Summer 2024 Market Update

Comparatively, U.S. tech names riding the Artificial Intelligence (AI) wave continued to see out-of-this-world returns, with Nvidia continuing to lead the way. It also briefly became the largest company in the world by market cap on June 19th. Between Nvidia, Microsoft, and Apple, the S&P 500 has never had a higher weight held by just three companies – reaching 21.1% on June 14th. This level of optimism and excitement around AI has provided good investor returns, and we’ve been happy to see the outcomes our clients have received this year. We are cautious about the pace at which the markets have grown, and we wouldn’t be surprised to see the markets take a time-out to cool off at some point this year.

We saw the first blink from the Bank of Canada in the second quarter of 2024, as they delivered their first interest rate cut since the hiking cycle began in 2022. Tiff Macklem, Governor of the Bank of Canada, cited cooling inflation and growing confidence that the rate of inflation will continue to move towards the 2% target, as reasoning behind the decision. The change brought modest relief to many Canadian borrowers who have felt the squeeze of higher interest rates for the past two years. This change contrasts with the U.S. Federal Reserve; also a change from the often lock-step moves we’ve seen from the two central banks historically. Stubborn inflation and a resilient economy have resulted in reduced expectations for cuts to the benchmark interest rate in the U.S.

The first interest rate cut also aligns with our expectations around fixed income assets. While it has been a slow-moving shift, we continue to expect improved returns from fixed income going forward. After flat to negative performance in the first quarter, the bond markets are taking notice of global central banks slowly beginning to reduce benchmark interest rates, resulting in improved performance in the second quarter. We expect this to continue at a moderate pace through year-end.

Looking to the second half of 2024, we would not be surprised to see a “cool down” in the equity markets, that could offset the continued improvement in the bond markets. We continue to believe in diversification across geographies, market cap, and asset classes to reduce the impact of the performance of any one market.  We will watch intently to see how the interaction between inflation and interest rates develops, though we expect them both to continue to decline, hopefully at a modest pace.   We continue to favour an overweight to high quality fixed income investments in client portfolios as we begin to see further benefit from higher interest rates, as well as the decline of benchmark interest rates going forward.

Our Estate Planning Partners

This quarter, we focus on Estate Planning and its many facets. Estate planning is crucial as it ensures that an individual’s assets and affairs are managed according to their wishes after their death or incapacitation. It helps in minimizing potential family disputes by clearly outlining the distribution of assets, thereby providing peace of mind and financial security to loved ones. Additionally, estate planning can significantly reduce the tax burden on the estate, preserving more wealth for heirs. It also allows individuals to designate guardians for minor children and make provisions for their care. Overall, estate planning is an essential step in securing a stable and organized transition of wealth and responsibilities.

There are many pieces to an effective estate plan:

• A Will detailing your wishes and ideally an effective estate administration plan.
• A Power of Attorney – provides someone with the ability to help you manage your financial affairs, both before and after capacity issues arise.
• A Personal Directive – dictates how a person should make decisions related to your health and/or end-of-life.
• Philanthropic goals, if appropriate.
• Managing and planning for tax on your estate.

We are fortunate to have many partners in the Estate Planning area that we encourage our clients to utilize, dependent on their own needs:

An online platform that provides simple, cost-effective Wills. This option would be most appropriate for young individuals or families with simple family structures and balance sheets, or in a pinch if no Will currently exists.

Ideal client – a person or couple who have a simple estate and need a standard Will, Personal Directive and/or Power of Attorney.  Remember, a simple Will is better than no Will.   If cost has been a barrier to setting up a Will, Willful is a great option.

Please reach out to us for access to our Preferred Client program.

Dealing with a Local Lawyer

When it comes to estate planning, sometimes discussing with an expert in-person, provides valuable benefits.   An Estate lawyer can customize solutions tailored to your families needs and are accessible by the Executors before, during, and after the Estate settlement process.   Also, having an actual lawyer ensures clarity for your loved ones.  They’ll know how to handle your assets, medical decisions, and other critical matters when you’re no longer able to communicate.

If you would prefer in-person advice on your estate planning, we have collaborated with a few local estate planning experts.   Feel free to reach out if you would like a soft introduction or simply want to hear more about their offerings.

Ideal client – for families with more complex Estate Planning needs and want the accessibility of a lawyer throughout the planning process.

For those clients preferring a digital experience, we partner with a remote Estate Planning service provider called ClearEstate. ClearEstate provides a variety of estate planning services in partnership with our team, from simple Will and Powers of Attorney creation to corporate executor services and estate settlement. ClearEstate provides a digital vault hosting your Estate Planning documents, as well as showing updated estate values and easy-to-interpret estate breakdowns.

Ideal client – someone who wants a completely digital experience but also wants ongoing review of their estate planning affairs.   This offering is better aligned for complex situations like establishing Family Trusts, Corporate Re-orgs and blended family situations.    

Mortality is that topic of conversation that is usually met with hesitation.  However, addressing it through estate planning can bring peace of mind.  It’s about securing your legacy and protecting those you care about!  Don’t leave it until it’s too late!!

Client Portal

As a reminder, you can view your investment accounts online via our client portal.  If you do not have access to your personal client portal or if you need to reset your password, please contact a member of our team.  The client portal allows you to obtain current market values, view transactions in your account, as well as access documents such as portfolio statements and tax slips.  If you would like information relating to the performance of your portfolio, a member of our team would be happy to help you.