Dear Valued Client,
This will be the worst December since 1931. Last week was the worst week for the S&P 500 since October 2008. The roughly 18% loss for this last quarter ranks among the worst seven quarters since 1940. This extremely sharp downturn has been baffling.
While a correction was expected due to an economic slowdown, the relentless selling this month is reminiscent of 2008, when there was a known financial crisis. In our view, it is quite unlikely that there is another crisis brewing. A normal slowdown in the business and economic cycle which may or may not lead to a recession is what is most likely to happen.
We feel the market is getting way ahead of itself and probably reacting too negatively. As such, we remain positioned for a correction within a long term secular bull market. The sharp drop has damaged our portfolios somewhat, but as in previous corrections, we look to dividend and interest income to mitigate losses while we wait for the market to bottom out.
The table below, showing the subsequent performance of the S&P 500 after previous terrible quarters, helps us keep calm in midst of this turmoil.
Source: Ben Carlson, CFA at Ritholtz Wealth Management LLC
As always, if you have any questions or wish to discuss whether any of the mentioned investments are suitable for you, please do not hesitate to call us at 604-658-3043 or email.
Best Regards,
Ron Aloni / Alan Goh / Jason Chen
This commentary is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter and is provided for your information only. Every effort has been made to ensure the accuracy of its contents. The views contained herein do not necessarily constitute the views of Leede Jones Gable Inc. Leede Jones Gable Inc. is licensed as an investment dealer in every Canadian Province and Territory and is a member of the IIROC and the Canadian Investor Protection Fund.
