JMRD Market Observer for January 6th, 2017 – Happy New Year!

In This Week’s JMRD Market Observer



  • Happy New Year to Everyone

  • Asset Allocation Strategy:  @realDonaldTrump: #over-promise, #under-deliver?

  • NBFM Forex (January 2017) – USD not far from peak

  • JMRD Basket Corner

  • Retirement Corner

  • Reads of the Week

  • Economic Calendar

  • Earnings Report



Happy New Year to everyone! 


The JMRD Wealth Management Team wishes you all the best in 2017!


In our first Market Observer of the New Year we focus on a number of items as 2016 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 2016 was another important year as much of our hard work paid off in ‘dividends’.  Here is a short list:


In 2016…


  • We added Sue Lidbetter to our team in a new role as the Team Manager and Event Co-ordinator.  Many of you have seen the great work she does for our various client events and she does many of the regular duties and tasks that are not directly involved with investing or the financial markets.  She has made an impact already and we are happy to have her.
  • We enjoyed our first full year with a summer student helping in the London office.  Morgan McCann was a great help last summer and she has agreed to come back again this summer to help the Team.
  • We also recently added a similar role in our Toronto office with the addition of Arman Bery, a student from McGill University who will be helping Zach in the Toronto office over this coming summer.
  • We further improved our Financial and Estate Planning offering and look forward to introducing Marie Blanchet, a high level Financial Planner, and Camille Kanhai, a lawyer specializing in Estate Plans, to more of our clients in the year ahead.  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 Catherine Sunga-Doucet for being recognized as one of NBF’s Top 30 Elite Investment Associates.  This recognition was based on nominations received throughout the 2016 year for her professionalism, strong work ethic, and mentorship of peers. Thanks and Congratulations Catherine. 
  • We had our most successful United Way campaign ever and this initiative continues to be spearheaded by Paul Manders and Joe Dibrita on an annual basis.
  • Matt Aalbers passed the first level of his Certified Financial Planner (CFP) designation and is well on his way to getting the full designation as he works through the rest of the requirements.
  • The Team was again recognized by the firm by being awarded the Team of the Year as well as the Social Commitment Award for our work in the community. 



New Offerings and Services!


In 2016


  • 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 2017 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.
  • 2016 was another big year for social media. Expect more enhancements in 2017!
  • Most of the Team can now be found on LinkedIn which is a tool to stay connected with our clients and colleagues and to share updates in a timely fashion. Please feel free to “Link up” with us!


    • Reg Jackson –
    • Paul Manders –
    • Jaden Ropp –
    • Zach Davidson –
    • Catherine Sunga-Doucet –ñga-doucet/7a/b0b/402
    • Steve Lockner –
    • Matt Aalbers –
    • Joe DiBrita –


  • Twitter continues to be an important tool for the JMRD Team – Follow JMRD Wealth Management on Twitter at: or @JMRDwealth
  • The Team is posting regularly using both LinkedIn and Twitter


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.



Significant changes coming in 2017: CRM2 – What’s that?


CRM stands for Client Relationship Model – the name given to a series of new regulations being applied industry-wide that govern how providers of investment services deal with their clients. The first three components of CRM (referred to collectively as CRM1) have been in force since July 2013. CRM2 simple refers to the second wave of regulatory amendments that have been implemented since 2014.


In essence, CRM2 is all about disclosure and transparency – it defines specific information relating to investment costs and investment performance, and requires that all industry members provide this information to each of their clients annually.  Over the last number of years, The JMRD Team has been proactive in communicating this information to clients, in a different format, during our quarterly reviews. 


You have probably already noticed some changes to your monthly statements and more changes are in the offing for your December statements, providing more information on annual performance and fees.  If you are have any questions or comments after reviewing your December statement, please do not hesitate to contact anybody on The JMRD Team.



Top Investment Objectives for 2017 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.



  • 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 a ‘Two Year Client Check-Up’ – these services provide timely opportunities for clients to review or implement plans.



  • 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 over 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 are instead trending higher.  This ‘tightening’ could put pressure on interest rate sensitive sectors so unlike 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 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.  


What is JMRD excited about going into 2017:  The year of the Model!


In previous Market Observers we have alluded to our JMRD Model Portfolios.  We spent a lot of time last year revising and fine tuning the inner workings of the Models and we plan to use them on a larger scale in 2017.  We believe the best way to get exposure to all of our JMRD Baskets as well as our other best investment ideas is through the JMRD Models.  There is a model available for each risk profile i.e. Conservative, Balanced, Growth and Maximum Growth.  As mentioned above, we will be utilizing our own Baskets, standalone exchange traded funds (ETFs) and investments offered by other external managers, in different proportions, based on each unique risk profile.  We feel that using external managers to complement JMRD’s own ideas will add further diversification and risk reduction to each model profile. On the equity side, some of the external managers we are using include Cambridge Global Asset Management and Black Creek Investment Management, both under the CI Financial umbrella, as well as Mawer Investment Management.  On the bond or fixed income side we like the management teams at Pimco Asset Management, Manulife Asset Management and Lysander Funds. 


The models are offered on a discretionary basis which means the day to day decisions are made by the Team.  The asset allocation and performance are discussed with clients quarterly and rebalanced after each review. You will be hearing more about these Models in future Market Observers but please do not hesitate to call or email any JMRD Team member if you any comments or questions.  


Initial Thoughts for the Year Ahead


At this time last year, oil prices were falling, Chinese economic growth was coming into question and even the “R” word (recession) was being discussed by some U.S. economists throughout the first couple months of the year. The S&P 500 Index traded 10.5% lower during the first 28 days of 2016, the worst start to a year…EVER.  As the year progressed, oil prices recovered, Chinese economic data met expectations and US businesses consistently added more jobs each month, which put to rest recession fears. The aftershocks of the Brexit vote were felt in the ensuing days but cooler heads prevailed and the markets recovered.  The Trump election victory was widely unexpected and the resultant market move higher was even more surprising to the vast majority of pundits.  The lesson in all of this is that there are only so many things that investors can control, which are covered in parts One and Two of the OBJECTIVES FOR 2017 section above: ensure your asset allocation complies with your risk tolerance and investment objectives and have a financial plan and stick to it, even in times of greater uncertainty. 


We felt that the article at link below provides a good list of key questions the world is pondering as the year starts anew.  Number 10 best echoes our sentiments.


Now that another year has passed, it means that tax season is just around the corner  Be sure to tune in to the Market Observer over the coming weeks for information on important dates to remember and tax tips that may benefit you when preparing for your tax filing.



Asset Allocation Strategy:  @realDonaldTrump: #over-promise, #under-deliver?



  • Fixed income products seem poised to shift back to their more traditional role of offering a hedge against downside risks, rather than being a real driver of positive returns in a traditional asset-mix, as the heydays of the big bond bull market now seem to be ending.


  • Asset allocation decisions must be based on relative comparisons, and credit products look attractive in this light compared to government bonds, especially under the current economic conditions. This should limit the potential for defaults. We are aware that our suggestion of being short duration implies a loss of term-premium revenue. Taking credit risk helps us mitigate this shortfall.


  • While it is undeniable that the environment materially improved for the whole energy complex, the equilibrium remains fragile. High prices will enact a response from U.S. producers and will quickly suffer from downside pressure. This situation should persist until we have reached the full production capacity in the U.S.


  • Technically, this is the third major bull market for the USD since the 70’s and there is potential for further appreciation. Until other major central banks start moving their stance towards a more restrictive monetary policy, the path of least resistance for the greenback will be to increase in relative value.


  • How equities fare in 2017 will depend on how much earnings growth corporations will generate: will it be enough to compensate for unattractive? On the short-term horizon, we believe equities are vulnerable to a pullback once the optimism generated by promises of tax reform and infrastructure projects wanes. Therefore, we suggest a neutral position for the time being.


See the full article.



NBFM Forex (January 2017) – USD not far from peak




  • Still-favourable yields mean the trade-weighted US dollar has room to run over the near term. Above-potential U.S. GDP growth over the next couple of quarters and a resilient labour market could have markets price more rate hikes over the coming months than the two they currently expect for this year. But the USD rally could run out of steam by the second half of the year if, as we expect, the Fed tones down its hawkish message as it assesses risks posed by past USD appreciation. We are leaving our currency forecasts largely unchanged this month.


  • Some of the forces that propelled the Canadian dollar last year, such as foreign portfolio inflows, are set to fade. The persistence of soft oil prices and the Bank of Canada’s dovish rhetoric could cause a further widening of U.S.-Canada interest rate spreads. The large current account deficit is also a concern for the loonie, more so considering it is being financed entirely by short term foreign capital flows which can reverse on a whim. We continue to expect USDCAD to head towards the upper end of the 1.30-1.40 range by mid-year, before coming back later in 2017.


See the full article.



JMRD Basket Corner


DIG Basket


SNC-Lavalin (SNC) – 407 ETR announced its 2017 rate schedule last week – toll rate growth is still impressive (7% to 13% depending on segments, timing)


See the full article.


Whitecap (WCP) – On Thursday, Whitecap provided a brief corporate update, which included Q4/16 production of 50.6 mboe/d (600 boe/d above our forecast) and the closing of $200 million 3.46% senior notes (due 2022).


See the full article.


All-Cap Growth Basket


New Flyer (NFI) – Houston awards New Flyer a contract for 100 Xcelsior buses


Shopify (SHOP)Shopify spikes 8% after report of expected Amazon sales partnership announcement



Retirement Corner


1)     Eight things you need to know about your TFSA to maximize your money


2)     Six tax-wise New Year’s resolutions for 2017


3)     Canadians to face some tax changes in 2017


4)     Here are the new numbers you need to get a jump-start on your 2017 taxes



Reads of the Week










Economic Reports


Monday January 9th – None

Tuesday January 10th – Canada Housing Starts and Building Permits;

Wednesday January 11th – None

Thursday January 12th – Canada Teranet/National Bank Home Price Index; US Initial Jobless Claims

Friday January 13th – US Retail Sales, US Consumer Sentiment, US Producer Price Index



Earnings Reports


Monday January 9th – None

Tuesday January 10th – None

Wednesday January 11th – Cogeco, KB Home, Sirius XM Canada

Thursday January 12th – Sandvine, Uranium Participation Unit

Friday January 13th – Bank of America, JP Morgan, Wells Fargo



Have a good weekend!

By | 2017-01-09T18:36:22+00:00 January 6th, 2017|JMRD Updates|0 Comments

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