Joe Quach – Castle Wealth Services

2023 is well underway and we wanted to reach out to wish a Happy Family Day to you and your loved ones. No matter your plans for the long weekend, we hope you are able to enjoy some quality time with family and friends.

We have had a great start to the year so far, some reminders for the weeks ahead;

March 1, 2023 is the deadline for contributing to an RRSP for the 2022 tax year.
Tax season is around the corner and your tax slips should be available for you in your account portal. I’d be happy to help if you are having trouble getting them.

Regarding the market, please see the link below for Optimizes full report. If you have any questions please don’t hesitate to ask.

Sincerely,

Joe and Stu

From the Desk of Optimize Wealth Management – The Optimize Perspective

Overall, 2022 was a year of high volatility, with inflation data, interest rates, geopolitical uncertainty, and continuing
headwinds from the pandemic taking the focus. But over the last year, the U.S. Fed-funds rate has climbed from
0.25% to 4.5%. The spike in commodity prices we saw due to geopolitical tensions have mostly normalized and
inflation is beginning to moderate downwards.

Despite volatility, the Optimize Portfolios performed strongly with respect to both equity and income-focused
mandates. We saw value-based companies significantly outperform growth in 2022, and we expect this trend to
continue for at least the short term, with opportunities for growth and more cyclical sectors emerging. Something
we are also monitoring is the movement of the U.S. Dollar; as was observed in Q4, this will have an impact on equity
performance of U.S. multinationals that may play into how earnings are perceived and reported.

On the yield-focused side of the ledger, 2022 provided ample opportunity for tactical decision making. In reducing
exposure to investment grade debt, as well as other rate-sensitive investments such as real estate, we were able to
add significant value by reducing downside risks in a material way. We expect to see some continued challenges in
the real estate space, but strategy selection will be the key driver of success. Projects able to better account for, and
pass on higher interest rates will be able to shine, where the same factor will play to the detriment of competitive
projects. We also expect to see tactical buying opportunities in the investment grade debt space, although we
believe broadly that equity continues to carry better risk adjusted returns based on current valuation.

We have seen evidence of wage growth deceleration, while maintaining robust employment figures, suggesting
the Fed may successfully engineer a soft landing, potentially avoiding recession. With China’s economy gradually
beginning to reopen, supply chain issues will continue to abate, which should further fuel deflationary pressures. All
this to say, we are optimistic for the year ahead and very much looking forward to the opportunity these markets
are presenting us.

Full Report from Optimize Wealth Management:

https://castlewealthservices.com/wp-content/uploads/Market-Commentary-February-2023.pdf

This report is provided by Optimize Wealth Management. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. Optimize Wealth Management and its affiliates and related entities are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.

With fall well underway and the holiday season quickly approaching we thought it would be a good time for another newsletter. Market wise, please see the link below for Optimizes full report, and as always if there are any questions please don’t hesitate to get in touch. On a personal note, Kal is now 6 months old and almost crawling! No sleep is being had, but I am told that will change at some point….hopefully.

Additionally, we now have an exciting new product to offer, the Manulife Bank: Advantage Account. The Advantage Account is just that, a bank account with advantages! Now, who doesn’t want that? Below we have listed a few of the benefits this account offers.
Benefits:

Combines the advantages of a chequing and high interest savings account
Fully liquid – no penalty for withdrawal.
No monthly fee
With a $1,000 + balance everyday banking transactions are free.
Access your money from 1000’s of ATMs across Canada (Canada Exchange Network), through online banking and the Manulife Bank App

If you are interested in learning more just send us a message and we can go into further detail.

We hope everyone is having a wonderful October!

Full Report from Optimize Wealth Management:
https://castlewealthservices.com/wp-content/uploads/Market-Commentary-October-2022.pdf

Sincerely,
Joe and Stu

From the Desk of Optimize Wealth Management – Outlook Ahead

The inflation story is far from over — as are the monetary policy practices of the central banks — and we are likely to
see elevated inflation that exceeds central bank targets over the near term. With slower economic growth, investors
should also expect downward earnings revisions, as analysts cut price targets to discount the effect of higher prices
and higher interest rates throughout the economy. However, should inflation moderate by the middle of 2023, the
central banks will have enough room to lower rates if need be.

Despite slower growth, if the labour markets can continue to remain robust and cushion the effects of higher
interest rates, we remain optimistic that a full-blown recession can be averted in Canada. Certainly, the prospects
for a softer landing appear much greater for Canada, compared to other nations such as those in Europe, which
continue to struggle with skyrocketing inflation, high unemployment and an energy crisis that is only expected
to get worse as the winter months arrive. Canada has the enviable position of being a net exporter of food
and energy, as well as having comparatively strong public finances, which continue to provide a solid economic
buffer. These and other factors lead us to believe that Canadian equities will continue to outperform their global
counterparts well into 2023. We expect that the U.S. will outperform developed Europe and Asia, two regions that
face ongoing and significant geopolitical challenges.

With the continuing uncertainty, investors should also expect continued volatility. However, while market declines are
never easy to endure, they are a normal part of the investing cycle. And, investors may be wise to remember that
they are most often followed by periods of strong returns. In looking at market corrections of 10% or more on the
S&P 500 Index since 1980, the average one-year return from the low of the correction is 23% and the average two-
year return Is 37.5%. Periods of retrenchment have always been followed by new growth, economic expansion and
improved equity values. There is little reason to expect otherwise in this cycle.

Full Report from Optimize Wealth Management:
https://castlewealthservices.com/wp-content/uploads/Market-Commentary-October-2022.pdf