Ravens Rock Wealth And Estate Planning

Get out there and enjoy the last summer long weekend before school starts.

Monday's don't have to be hard. Start your week off strong!

Let's get this excited for Friday!

Good afternoon,

Investors have seen volatility resurface with a vengeance due to a series of events that unfolded last week - Last week’s somewhat dovish Fed announcement and weak US employment numbers, were the perfect ingredients. After the Fed’s announcement, expectations for Fed rate cuts in 2024 went from just over two to over 4 in a matter of days, with a 50-bps rate cut at the next meeting fully priced in. Next, investors were troubled by a weaker than expected US July job report (114k jobs created vs. 175k expected) which resulted in an unemployment rate that breached the Sahm rule. The breach of the Sahm rule has historically been a strong signal of an upcoming recession.

Global markets were vulnerable to a pullback given crowded trades, lofty valuations, trending economic weakness and earnings expectation. The Nikkei (Japan’s stock index) sold off by more than 12% a few days ago only, indices biggest one-day selloff since “Black Monday” in October 1987 only to recover nearly 10% the following day. The past couple of days has seen the S&P 500, S&P/TSX and MSCI Europe selloff by approximately 6%,4%,6% with the VIX (a gauge of market fear) spiking. Global Bond yields fell across the world reflecting the slower growth environment moving forward.

For the S&P 500, it had been seemingly “priced for perfection” as market participants were expecting a soft landing for the US economy and a very smooth equity market. If any economic data were to disappoint, we believed that market conditions were ripe for a sell off.

According to Bloomberg, trades looking to capitalize on low volatility had tripled in size since Covid and those looking to capitalize on carry trades ballooned as well. However, when volatility picks up, covering these trades tends to exacerbate the issue. The Cboe Volatility Index (VIX) breached 30 for the first time since October 2022 on Monday. Market volatility had been so calm that, prior to today, the S&P 500 Index had only experienced two days with more than a 2% drop, since the beginning of 2023, a total of 399 trading days.

What does your gameplan look like if volatility persists?
Likely, more volatility in the near term. However, it’s at times like this, that investors need to take a step back. For one, despite the selloff, global markets are still materially positive for the year. Market corrections are normal and very hard to predict. Since 1980, the S&P 500 Index has fallen an average of ~14.0% in any given calendar year but is positive 75% of the time with an average return of ~10.0%. Periods of heightened market volatility can often even be an opportunity for longer term investors. Since 1990, the S&P 500 Index has averaged over 22% in the 12 months after the VIX has breached the 30 level.

This also serves a reminder to those that may be overweight equites that bonds hold an important place in an investor asset allocation as global economies continue to weaken, and rates continue to fall. An emphasis on higher quality sovereign and credit. For those with longer term time horizons, near term weakness moving forward provides an opportunity to allocate cash into quality risk assets.

Warren Buffett famously said that investors should be, “fearful when others are greedy, and greedy when others are fearful.

Warm regards,
Christopher Rovert
President

We are aware of the recent volatility in the markets and wish to bring you an up-to-date summary from CI Funds. Please click below for a link to access a quick sound bite from Peter Hofstra, CI Funds Co-Head of Equities from August 6, 2024.

North American Equities: Navigating high volatility and the economic backdrop - Capital Insights | CI Global Asset Management Welcome to the CI Global Asset Management Capital Insights podcast. Here you’ll discover what our thought leaders and portfolio managers have to say about the trends, events, policies and politics around the world that are creating investment risk...

Attention Millenials!! It's never too late to start investing. We understand now more than ever- putting money aside is a struggle. Contact us today. We offer customized financial plans to best suit your needs- and don't forget- we can ALWAYS make changes as your financial situation changes!

Good afternoon everyone,

While most of Canada enjoyed a nice long weekend, U.S. and global markets saw red.

There were a number of reasons for the slide, but largely attributed to 3 main ones:

- Unwind of the carry trade with the Japanese Yen and risky assets
- Weakening economic data that shifted from positive themes (inflation falling) to negative (unemployment rising)
- Earnings remain somewhat robust but are being revised downward & investor AI trade expectations becoming loftier and more demanding

RBC GAM and BlackRock both share the belief that this is more likely an air pocket in the market than a sustained recession. When indiscriminate selloffs like this occur, it can create attractive buying opportunities for investors. We are of the belief that U.S. recession fears may be overblown, and that risk assets have the opportunity to recover as recession fears ease and the carry trade dynamics stabilize.

Thanks,

Christopher Rovert
President

Our office is closed today. Enjoy your holiday Monday!

Ravens Rock is wishing you a wonderful August long weekend!

Sunshine month is here!! Happy August!

How much do I need in my investment portfolio to retire?

We get this question all the time. Our gleeful response? "The more the merrier". Truthfully, the figure is 100% predicated to the lifestyle you envision in retirement.

But if you need a visualization, see infographic below.

TGIF! Do you have your happy dance on today?!

ALways a great time gaining insight from top Portfolio Managers. here I'm with Dan Rohinton with iA at the annual HUB Financial Golf event

Another great event at Copper Creek hosted by Hub. Great seeing the life insurance carriers here supporting all of us.

We finished the round with a -4.

My pairing for the next 18 holes at Copper Creek.. Good help me I'm with Miles! Lol

Article 3 of 3

Getting back on Track!

https://www.rbcgam.com/en/ca/learn-plan/investment-basics/how-to-get-back-on-track-in-uncertain-times/detail

Article 2 of 3

Bond Basics

Here is a great article provided by RBC that provides education on bonds.

https://www.rbcgam.com/en/ca/learn-plan/investment-basics/bond-basics/detail

Good morning everyone,

Yesterday morning, the Bank of Canada cut its benchmark interest rate by 25 basis points for the second consecutive time, a widely expected move that brings its policy rate to 4.5 per cent.

What does this mean for clients sitting in cash looking to get their financial plans back on track?

• Yields in money market and cash are dropping
• Core fixed income can not only provide income for clients, but also return potential (cap gains are more tax advantageous vs pure interest income)
• Fixed income offers stability, income, equity diversification and potential for capital appreciation as bond prices rise with each rate cut

The link below is 1 of 3 articles I will be posting.

https://www.rbcgam.com/en/ca/learn-plan/investment-basics/the-hidden-cost-of-too-much-cash/detail/

No pool in your backyard and want to beat the heat? No stress! Pack up the kids and head on over to your local pool and soak up the sunshine! It's even better with a group of friends.

Rainy day have the kids feeling blue? Arcades provide hours of fun with friends!

Take the kids on a "park hop" day! The goal is to try and get to as many parks as your can in one day!

TGIF! Do you have any adventures planned for this weekend?

Invited to an elite group meeting with Manulife. Estate Planning... my wheelhouse!

When your client can't meet up to a Café for coffee and cake because of time constraints to receive her new life insurance policy... you bring the coffee and carrot cake to her house to deliver it.

THAT'S how Ravens Rock Wealth And Estate Planning rolls!

Carrot cake provided by Milestones for those inquiring minds who want to know.

We don't leave anything "Overlooked "

Summer activities don't always have to be fast paced. Slow down with the kids and get out on the water for a peaceful canoe/kayak.

Out here in Unionville with the Manulife Equity team getting briefed and updated on fund performances. Always nice reconnecting with a few PM's I know on a first name basis. Many of our clients hold funds that this Equity Team manage.

Grab some sticks and roast marshmallows this summer with the kiddos. Bonus points if someone plays the guitar!

Ravens Rock Wealth And Estate Planning 2nd Quarter Report - http://eepurl.com/iTOUco