virtually anything coming out of Washington. However, the truth is that 2017 is the year we saw the closing of the U.S. output gap, the best Eurozone GDP growth in a decade, the synchronization of global manufacturing in growth territory, and oil prices stabilizing in the $45 to $60 range. In the end, economic fundamentals are what really matters, and last year was a good reminder of this fact. In addition, despite higher interest rates, bond yields still remain relatively low based on historical levels.


In Canada, a high energy and resource component within our main TSX Index along with an absence of major tech companies explains most of the relative underperformance of Canadian equities in 2017. Still, the TSX finished with a 9.1% total return which was in-line with its last 20-year average. All TSX sectors except Energy delivered positive returns in 2017 and 8 out of 11 had sectors returns in the double-digit range. Signs of improving economic conditions helped move Canadian equities to new highs late in the year. The S&P 500 had a total return of 21.8% for 2017, the best performance since 2013. Despite taking a breather in the last two months of 2017, technology stocks outperformed with a return of 38.8%, followed by Materials (+23.8%) and Consumer Discretionary (+23.0%). On the downside, Telecom and Energy sectors were both negative.


Commodities rebounded last year with oil prices closing up 12.5% as continued production cuts by OPEC and rising global demand helped to stabilize the oil market. Strong economic growth, especially out of China, also buoyed copper prices which had their best year since 2010. Gold prices quietly gained 12.6% in 2017, benefiting from a weaker U.S. dollar and, to a lesser extent, rising geopolitical tensions.


After a weak start to 2018, with concerns about the Canadian economy and housing market, the Canadian dollar closed up 6.4% and finishing inches below the 80 cent U.S. mark, supported by oil prices and narrowing rates differential with the U.S.


International markets also enjoyed a positive year with Emerging Market equities ranked first among major asset classes, followed by the NASDAQ and the S&P 500 Growth, all posting returns well above their historical averages. Those indexes reflect their higher exposure to technology stocks, which accounts for about 28%, 46%, and 37% of the MSCI Emerging Markets, NASDAQ and S&P 500 growth indices, respectively.


In the coming year, we believe risk assets should continue to outperform, as the economic and financial backdrop remains healthy. But, as we are getting closer to the latter stages of the business cycle amid high levels of bullishness within the investing community, elevated equity valuations, and historically low volatility, investors should brace themselves for downside surprises.



Retirement Corner




Reads of the week












Economic Reports


Monday January 8th – Consumer Credit (CAD)

Tuesday January 9th – Housing Starts (CAD)

Wednesday January 10th – Mortgage applications (US)

Thursday January 11th – PPI Dec (US)

Friday January 12th – CPI Dc (US)



Earnings Reports


Monday January 8th –None

Tuesday January 9th – None

Wednesday January 10th – None

Thursday January 11th – None

Friday January 12th – BlackRock Inc, JP Morgan Chase, Wells Fargo & Company



Enjoy the weekend!

By | 2018-01-19T21:47:17+00:00 January 5th, 2018|JMRD Updates|0 Comments

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