April 30, 2020
I hope this letter finds you and your family well.
We at Belmont want to thank you for your patience through this period. Not only are we working from home but there are so many people that we count on who are working from home too and trying hard to carry on like business as usual. Requests and tasks are taking longer right now because of this sudden and now prolonged change. We would also like to thank you for continuing to do what is necessary to slow or stop the spread of Covid-19. These efforts are working and will help to get us, our providers and our world back to normal as soon as possible.
We have noticed a change in tone from the portfolio managers and economists that we listen to. This week they are changing their focus to how we will get back to business as a nation. Cautious optimism is the rule of the day but we believe we are starting to see light at the end of the tunnel for the easing of restrictions.
As part of our commitment to keeping you informed in the current environment, below is a recap of what took place in the markets last week.
What were the key developments this week?
Canadian and U.S. equity markets continued to fluctuate as investors weighed the possibilities of slowly easing lockdown restrictions and a quick economic recovery against the fallout of plummeting oil prices.
- On April 20, U.S oil prices fell below zero for the first time in history, ending the day at -$37.63. With so much of the economy paused, the absence of demand has left a lack of storage facilities for soon-to-be-delivered oil. There is just no place to put it all! As expected, last week’s OPEC production cut was not enough to rectify this.
- Canada’s annual inflation rate fell to a near five-year low in March as gasoline prices plunged.
- The U.S. announced weekly jobless claims of 4.427 million, bringing total job losses to over 26 million in the last five weeks, wiping out all gains since the Great Recession.
- The U.S. House of Representatives approved a $484 billion coronavirus relief bill to fund small businesses and hospitals; this brought the country’s total crisis response funds to almost $3 trillion.
- The number of confirmed COVID-19 cases worldwide surpassed 2.6 million. Europe continued to slowly loosen restrictions in certain regions, as did some southern U.S. states.
Should any of this change my views on my investments?
The market’s recent turbulence has been difficult emotionally for many investors. Going forward, we will continue to see news that may be positive for the economy or negative, but it is important to see these stories as factors that are constantly changing, rather than as indicators to overhaul your portfolio. Your portfolio managers are working hard to protect your money and make sure that you benefit from the market recovery. To emphasize the benefits of staying invested in both good times and bad, we thought we would share the chart below. Regardless of what the market does in the days, weeks, months and years ahead, history has shown that staying the course has reaped benefits over the long run. Our advice is to continue to do so as developments like this week’s drop in oil prices play out.
We are always happy to discuss your investment plans. Please do not hesitate to contact us at (888) 235-6169 for NS or (800) 565-7050 for NB.
Lastly, please take care of yourselves. Take care of your families. We often don’t think about how change affects us and how stress can add up over time. If you can, please take a bit of time everyday to relax and decompress. Your mental health will thank you for it.
We are all in this together!
Group Retirement and Individual Savings Department
Belmont Health & Wealth
Sources: CI Investments Inc., Johns Hopkins University (JHU), Thomson Reuters Corporation, oilprice.com, cnbc.com, bbc.com and The Wall Street Journal
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