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By Jason A. DeJean, CFO, PFP, EPC, CPCA
VOLATIVITY
82
Remember, diversification is important.
Trying to take the blinders off and taking a fresh look is important.
What worked 20 years ago, 10 years ago, 5 years ago may not work today.
The GREAT news is that that there is moderate growth in economies all over the world so while we may be back to NORMALIZED volatility the world is growing which should result in growing earnings and by extension growing share prices.
Per: Globeadvisor
YTD
TOTAL 1-year return
Bank of Nova Scotia
-2.27%
2.72%
RBC
-1.84%
5.4%
BMO Equal weight US Banks
7.88%
18%
Pardon? I hear several people shouting, ‘what about the Canadian banks?’ ‘They are the best of the best!’
STRATEGIES FOR (ALMOST) EVERYONE TO REDUCE VOLATILITY AND MAINTAIN TARGET RETURNS
(please contact me to implement)
1. In this low interest rate world, I suggest (and for the last 2 years) exposure to TREZ Capital Short Term Commercial Mortgages. 20%+ exposure to this will REDUCE VOLATILITY but give returns 2 to 3 times that of GIC’s. (30-day liquidity)
2. HARD ASSETS (real estate) such as NATIONWIDE STORAGE. These are designed to generate 8% cash flow (tax efficiently) and participate in upside potential upon sale of asset. The newest project is near downtown Kamloops British Columbia. This investment also offers stability of price reducing the volatility of your portfolio.