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.
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:
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.