May 2022

Spring greetings from Joe and Stu!

To start off with an important announcement, Joe and Karalee had an early arrival this spring: Kal Thor Quach – born 8:52pm on Apr. 3, 2022, 4lbs 1oz, 18 inches.

Congratulations Joe and Karalee!

We are actively adding insurance contracts right now to facilitate the transfer of any insurance that was provided by Pat. Please expect to hear from us in the weeks to follow, to facilitate this transfer.  If you had purchased any insurance with Pat and haven’t heard from us, please let us know so we can update the agent of record for you and continue to look after your Life, Disability and Critical Illness insurance needs.

This week Optimize has sent out their Spring 2022 Quarterly Portfolio Commentary, you can download it here if you missed it: Optimize Spring 2022 Quarterly Portfolio Commentary.

Chat soon!  Sincerely,

Joe & Stu

From the Desk of Optimize Wealth Management – Outlook Ahead

While the start of 2022 has been a turbulent one for the markets, as we look forward, we view the current environment as largely supportive for equity markets. Despite the backdrop of slower economic growth and the ongoing geopolitical tensions in Europe, the Canadian and U.S. markets are well supported and expected to continue to perform well.

As the year progresses, we expect that the supply-side constraints that have helped to drive inflation, largely created by the pandemic, will continue to temper. However, this is likely to be offset by the effects of the conflict in Europe, should it persist, as Ukraine and Russia contribute to the production of various commodities, particularly food and energy. As well, the recent Covid lockdowns in China are expected to create further headwinds. In its meeting in May, Chair Powell was explicit in suggesting that the Fed will continue to tackle inflation and additional 50 bps rate hikes remain on the table. As such, we can expect interest rates to rise in the coming months.

For now, we continue to capitalize on opportunities as they present themselves during market pullbacks, focusing on adding quality companies with lower valuations to our portfolios — opportunities that were largely difficult to find throughout 2021. As we have suggested in the past, this is a time in which thoughtful portfolio oversight, evaluation and scrutiny continue to benefit investors. Most important, we continue to advocate that — during these volatile times — individual investors remember that successful investing involves maintaining the fortitude to stick to your plan, continuing to be invested and staying the course.

Optimize Wealth Management (Optimize Inc.) represents to the reader that this Mandate or Model Portfolio is not a Mutual Fund or an Investment Product but rather a portfolio strategy. The forward-looking statements and forward-looking information are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements and information. Therefore, actual future results and trends may differ materially from what is forecasted in the forward-looking statements due to a variety of factors. Past performance or hypothetical performance.

From the Desk of First National – Residential Market Commentary

With the Canadian economy showing strong signs of recovery the way is clear for another half-a-percentage point increase in the Bank of Canada rate.

Statistics Canada figures for February show that gross domestic product (GDP) grew by another 1.1%, with just about all sectors of the economy showing improvement.

Preliminary data for March indicate a further 0.5% increase.  First quarter GDP growth is expected to hit 5.6%, which is nearly double the official forecast.

This rapid rebound from the Omicron variant of COVID-19 now has the Bank of Canada warning that the economy is overheating and more interest rate increases will be needed to cool it down and slow the pace of inflation.  That has cemented expectations for, at least, a 50 basis point increase in the Bank’s Policy Rate at the next setting on June 1st.  There is also the possibility of a 75 basis point hike.

In testimony before the Senate Banking Committee last week Bank of Canada Governor, Tiff Macklem, warned that the central bank may have to push its Policy Rate beyond the neutral range.

“It’s possible that we may have to go above the neutral rate for a period of time to return inflation to target, but it’s a bit above 2% or 3%, it’s not 7% or 8%,” he said.

“It’s going to be delicate. “But we do need to raise interest rates to moderate that spending growth and get inflation back to target,” Macklem said.—interest-rates-and-a-hot-economy