June 2022

Market Update

With the doom and gloom that controls media today, we figure it would be a good time to provide another market update with some proper context.  We’ve had a lot of good conversations over the last month despite the challenges currently in the markets.  In our opinion Optimize has been a strong performer despite what you see in headlines today.  Overall markets are down -14% to -24% year-to-date.  The Optimize balanced growth portfolio is down about -7% year-to-date and has a one-year return of +4%.  We are definitely down from the highs of last year’s gains, but the Premium Income fund within the portfolio (which we’ve often referred to as “Pension Style Investing”), has really provided strong stability within your portfolios.  Currently the Premium Income fund is only down a few % year to-date with growth year over year.  Access to this style of management is one of the primary reasons the move to Optimize was originally made, and we’re happy it’s turning out in all our favours.

If you have questions or concerns, please reach out, we’re happy to chat through the details about your accounts at what’s happening in the markets today.  We are definitely not out of the woods, and there remains a lot of uncertainty for 2022, but we’re in good hands to capitalize on the growth that lies ahead.

Full Report from Optimize Wealth Management:

Joe and Stu

From the Desk of Optimize Wealth Management – Looking Forward

In the world of the 24-hour news cycle, and if-it-bleeds-it-leads journalism, we are inundated with negative headlines at all hours of the day. Current sentiment is overwhelmingly negative, volatility is high and uncertainties remain. We have seen substantial declines in the major indices, particularly in recent days with investors weighing the prospects of a “hard” or “soft” landing. As mentioned earlier, we are likely to continue to see companies revise their earnings lower, as well as analysts cut price targets, as they discount the effect of higher prices and higher interest rates throughout the economy. The markets will likely continue to be volatile in the coming weeks as uncertainty remains elevated and as investors digest each piece of economic data. Again however, it’s also important to remember that market corrections (defined as a decline of 10% or more) are almost always followed by periods of strong returns, i.e. the average one-year return from the low of a correction on the S&P 500 since 1980 is 23%, and the average two-year return is 37.5%. Encouragingly, the labour market also remains robust and should naturally cushion the effects of higher interest rates and reduce the likelihood of a potential recession.

Regardless, we are extremely pleased with how the Portfolios have performed. The benefits of broad diversification and the inclusion of institutional “pension-style” asset classes has resulted in lower volatility, lower downside capture and ultimately higher-quality risk-adjusted returns. The current market dynamics will remain challenging for some time, but the secular rotation from growth to value, will continue to favor our existing allocations and overall long-term strategy. More specifically, the Portfolios emphasis on value, its current overweight to financials, increased exposure to Canada, as well as the combination of alternative asset classes should continue to provide a strong defense against current headwinds, but also ensure consistent and stable returns over time. Clients are well positioned, as we eventually exit this correction and although we will likely continue to see volatility in the short to medium term, clients should keep their long-term financial goals in mind as they are well established for success.

Full Report: https://castlewealthservices.com/wp-content/uploads/Market-Commentary-June-2022.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.