Optimism #53 - August 19, 2022

Dear clients and friends,

Allen D. from Alberta was the only person that correctly answered our question in the last edition, that the downturn in 2015/16 was largely due to collapsing energy prices.

Portfolio values have rebounded nicely from the end of June.

In this morning’s Globe and Mail, Brian Belski, BMO’s Chief Economist, is quoting as saying that “Investors appear to be stepping back from the brink and realizing that while rising rates will weigh on economic growth by design, the outcome is not necessarily a deep and prolonged recession.”

Prescribed rate loans, where CRA sets the minimum rate, are going up.

They were as low as 1% for a while and are now going to 3%.

Good news for those of you who have them.  The interest rate remains fixed, indefinitely.

Dividend increases:

Vermillion, Canadian Natural (CNQ) is paying a ‘special’, one time dividend some time in August.

Insiders are buying at Cenovus, (John McKenzie bought 1.1 million worth of shares in an account now holding 11 million worth.  Now that is confidence.)

Others are buying as well at Skeena Resources and Arc Energy as well. 

To a certain degree, a Portfolio Manager’s job is to protect us from ourselves, our emotions especially.

There is a new ‘First Home Savings Account’ available for home buyers. Seems better than the original HBP where you use up to $35,000 of your RRSP for a down payment.  It was mentioned in the Spring Federal Budget but there are new details in this article:

Finance releases details on new First Home Savings Account | Investment Executive

Here is a link to a wonderful article about staying happily married in retirement:

Tips on keeping your marriage together in retirement | The Globe and Mail

October.  This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.  --Mark Twain.

Happy Friday. Have a great week.

Derek Moran