Probably the biggest factor to client portfolios this year is the same as last year…except instead of a benefit it is a negative, and that is currency. Last year the falling CDN$ helped clients have positive returns when the TSX was down close to 10% and the U.S. market was flat. This year with the U.S. market flat and the CND market up 2-3% a stronger CDN$ is creating negative returns year to date. The CDN$ is up almost 6.5% during 2016 so clients can have been negatively affected by up to this amount depending on their portfolio.
The ‘team’ that I put the most faith in (Signature) believes we are in a range from 68 cents to 80 cents and that we will visit the 70 cent range again, perhaps when the U.S. starts raising rates. That move lower will help client portfolio’s...if they do not change their portfolios significantly.
PLEASE REMEMBER…our target returns are for periods of 5+ years…not 5+ months. For those that cannot have any exposure to volatility (short term negative returns) we need to position the portfolio in cash, bonds, and GIC’s. THE 10 YEAR BOND YIELD IS CURRENTLY 1.25%.
I am very confident portfolios are positioned properly to obtain their target returns over 5 year time frames. I encourage you to arrange a meeting to discuss your personal situation and to become comfortable that your asset allocation is correct to meet your short term cash flow NEEDS and your longer term SECURITY as well.
Encana bond maturing on May 5th 2019 currently yielding 6.23%* in US$
This may be appropriate for larger accounts (200,000+) particularly if you believe in a weaker CND$
A 3 year GIC is currently 1.88%
BEN CHENG (Aston Hill) believes ENCANA will be a survivor through this cycle of lower prices.
*bond yields can change
H&R has lagged the Cdn reit market by 3% - 6% YTD
Concerns over Calgary exposure is overdone. Cenovus and Encana will be survivors through this cycle
Tax advantaged Yield of 6.4% currently
Solid management team led by Tom Hofstedter
Possible inclusion into the TSX 60 this year
Still trades at a 15% discount to its NAV
I also like:
CI Financial (CIX)
Brookfield Infrastructure Partners (BIP/UN.to)
The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. This does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision.