Canada Life Amalgamation

DLD Quarterly Money Thoughts (Sept 2019) includes: Canada Life Amalgamation, Different Types of Investor Behavior and DLD in the Community and Media

Most of you will have received one or more packages from Canada Life asking you to vote if you’re in or not in favour of the amalgamation of London Life, Canada Life and Great West Life. We wanted to provide you our thoughts as policyholders ourselves. All three companies are owned by the same parent company – Power Corporation of Canada:

The differences between the products offered by the three companies are quite minor and from a marketing perspective, we saw it coming that they would eventually consolidate one day. For those of us who already own policies, we’re not affected, our policies are maintained as they should be. We believe the participating accounts coming together will create a larger and stronger account. So if you haven’t already done so, we encourage you to log on and vote.

Please do not hesitate to contact us if you have any questions.

Different Types of Investor Behavior

As investors made their way through August, the themes of trade protectionism and slowing global growth dominated headlines. These lingering concerns have many people questioning whether the current economic expansion can last, or if we’re a Tweet away from a recession. Google Trends depict a heightened level of anxiety, as the popularity of the search term “recession” has climbed to levels not seen since the Financial Crisis.

There will always be individuals who spend their time trying to predict when the next recession will occur. The reality, however, is that no one can do this with certainty. What’s more, even if it were possible, investors are better served following a suitable financial plan that’s designed on the premise that they’re likely to encounter multiple recessions over a long-term horizon.

For evidence of this, let’s compare the experience of three investors who share a plan of investing $250/month into the Canadian equity markets. However, the investors exhibit varying levels of commitment to their plan.

  1. Steady Eddie. Doesn’t follow the daily headlines. Instead, he follows a consistent dollar-cost averaging (DCA) strategy through all market and economic environments.
  2. Crystal Ball Pete. In an effort to protect his wealth, he places new contributions into cash exactly when each recession starts. Plus, he only deploys the built-up stash once the economy officially exits the recession.
  3. Nervous Nelly. Places new contributions into cash one year before each recession. And, only deploys the built-up cash into the market a year after the economy officially exits the recession.

Above we’ve charted how each of these investors have fared over the past 45-years, with each investing a total of $135,000 into Canadian equities during this time.

Important takeaways:

  • Volatility works both ways. Recessions are not synonymous with negative market returns. In fact, over the past 45 years, the top-two monthly gains in the S&P/TSX occurred during recessions. Delaying contributions during these times means investors missed out on excellent opportunities to put new money to work. It’s the reason why Steady Eddie ended up on top.
  • Market timing is hard. When recessions occur, there are no horns ringing in the street to signal their arrival. Crystal Ball Pete is generally a myth, not a reality. Rather, there is often a significant time lag before the start of a recession is officially declared. As such, investors who attempt to time the market based on economic signals are more likely to have an experience resembling that of Nervous Nelly (or worse) – that is, significantly trail the results of a consistent approach. For investors, it’s important to view recessions and market pullbacks as inevitable over a long-term horizon and prepare for them in the context of a financial plan. Realizing they’re just part of the ride makes it easier to focus on long-term goals and the plan that’s designed to achieve them, regardless of what lies ahead.

RBC GAM Daily Market Update. September 5, 2019


DLD in the Community!

The SHRED FOUNDATION was established by Wade Simmons (Professional rider, Red Bull Rampage winner and inductee into the Mountain Bike Hall of Fame) and David Drummond (big hearted, non-professional rider, lover of all things mountain biking). Both Wade and Dave have immense passion for the sport and are grateful to be able to work together to create a memorable day on the mountain and to raise money for a great cause. The goal of SHRED is to provide financial support for local amateur up-and-coming mountain bikers so that they can more easily achieve their goals. The annual recipients will need to show athletic fortitude, community involvement, and financial need. The recipients will be selected from a list of recommendations from individuals in the industry.

On September 07, 2019, the 1st Annual SHRED FOUNDATION fundraising event took place in North Vancouver where participants enjoyed mountain bike shuttles to various trail routes on Seymour Mountain guided by Wade “The Godfather” Simmons and other mountain bike professionals who were in attendance offering their expertise as well. After the Mountain Biking excursions, there was a Burger & Beer at The Raven Pub and a Silent Auction. Over $18,000 was raised and these funds will be distributed to deserving youth at a gala event in early 2020.

The Globe and Mail

We’re in the Globe & Mail!

“Canadians are clinging on to affordable rent as long as they can.”