The leaves are finally starting to turn after a surprisingly long summer. Likewise, stock markets have continued to shine through the quarter, but with some decent fluctuations along the way. In early August, the US stock market dropped almost 10% before rebounding, and again in September it dropped almost 5% before recovering to new highs at the end of the quarter.
I could describe these fluctuations in the well-worn platitudes of mass market commentators: Markets are afraid the economy is slowing, investors are concerned that some stocks are overvalued, a foreign central bank unexpectedly increased its interest rate, etc. These clichés could have been front page headlines at some point in almost any given year. Blame my 20-year career (to date) of reading headlines like this over and over for my cavalier attitude.
You know that we can’t predict the future, all we can tell you is what has happened. However, it is our job to make sure that you are prepared for whatever might happen and to apply the lessons of history to that end. We take that job very seriously. After a strong run like we’ve recently had, it’s important to make sure that you have enough stashed away in bonds to cover the next 5 years’ worth of withdrawals you might make from your portfolio, if not more. If you’re at all concerned that might not be the case, or if new or unanticipated expenses have arisen, please do get in touch to review your asset mix.
How good a run has it been this year? Here are the numbers for the major markets for the third quarter and year to date:
Market | Q3, 2024 | 2024 Year to date |
Canadian Short-Term Bonds | 3.4% | 5.0% |
Canadian Bond Universe | 4.7% | 4.3% |
Global Real Estate Investment Trusts | 14.6% | 15.7% |
Canadian Stocks | 10.5% | 17.2% |
US Stocks | 4.9% | 23.6% |
International Developed Stocks | 5.9% | 15.8% |
Emerging Market Stocks | 7.5% | 20.1% |
As you can see in the numbers above, all of the asset classes in your portfolio have been performing very well so far this year. Portfolio returns, net of fees, run from 9% for the most conservative portfolios to as high as 17% for the most aggressive portfolios year to date.
There is plenty going on in the world to cause concern, but if we plan properly, we can ensure that you will have what you need when you need it to ride through whatever might happen going forward. As always, we appreciate your trust and will continue to focus on what we can control instead of letting ourselves get distracted by the noise.
Source: PWL Market Statistics