When it comes to wealth management, it is more than just delivering products and providing good service. It is about understanding someone’s entire situation and putting the pieces of the puzzle together.
How does someone’s life fit with their investments, life insurance, mortgage, other assets like cottages or rental properties, kids and aging parents? These are all variables to factor in and consider when structuring a plan for a client.
Once we’ve put that plan together it’s about slowly and consistently moving forward financially.
The way that I do this personally and also for my clients is using quarterly targets (read: goals) for myself and semi-annual targets for my clients.
This month starts the beginning of the fourth quarter and here at TK Dale Wealth it means a new target to hit not only in business but also at home.
I review how we did last quarter, make note of what went right and wrong and answer the question: Did we hit our mark?
There is no judgement, just a pass, no pass assessment.
Then I find out what is most important to us that is in alignment with who we are as individuals and then set new targets.
There is a more in depth process to it which I’m happy to share but perhaps you want to think about your own targets. Is there something you’ve been wanting to do? Have you been putting off getting a new financial advisor.
Make it a target for this quarter. The steps are simple but not easy:
- Decide WHAT you want to accomplish
- Decide WHEN you want to accomplish this by
- Decide 4 simple steps to accomplish this
For example the 4 steps could be:
- Make a list of potential financial advisors
- Pick three to interview
- Book and go to three meetings (even one meeting is better than none)
- Choose the winning advisor
This also works for getting a new job, making that next sale, moving houses, starting that fitness program or renewing your vows.
The US S&P 500 was up 1.72% while the TSX was up 1.32% in September.
News outlets continue to be a perennial source of pessimism however there are bright spots too. Keep in mind that we are positioning clients on the conservative side, are being very selective on which countries to invest in and utilize a cash flow based asset allocation strategy that focuses on securing the cash flow needs and then once those needs are met the remaining funds can be put into growth assets.
Having said that, we have seen similar data weakness in 2013 and 2016 which we all know has worked out fairly well. While there are always potential risks on the horizon, we will share a couple of interesting ones that hit the headlines last month:
- The Bahamas saw Hurricane Dorian wreak havoc which was regarded as the worst natural disaster in the country’s history.
- In Europe the European Central Bank (ECB) decreased their interest rates and started quantitative easing.
- Check out my podcast, video and write up on how negative interest rates in Europe have caused negative interest rate mortgages and what that means for borrowers here: https://tkdale.com/2019/09/10/negative-interest-rate-mortgages/
- Drone strikes from Yemen knocked out half the crude production in Saudi Arabia only to return to full production within a week or two.
- The US Fed had to step in to help out liquidity in the overnight rates as repo rates went above 10%.
- As a result the Fed is going to increase its balance sheet to ensure stability in the markets.
- The world’s oldest travel firm Thomas Cook (dating back to 1841) went bankrupt with 1.7 Billion GBP in debt.
- Talk of Trump impeachment which seems unlikely at present moment.
- IPO’s of several US companies have either gone poorly or been shelved before hitting the market.
- Retailers continue to go bankrupt with Forever 21, Gymboree, Payless Shoes, Diesel and other US brick and mortar stores going bankrupt in 2019.
Those are the headlines which are potential factors that may affect the economics of an economy. Not all will translate into actual economic changes even though they move around the markets in the short term.
To ground the conversation a little more here are some highlights of the economic data:
- Manufacturing in the US and Germany showed continued weakness causing recession fears for both of the countries
- China had continued weakness in vehicle sales, outstanding loan growth and retail sales
- US core inflation remains healthy at 2.4% but the more volatile overall inflation was more muted at 1.7%
- US GDP growth rebounded
- Canadian inflation was slightly below target and producer prices was weak but beat expectations
- Canadian manufacturing rebounded
We have seen periods of weakness like this in 2013 and 2016. While there are new risks that weren’t present at the time such as the increased tariffs and trade war with China, Europe and Japan.
Further central banks across the world appear to be ready to step in and prop up asset prices with reassuring the markets of their willingness to help, more quantitative easing and decreasing interest rates.
- Set targets regularly
- There is always negative news
- Focus on economic data and news that will affect data with a high probability
Overall I see the markets with higher valuations and debt concerns. As inflation is on the lower end for most developed country central banks and weakening data I see interest rates range bound with potential for lower rates.
I firmly believe in using a cash flow based asset allocation to protect cash flows and look for growth in specific countries.
Trevor Dale is licensed to discuss and deliver on solutions for investments, insurance and mortgages. Give us a call for a free consultation.
Until next time.
Trevor Dale, CFA
This report is provided by TK Dale Wealth Management Inc. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic, investment and market analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. TK Dale Wealth Management Inc. is not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.