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March 2020
  • Beware the Ides of March
  • Model Portfolio
  • Final Thoughts
Beware the Ides of March
Here we are in March, wondering if winter forgot about us. It seems that fear and gloom have replaced the missing snow and ice. You might have noticed that the stock market isn't doing so well. Before you conclude that now would be a good time to sell before the market goes even lower. Try this:

  • Close your eyes and put your hands over your ears. No really, the media is not your friend.
  • Remember:  Investment Success = Have a Strategy + Stick to it
  • Take your own risk temperature. Has it changed? If it hasn’t, use this dip to buy more.
  • Focus on cashflow not assets
  • Ask yourself: “If I sell now, what am I going to buy? When am I going to buy it? Will I regret this?

No one now doubts that Covid-19 is a serious epidemic with economic effects. The virus has spread so quickly because we are so connected. This is true for people and for companies. The popular Ford-150 pick-up contains over 10,000 parts, sourced from all over the world. It hasn’t happened yet, but with limited stockpiles, companies will be forced to halt production of items where they can’t easily source parts.  It reminds me of a story from WWII, where areal photographs captured thousands of German planes grounded near the end of the war. It seems they were ready to go except for ball bearings manufactured in a factory in Schweinfurt that had recently been taken off-line due to Allied bombing efforts. 1

If the virus peaks and recedes and companies can avoid serious supply disruptions, the world economy may recover the lost output by “catching up” with outsized production later in 2020-21. In this ideal scenario, the stock market will continue its relentless march upward and this will turn out to be a stock market dip. Sort of like the many dips it has experienced over the past fifty years:
Let me close by offering some thoughts to counter the many negative emotions you may be feeling:

  • Central banks stand ready with interest rate cuts (how low can they go?) and spending plans to offset the effects of the coronavirus
  • The science of epidemiology has grown by leaps and bounds recently and stands ready to respond to this potential world-wide health crisis
  • Private sector companies ranging from Tim Hortons to Johnson & Johnson are working to contain and find drugs to treat the virus2
  • On that last point, Bloomberg reported that 42 million Americans are able to work from home.2 Hey, I am typing this from my living room. 

Call us if you need to talk.
Mark Orr

1 Coronavirus – The Catalyst for System Failure?
2 Watch the Storm From Your Window: Great Buying Opportunities Begin With Fear.

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact the appropriate professional. Aldershot Financial Group is a trade name of Aligned Capital Partners Inc. (ACPI). ACPI is a Member of the Canadian Investor Protection Fund ( ) and the Investment Industry Regulatory Organization of Canada ( ). Mark Orr is registered to provide investment advice and transact in securities/mutual funds in the provinces of Ontario, Manitoba, and B.C. The opinions expressed are those of the author and not necessarily those of Aligned Capital Partners Inc. Investment products are provided by Aligned Capital Partners Inc. (“ACPI”). Any advice which may be given in respect of non-securities services (including insurance) is given by your advisor solely, and no such advice is given in their capacity as an agent of ACPI. Accordingly, ACPI is not liable and/or responsible for any non-investment related business conducted by Mark Orr. The Canadian Investor Protection Fund (CIPF) does not cover any non-securities related business conducted by Mark Orr.
Deferring OAS

Did you know that you can defer your Old Age Security Pension to age 70? Ordinarily, your OAS begins at age 65. If you elect to defer for the maximum 5 years, your pension will rise by 36% for the rest of your life. That’s $2,624/year based on current rates. You may want to consider this if your OAS will be clawed back due to income over $76,000. If you are already receiving your OAS, you can still elect to defer if within 6 months of starting to receive it. Have questions? Let’s talk about it at our next meeting.

Source: QuickBooks Small Business Centre
This graph represents a hypothetical portfolio allocated to 45% DFA Five-Year Global Fixed Income Fund Class A, 15% DFA Canadian Core Equity Fund Class A, 15% DFA US Core Equity Fund Class A (from January 31, 2008 to January 31, 2009) / DFA US Core Equity Fund Class A (H) (from January 31, 2009 to February 29, 2020), 15% DFA International Core Equity Fund Class A and 10% DFA Global Real Estate Securities Fund Class A, initially invested on January 31, 2008 with pricing up to February 29, 2020 using monthly data and rebalanced on a month-end basis. The data series has been smoothed. This information is for informational purposes and not meant to be construed as investment advice. Actual client portfolio allocations and returns will vary depending on the client’s investment profile. 

Commissions, trailing commissions, management fees, and expenses may all be associated with mutual fund investments. The indicated rates of return are the historical annual compounded total returns including changes in unit/share value and reinvestment of all distributions/dividends. They do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the fund facts and consult your Advisor before investing.
Aligned Capital Partners Inc. is a member of the

John Booth, Senior Financial Advisor, CPA, CA, CFDS, CFP
Mark Orr, Senior Financial Advisor, CPA, CA, CFP, CIM
Nicholas Cup, Associate Financial Advisor, CFP, CIM