Download the TriDelta All in One Place Guide

Articles

/ US Investments

A proven path to higher and stable returns

0 Comments
December 11, 2018

The global equity markets have been very volatile and have understandably rattled investors confidence. The ‘winds of change’ to one of the longest bull markets have arrived and our portfolio safety metrics are being tested.

At TriDelta we set out to construct conservative portfolios designed to deliver in all market cycles for financial peace of mind.

Investors understandably remain nervous as year end approaches and we expect more volatility as concerns over the China trade deal, elevated market valuations and Brexit uncertainty. Other concerns include the inverted yield curve and rising interest rates that may stall any ‘Santa Claus’ rally this year.

At TriDelta Financial we come well prepared and deliver highly diversified portfolios that typically include a significant allocation to Alternative Investments that include global real estate and private debt.

Alternative investments are essentially any asset that is not a public stock, bond or cash security. Alternative investments often provide higher returns than traditional assets by focusing on less efficient or private asset classes, such as infrastructure and private equity.

They can generate stable, high levels of income by investing in private income oriented investments, such as real estate and private debt. Hedge Funds, such as Market Neutral Hedge Funds can also reduce volatility by using sophisticated hedging strategies.

We have long held the view that traditional equity and bond investment portfolios simply do not deliver consistent wealth accumulation. Portfolios require more diversification to ensure uncorrelated, multi-factor protection against downside risk. We manage our clients wealth in the same way pension funds do by strategically building portfolios that include a number of investment types and strategies.

We use stocks, bonds and preferred shares, but also include Alternative Investments such as global real estate, private debt solutions and hedge funds. Alternative investments compliment and add real value to portfolios by:

  • Provide high income
  • Diversification to reduce risk
  • Lowers portfolio volatility
  • Enhances returns
  • Protects capital during market weakness

The major pension portfolios are constructed in a very similar way. Here is an Extract from the CPP Investment Board 2018 Annual Report on how they diversify and reduce portfolio risk:

Diversifying sources of return and risk – the Strategic Portfolio

As noted, we manage the Investment Portfolio to closely match its total absolute risk with that of the Reference Portfolio. But that does not mean that we simply hold 85% of the Fund in equities, or even in equity-like exposures. This would be imprudent, as the portfolio’s downside risk would be almost completely dominated by a single risk factor – that of the global public equity markets.

We can, however, build a portfolio with a superior return profile for a similar amount of risk by blending a variety of investments and strategies that fit CPPIB’s comparative advantages. Each of these strategies offers an attractive return-risk tradeoff of its own, and their addition clearly reduces the dependence on public equity markets.

First, we can invest in a higher proportion of bonds and add two major asset classes with stable and growing income: core real estate and infrastructure. By themselves, these lower the risk of the overall portfolio. This risk saving then allows us to add a wide variety of higher return-risk strategies, such as:

  • Replacing publicly traded companies with privately held ones;
  • Substituting some government bonds with higher-yielding credits in public and private debt;
  • Judiciously using leverage in our real estate and infrastructure investments, along with increased investment in development projects;
  • Increasing participation in selected emerging markets; and
  • Making significant use of “pure alpha” investment strategies, which rely on the skills and experience of our managers.

CPP Investment Board 2018 Annual Report

To help put the current market turmoil into perspective, here are a few opinions from the large US investment firms:

JPMorgan Chase see the pessimism in equity and high-yield bond markets as overdone, as it sees only a 20% to 30% chance of a recession in 2019, with an increased probability in 2020.

The bank’s strategists, led by John Normand, analyzed equity valuations and credit spreads for high-yield bonds in the period leading up to past economic recessions.

The team continues to favor stocks over corporate bonds in developed markets and takes a neutral view on emerging markets.

“It is right to anchor portfolio strategy in a late-cycle framework that anticipates below-average returns into and through the next recession, but we note it is also excessively pessimistic to price so much downside now as equity and HG credit markets are doing,” the analysts wrote.

Goldman Sachs generally believes the bull market will continue in 2019, but it could get choppier as the year continues and investors begin to worry about a recession in 2020.

Here are some of the investment bank’s predictions for next year:
The S&P 500 will rise 5 percent to 3,000 by year-end 2019 (after closing 2018 at 2,850).
Investors should raise cash.
Investors should be defensive.
The market could be in for big trouble from tariffs.

Bank of America ML believes that “the long bull market cycle of excess stock and bond returns is expected to finally wind down next year, but not before one last hurrah.

Their Research team forecasts 2019 to deliver:
Modest gains in equities.
A weaker US dollar.
Emerging markets are cheap and under owned, they could be a big winner in 2019.
Higher levels of volatility.
A notable slowing in global earnings growth.

Morgan Stanley believes US stocks will underperform and Emerging Market stocks will outperform.

They see a number of macro changes as a result of slowing global growth in US and developed markets, rising rates, higher inflation and tighter policy. They believe these shifts will result in reversals of some key market sectors as follows:
US dollar strength will weaken once the Federal Reserve pauses on rate hikes.
US stocks outperformance will change to underperform.
US and European rates will converge.
Emerging markets have underperformed, but will retake the lead and outperform once China easing starts working.
Value portfolios will start outperforming growth.
Emerging market sovereigns will start outperforming US high yield bonds.

The TriDelta Approach:

TriDelta’s Alternative Assets Investment Committee focuses on putting the odds in our clients’ favour by focusing on:

  • Proven managers with strong track records and disciplined investment philosophies
  • Earning more stable returns
  • Generating premium yield in less liquid investments
  • Solutions that lower clients’ portfolio volatility

It is often difficult for investors to access these investments for three reasons:

  1. Alternative Investments are often restricted only to Accredited Investors (those with family income of $300,000+ or an investment portfolio of $1 million+)
  2. Many large Canadian financial firms simply do not make them available to their clients because alternative investments are often more complex and require a specialized skill set to analyze, review and select managers; and
  3. Many of the best alternative managers provide only restricted or limited access to their funds.

At TriDelta Investment Counsel, we solve all of these problems.

As an investment counsellor, we are able to offer these investments to all clients on a discretionary account basis. Alternative investments are a key element of our overall investment strategy.

Anton Tucker
Written By:
Anton Tucker, CFP, FMA, CIM, FCSI
Executive VP and Portfolio Manager
anton@tridelta.ca
(905) 330-7448

Lorne Zeiler on BNN’s The Street – March 21, 2018

0 Comments
April 2, 2018

Lorne Zeiler, VP, Portfolio Manager and Wealth Advisor, TriDelta Investment Counsel, was the guest co-host on BNN’s The Street on Wednesday, March 21st discussing the following:

Income Investing Strategies in the Current Environment

Given the expectations of rising interest rates and renewed market volatility a traditional bond or dividend focused portfolio may be incapable of generating sufficient income at low volatility needed by investors. Lorne Zeiler, Portfolio Manager, discusses how to design a stable, income producing portfolio in this environment on BNN’s the Street.
Click here to view

Keeping Calm and Profiting from Volatile Markets

When markets drop significantly in short periods investors often let emotions take over and make bad investment decisions. Lorne Zeiler, Portfolio Manager, discusses how to take emotions out of investing by designing a stable, diversified portfolio, including alternative assets, on BNN’s the Street.
Click here to view

Lorne Zeiler
Written By:
Lorne Zeiler, MBA, CFA
VP, Wealth Advisor
lorne@tridelta.ca
416-733-3292 x225

Lorne Zeiler on BNN’s Market Call, February 7, 2018

0 Comments
February 9, 2018

Lorne Zeiler, VP, Portfolio Manager and Wealth Advisor, TriDelta Financial, was the guest on Market Call last night (February 7, 2018).

Below is a link to Lorne’s top picks, market commentary and past picks

Click here to view

Lorne Zeiler
Written By:
Lorne Zeiler, MBA, CFA
VP, Wealth Advisor
lorne@tridelta.ca
416-733-3292 x225

2015 Financial Forecast & Review of Solid 2014 Predictions

0 Comments
January 6, 2015 , , , , ,
TriDelta Financial forecasts good but weaker returns in 2015 than 2014
 
Accountability – someone recently told me that this word seemed to be disappearing in society. It made me think how predictions are easy to make, especially if there was no accountability for how they did.
 
At TriDelta Financial – we believe in being accountable to our clients. We are even accountable for our predictions – which will not always be correct.
 
Here is what we said last year:
https://www.tridelta.ca/tag/2014-forecast/
 

  • US Equities over Canadian Equities – both for Total Return and also because of Currency.
  • We preferred Industrials and Technology and mentioned 3 stocks that we liked for 2014:
    • CISCO – Total return in Canadian dollars for 2014 is 41.7%
    • Goodyear Tire – Total return in Canadian dollars for 2014 is 32.0%
    • Magna – Total return in Canadian dollars for 2014 is 48.4%
  • Equities over Bonds – We were correct in not seeing interest rate increases in 2014 and that the Prime Rate would remain unchanged (this was different than most opinions of rising rates). However, we did not see the meaningful declines in long term yields that took place during the year, and it turned out that Bond returns (while not as strong as stocks), were better in 2014 than we thought.
  • Canadian dollar would continue to decline. We correctly predicted that the Canadian dollar would fall from 94 cents, but thought it would end the year at 90 cents. It turned out that the decline would be greater than we predicted.

Overall, our 2014 Financial Forecast was mostly correct. In fact, these beliefs helped us to deliver a return of over 15% in 2014 on our one fund, the TriDelta High Income Balanced Fund.

 
Now for our 2015 Financial Forecast

TriDelta Financial 2015 Year End Predictions
TSX Total Return 5% A little lower than 2014
S&P 500 Total Return (in US$) 8% A little lower than 2014
DEX Canadian Bond Index Total Return 2.25% Lower than 2014
Canadian Bank Prime Rate 3.5% 50bps higher in 2nd half
10 Year Gov’t of Canada Bond Yield 2.25% to 2.50% Moderate increase
Crude Oil (WTI) $70.00 Decent increase
Canadian Dollar vs. US$ at year end $0.84 Small decline

US Equities over Canadian Equities – Again we expect the US equity market to outperform Canada. While we do not expect a repeat of the outsized U.S. returns that have occurred over the last two years, we do expect US equities to produce decent single digit returns (7-9%).  Last year we had thought that returns in the U.S. would be mainly based on earnings growth as earnings multiples seemed to be at a reasonable level. Analysts were expecting 10% growth in earnings and as it turns out earnings grew about 7% despite currency headwinds and continued global strife.   The multiple also expanded a bit to deliver the roughly 13% US$ return. The major concern in Canada revolves around oil. If oil decides to hang around the $50 – $60 level it looks like earnings estimates could come down and the expectation of 16% earnings growth that is currently in the market could easily fall.

Canadian Equities – As noted above we still expect positive returns for the TSX in 2015, but oil and the trickledown effect of its precipitous decline especially in western provinces is the big question mark.   Valuations for many of the dividend payers (especially the banks) continue to remain reasonable especially in a low interest rate environment and could have some multiple growth and earnings growth to pick up the slack from a poor energy market.. 

Sectors to Outperform –Two stocks with some cyclical US exposure we think will do well next year are 3M and Allegion as the US economy continues to gain traction. Health Care stocks could be another solid performer next year as the fears around Obama Care subside, mergers continue and demographics are favourable. Another name that we see both strong earnings growth and dividend growth in 2015 would be Apple.

Oil  – It would be great to say that we see a big rebound this year but we think we are going to stay at reasonably depressed levels for some time. The question is whether approximately $50 oil is a new price driven by supply and demand, or the result of more complicated components of the market. While we don’t see a bounce back to $100 oil, we still believe that the pendulum has swung too hard in one direction, and we will see some bounce back from here. However, the bounce back won’t be as large as many predict. Hopefully we have seen the worst for oil and we will be able to capitalize on a couple of tradable rallies but we don’t think we will have many major long term holdings in the sector this year. We will also be looking at related industries such as Western Canada real estate and some potential impact to bank earnings.

Currency – USD/CAD  – Despite all the positive momentum in the US we think the majority of the move off the bottom has now occurred and we are mostly due for a pause. The U.S. dollar bottomed in late 2011 and has gained 23% adding significant gains to our U.S. equity holdings. The range we are looking at is $0.80 to $0.90. The expectation for further gains in the US dollar will continue as the longer term trend for the US is positive, the improving economy has helped bolster the U.S. government balance sheet and net export numbers continue to improve providing less of a headwind.  This currency trend will put additional pressure on Canadian investments vs. US investments – but we believe this pressure will be pretty small at this stage.

Interest Rates  – Similar to our views in 2014, we do not believe there will be significant moves higher on either the short or long end of the curve, but we do see some small increases later in the year. Global economic growth continues to have its challenges, deflationary concerns abound. Developed nations’ interest rates will remain near historical lows.

Bonds  – Do higher interest rates mean poor bond returns? The reality is that it depends on how you manage bonds. The first issue relates to higher interest rates. How much higher? We believe this will be limited to small increases. With the yield curve, do we focus on the short end (1 year or overnight) or the long end (10 years plus)? Much of the ‘flattening’ has already happened with sizable declines in long term rates in 2014. We see small changes at both ends. What about Government bonds vs. Corporates vs. High Yield? These decisions will shift throughout the year.

At TriDelta, we believe in an active bond strategy in order to take advantage of the shifts within the bond market, as much as the general trend. For 2015, this would likely mean taking advantage of some late 2014 trends. High yield bonds had a weak end of the year with worries in a few corporate sectors. We have taken some gains on Government Bonds of late, and will be looking at some Corporate and High Yield names that will benefit from a robust domestic economy. As for moving to the long end or short end, we have leaned longer and benefited by this for most of 2014. With the 10 year Canadian yield currently at 1.82%, we are taking a small pause as we feel there may be a better entry point for long bonds than we are at today.

Global markets – At TriDelta our focus is firmly on North American markets (US & Canada) and this for good reason as it is where the best risk adjusted returns have been in recent years. We do however monitor global markets and relative opportunity, and it is likely that our portfolios will reflect more of a global flavour as and when opportunities arise.

Global capital markets remain largely unattractive relative to the US & Canada. Most strategists cite the poor global GDP growth, which appears to have been priced into equity markets to a significant degree and this is a pre-requisite for future opportunities, particularly if, as and when growth & stability returns. For now we believe better risk adjusted opportunities exist in North American markets.

The Eurozone for example is fraught with uncertainty as they struggle with a multitude of issues such as high unemployment, Greece potentially exiting the euro and the more recent Russian risks and fallout. As a result these markets trade at a discount and may be headed even lower in the near term.

The emerging markets also remain an area of concern although we did invest a small amount due to its relative valuation in 2014. We do see opportunities particularly in markets that are commodity importers or energy importers.

Alternative Investments  –  Our view is that new investment asset classes are always worth reviewing. If we find something that we are comfortable with, we will incorporate it into our overall recommendations. If regulatory changes come about in Ontario in 2015, we will be able to offer some of these solutions to non-accredited investors as well. These strategies can include real estate, mortgages, business lending, factoring, and many others that emerge over time. With professional due diligence, there is an ability to find alternative income strategies that fit an investor’s goals, and that are not closely correlated to other investment markets.

We expect 2015 to be a positive year overall for clients, but with lower returns than most clients enjoyed in 2014. While these are predictions for the year, as information changes we will adjust our approach to take advantage on behalf of our clients. The key is to provide an investment portfolio that is open to all investment options available – and not limited to a small subsection of opportunities. In tandem, we need to be consistent with each client’s profile, what their goals are, and what their risks are. This investment discipline will serve clients well in sunny and stormy conditions. We are quite certain that 2015 will see some of both!

This report was written by the TriDelta Investment Counsel – Investment Management Committee.

TriDelta Investment Management Committee

Cameron Winser

VP, Equities

Edward Jong

VP, Fixed Income

Ted Rechtshaffen

President and CEO

Anton Tucker

Executive VP

Lorne Zeiler

VP, Wealth Advisor

For more information – please contact Ted Rechtshaffen, President and CEO, TriDelta Financial at 416-733-3292 x221 or tedr@tridelta.ca

When to Invest in the Market?

0 Comments
November 11, 2014 , , , , ,

One of the most frequent questions posed by clients concerns whether now is a good time to invest in the equity markets.   As the last two months reminded us, even during a bull market, pull backs are quite common.  In fact, on average, the stock market experiences a 10% or greater decline almost once per year and smaller declines of 5% or more 2-3 times per year.  No one wants to put new money into their portfolio only to see it go down in the short-term, but generally the bigger risk is having money sit on the sidelines uninvested.  While equity markets can experience large declines (2008-2009 is the most recent example), historically, they have earned over 9% per annum, while cash has only earned roughly 3.5% [1].

14498871_sTherefore, when we are asked the question whether now is a good time to be invested in equities, we typically respond YES it is (although the percentage allocation will vary by each client and their circumstances).   A recent report from Charles Schwab’s Center for Financial Research titled “Does Market Timing Work” confirms this view. [2]  The author, Mark Riepe, examined the returns for five different types of investors (listed below) who each received $2,000 at the beginning of every year over a 20 year period ending in 2012.  The individuals were:

Peter Perfect, who had great market timing ability and managed to invest the $2,000 each year at the S&P500’s lowest monthly closing value.

Ashley Action, who invested her full $2,000 each year at the earliest possible moment.

Matthew Monthly, who divided the $2,000 into equal monthly allotments.

Rosie Rotten, who had the opposite luck of Peter Perfect; she invested her funds each year at the monthly market peak value.

Larry Linger, who could not determine when to invest in the market, so he chose to keep his funds in cash (using Treasury bills as a proxy) every year.

Fast forward to the end of the 20 year period and the results may be somewhat surprising.  While equity markets were substantially higher at the end of 2012 from 1992, this period did include two bear markets (2000-2002 and 2008-2009) and many corrections of 10% or more.  Even Rosie Rotten who had horrible market timing, investing at each year’s monthly peak, still managed to earn a strong return.

Peter Perfect had the highest closing value, turning his $40,000 of investments ($2,000/yr. over 20 years) to $87,004.  Ashley Action earned the next most at $81,650.  Matthew Monthly fared well with $79,510.  Even Rosie Rotten still ended up with $72,487, a gain of over 80% on her capital.  The only real loser was Larry Linger who saw his $40,000 only grow to $51,291.

The more important point of the article is that these results were consistent across nearly all time periods analyzed.   The author analyzed 68 rolling 20 year periods beginning in 1926 (prior to the Great Depression) and in over 85% (58 out of 68) of those periods, the results were the exact same (Peter performed best, followed by Ashley, Matthew, Rosie and Larry was last). 

Of the 10 periods that did not follow this normal pattern,  Ashley Action never finished in the bottom. Instead she still finished second 4 times, 3rd 5 times and 4th once.  In fact, Ashley Action who invested her funds immediately, had the second best return of the pack 91% of the time and was third or better in 98.5% of all rolling 20 year periods.  Larry Linger, by contrast only finished in first or second twice, in the periods 1955–1974 and  1962-1981.  He earned the lowest return in 91% of all time frames.

Equities have historically provided the highest returns among traditional asset classes, but with significantly more volatility.  While, investment advisors and counsellors can never guarantee results, nor can they always determine the best time to invest in the market, but at TriDelta Investment Counsel, we suggest that all long-term investors have an allocation to equities in their portfolios.  As the report suggests, we prefer the odds of Ashley Action and Matthew Monthly achieving their financial and retirement goals much better than those of Larry Linger.


[1] http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html.  Returns on S&P500 from 1928-2013 had a geometric average return of 9.55%.  3-month T-bill average return was 3.55%

[2] For a copy of the report by Schwab Center for Financial Research, please go to: http://perspective.schwab.com/mobile/article/7510/Does-Market-Timing-Work.

 

Lorne Zeiler
Written By:
Lorne Zeiler, MBA, CFA
VP, Wealth Advisor
lorne@tridelta.ca
416-733-3292 x225

TriDelta Investment Counsel 2014 Forecast

0 Comments
December 23, 2013 , , , , ,

As 2013 comes to a close, we thought that it would be a good time to share our expectations for 2014 and discuss our views on the current year.  In 2013, we expected US equities to outperform Canadian equities.  Our fairly large exposure to US equities (vs. many other Canadian Investment Counsel and brokerage firms) benefitted clients.  In the Canadian market, dividend paying, low volatility stocks, such as utilities, banks, insurance companies and telecommunications significantly outperformed natural resources.  Industrials, such as Magna International and Air Canada also performed extremely well.  On fixed income, while the Canadian Bond Index (DEX Universe) had a slightly negative return, our focus on corporate bonds has enabled our clients to earn slightly positive returns during the year.

As we approach 2014, we are hopeful that the US clarity on bond tapering will give the market confidence, that Europe will finally experience GDP growth, that Abenomics will provide a further economic boost in Japan, that Canada will continue to expand and be known for innovation and growth instead of just for Rob Ford, and that we at TriDelta will continue to provide strong returns for our clients to meet their investment and financial goals.

 

2014 Predictions:

TriDelta Financial 2014 Predictions
TSX Total Return 6%
S&P 500 Total Return (in US$) 8%
DEX Canadian Bond Index Total Return 1.75%
Canadian Bank Prime Rate 3% Remain Unchanged
10 Year Gov’t of Canada Bond Yield 2.50% to 3.00% Little meaningful rate increase
Canadian Dollar vs. US$ at year end 90 cents

US Equities over Canadian Equities – While we do not expect a repeat of last year, we do expect US equities to produce medium to high single digit returns (6-9%).  Historically, the US equity market has experienced positive returns following a strong performing year like 2013.  The difference is that while 2013’s equity returns were based mainly on valuations, with Price-Earnings multiples expanding and roughly 6% earnings growth, 2014 will be mostly earnings growth as companies try to meet or beat the lofty 10% growth expectations.   We expect that the US economy should grow at a faster pace than in 2013.  We also anticipate that with 2014 being an election year, there will be little in the way of significant debt reduction agreements, removing a further concern against equity markets going higher.

Due to the extent of the recent increase, we think there could be a pullback in the near-term hence our holding of the S&P500 Inverse ETF.

Canadian Equities – We expect positive returns for the TSX in 2014 as well.  Valuations for many of the dividend payers remain quite reasonable, especially in a low interest rate environment.  We again expect the non-resource sectors, such as financials, telecommunications, transportation and industrials to outperform.  Having said this, we believe that the TSX will still likely underperform the US markets.

Sectors to Outperform – The last few years have been all about dividend paying stocks.  We think next year could see a number of cyclical companies outperform, such as Industrials hence our weighting in Goodyear Tire & Rubber US (GT) and Magna International (MG).  While the overall technology sector is trading at high multiples thanks to companies like Twitter, there are a number of bellwether technology companies, such as Cisco Systems (CSCO) that are trading at relatively low multiples, offering strong balance sheets, good dividends and cash flow.  2014 could also be the year when mining stocks finally hit bottom.  While we think there may be some excellent opportunities in the sector, we also believe that it is presently too early to invest.

World Economy to Expand Moderately – The IMF is predicting 3.6% growth for the world in 2014, a significant increase from their current forecast for 2013 of 2.9%.  Overall, a greater portion of this growth is expected to come from the developed countries.  Europe and Japan are both projected to grow by over 1% and North America by 2.5%.  Emerging markets are forecast to grow by 4.5%; China will account for a significant portion of that growth at 7.3%.

2014 will also mark the 100th anniversary of the beginning of World War I.  We need to sometimes remember that the first European Union, the European Coal and Steel Community (ECSC) in 1951 was not only founded to encourage economic growth, but as French Foreign Minister Robert Schuman stated, the ECSC was “to make war not only unthinkable, but materially impossible”.  We believe that the European economy may have turned a corner recently and with equity valuations a little lower than in North America, this may be an area we add strategically to client portfolios.

Bonds – We favour equities over bonds in 2014.  Within fixed income (bonds) we favour corporates and high yield over governments.  We expect that the US Federal Reserve will begin to taper its quantitative easing bond buying process in the Spring of 2014 or earlier; however, any acceleration of timing would not be a shock to the market,  and the process will be very gradual.  To temper any fear and confusion that tapering is not tighter monetary policy, we do not expect interest rates to rise meaningfully in 2014.  As a result, we think that interest rates on the 10 year Canadian government bonds are range bound between 2.50% to 3.0%.

Corporate bonds will continue to offer favourable returns in a low interest rate and inflation environment.  Investment grade corporate bonds in the 10-year to maturity area are offering yield premiums of around 150 basis points (bps)  vs. comparable government bonds.  High yield bonds in the  universe are typically offering yield premiums of roughly 425 bps.  There is a need to be selective in terms of credit and allocation along the yield curve to provide the highest potential return vs. risk, but in general Canadian and US issuing companies are in strong financial positions with solid balance sheets.

Currency  – The US dollar ended 2012 at a slight discount to the Canadian dollar, but has appreciated by over 7% during 2013 into December.  We expect that the US dollar will continue to appreciate as the longer term trend is turning positive, the improving economy has helped bolster the U.S. government balance sheet and net export numbers continue to improve providing less of a headwind.  This currency trend will put additional pressure on Canadian investments vs. US investments.     

Alternative Investments  –  Over the past year, we have begun supplementing alternative investments to the portfolios of certain accredited investor clients, to gain access to asset classes that cannot easily be purchased on public markets, such as mortgages, real estate, infrastructure and private credit or strategies that can cost effectively use options and leverage.  Recently we launched our first pooled fund, TriDelta High Income Balanced Fund, which employs institutional investment strategies, such as options and leveraged fixed income.  We believe that our new fund and other alternative strategies can add to client returns, while reducing volatility.

While we expect 2014 to be a positive year overall for clients, we do expect volatility to increase from its low levels this year.   As such, we will continue to review economic indicators, trends and relative value to proactively take advantage of opportunities and reduce risk when deemed appropriate.

 

This report was written by the TriDelta Investment Counsel – Investment Management Committee.

Members include: Cameron Winser, VP, Equities; Edward Jong, VP, Fixed Income; Lorne Zeiler, VP, Wealth Advisor; Ted Rechtshaffen, President and Wealth Advisor; and Anton Tucker, EVP, Wealth Advisor.

For more information – please contact Ted Rechtshaffen, President and CEO, TriDelta Financial at 416-733-3292 x221 or tedr@tridelta.ca

↓