Ready To Retire: Part 3

A reader writes:

Hi Scott, 

I read with interest your success story of the couple who turned a couple hundred thousand in savings and a $400,000 house into $2.7 million over 15 years.

I am re-evaluating my current advisor's approach and I am curious to know the actions taken to achieve such a high rate of growth.  

Can you tell me whether the growth in RRSPs and Non-Registered accounts was attributable to simply letting the money grow, or whether the increase is based on significant annual contributions by the couple (e.g. tens of thousands a year) over a 15 year period?  Or does the growth also include the commuted value of a pension that has transferred into assets?  Or does it include drawing down on a HELOC and investing the equity?

By my calculations, to get the almost 1.6 million in non-registered accounts, TFSAs, and RRSPs the couple would have to have invested roughly 35,000 every year over the 15 years on top of an initial 300,000k investment, with an average return of 7% after fees.  

Your story certainly provides some hope that responsible savings and investing can yield one's retirement dreams.  

  

Any insights on this couple's, and your, approach would be most appreciated.

Regards, 

My response:

An excellent question and yes you are correct, they were good savers and that is why it is a story that I love to tell: about the impact of planning ahead and sticking with it.

They are / were both working, so they were able to save approx. $25-50,000 per year, depending on the year (more in recent years).

And you know your present value / future value math, because their balanced and diversified (mostly ETF) portfolio did earn, after fees, a little under 7% annually over this time (including an approx. -15% in 2008).

They did their job (saving) and we did ours: drafting a reasonably prudent risk–adjusted return portfolio based on their goals. 

And re-balancing it regularly. This is so important, because assets that grow and out-perform need to be kept within the specified allocation per-cent by being trimmed back from time to time (a form of profit-taking, if you will). The cash from this gets re-distributed to the under-performing assets and over time as a cycle progresses, under-performers perform better and out-performers lag and the portfolio benefits from these adjustments. It is also important to be careful about when to put new cash to work. Our job is also to do that with prudence and not just at any price. We are always cautious about finding good value for putting new money to work.

Sitting in cash while over-priced markets run their course can be very rewarding.

Regular monitoring and re-aligning with a financial plan (we call it a wealth forecast) are also crucial: life is a dynamic situation and changes happen that need to be accounted for and if necessary a strategy needs to be re-worked.

So call it a good team effort: the “couple” in question stuck to their plan and we did our job. It thrills me when I can tout this success to emphasize the possibilities (truth be told it wasn’t always easy, there were some trying times back in 2008 when worry got the best of us, but we hung on and got through the rough patches).

I got into this business to help people and we get paid for doing that (not the other way around, i.e selling for commission), which is why I have a great deal of questions for the less ethical advisors.

My clients who have been with me (you can always refer to the testimonials on our website) for the long-term, know and understand that.

Not everybody is necessarily a good fit. I loathe gambling / trading / get-rich-quick types and do-it-yourselfers (who apparently always make money) and prefer the slow steady long-term approach to growing and accumulating wealth.

Perhaps that is why 70% of our clients are women. They do tend to have a somewhat more pragmatic approach (not that some men are not also pragmatic, of course).

Folks, I know that you all know this, but ...

Investing has risks, although we do our best to control that risk. Past returns are not in any way a guarantee of future returns and although we work our tails off to try to be better than the benchmarks,  there is always the possibility that circumstances out of our control will , at times, interfere with the year to year returns. Over longer terms, the historical average returns are certainly possible, but in no way are they certain.

If you would like to receive this blog direct to your inbox, please email:

bianca@highrockcapital.ca

Ready To Retire, Part 2

With a few hundred thousand in various forms of savings and a $400,000 home we worked together to build a plan and went about forming a strategy to get reasonable growth, but within a prudent and well diversified framework.

That framework proved important through the 2008/2009 time frame, because not only did it limit the downside of the value of the portfolio and allow us to keep our wits about us through a fairly scary period (and stick to the plan), but it also allowed for a very quick return to growth in the portfolio. Portfolios that carried more risk through that period took a lot longer to recover.

That period in and of itself, taught me a great deal, not only about about balance and diversification, but about the perils of human emotion that might cause one to abandon a good plan. The following years of growth were less about finding the right growth assets, but more about the balancing and re-balancing of the portfolio to keep the asset allocation consistent and properly diversified and the regular updating of the wealth forecast (the key to defining and re-defining portfolio startegy).

This style of balanced investing certainly caught on and with some pretty solid marketing from my (then) partner, the practise grew, significantly. Probably too much, because it spread me way too thin (another story for another time).

But that certainly did not stop me from making sure that my client couple, now beginning to see the time in the future where their dreams would be realized, were being well taken care of.

When I moved on to High Rock to build an even better home for client care, they were naturally anxious to stay the course. I was happy to have fewer clients so that they could all receive the attention that they deserved. Specifically to provide them with a Certified Financial Planning professional to improve upon their "wealth forecast" for their retirement and some crucial portfolio model tactical expertise from my new partner. The discretionary management platform that we work from now, is so much more efficient (and we even further reduced their costs).

We are very much ready for them to retire and spend the next 30 plus years with us to manage their financial life through their retirement!

From a few hundred thousand in savings and a house to this:

in 15 years!

And now a retirement that looks like this:

Congratulations to these folks for making a plan and patiently sticking to it and coming out the other side with  great success!

On another note: It is webinar Tuesday at High Rock, where we will recap the latest week of the important happenings in the global economy, financial markets and the world of wealth management for our High rock clients. We will post the recorded version at http://highrockcapital.ca/current-edition-of-the-weekly-webinar.html at approx. 5pm EDT. So feel free to click on the link to tune in.

Ready To Retire: A Success Story!

It started some 15 or so years ago when I first met this particular couple, they were a little skeptical in the beginning, their previous advisor thought them too small to really take much interest in them (so they were adrift in the world of expensive mutual funds), but I was relatively new (to the wealth management world) and excited to take on the challenge (and to this day, still excited to take on folks who want to structure a plan for their future).

My trading background had taught me all I needed to know about risk, but the institution who brought me in to the world of wealth management and financial advice was more interested in my "gathering assets" than training me in the art of investing those assets. There was definitely a bias (financial incentive for me) to place those assets in the institution's brand name funds, however there were lots of other mutual fund companies (too many really) trying to steer me in their direction.

In the early years, believing that there must be a better way, I wandered about the world of wealth management, focusing on what I knew (fixed income assets) and avoiding (for the most part) giving control away to a mutual fund manager who I could not even speak to directly about their plans for my client's money. I was invited to hear them speak in front of a room full of other advisors, but it was all just a smooth sales pitch for the most part (but got me a couple of credits for my "continuing education" requirement).

As luck will have it, I was introduced to a group (based out of Los Angeles, of all places) who were starting a new type of wealth management service, trying to create a better client experience and bring in a different, less costly and more holistic approach (which aligned well with my philosophy).

They introduced me to what I would later call the "Wealth Forecast" and the rationale behind its purpose of "discovering" all that was important to a client.

So my clients (this couple in particular, ready to retire some 15 years later), who had stuck it out with me in the early going, were treated to a much superior platform for investing and long-term wealth management as the LA company mentored me along.

Most importantly, I felt connected to the LA firm because they were open and accessible about what they were doing with my clients money and as I grew more comfortable with them, was able to relay this on-going management experience back to my clients (which in turn gave me a better connection with my clients).

In time, as I worked my way up the "learning curve", I became ready to take on the portfolio management role myself and using all the guidance attributed to my LA friends, set about to create my own Canadian version of good client care.

The couple in question (and all my other clientele) were treated to a further reduction in cost and the added value of my personal touch toward risk and return for their portfolios.

Tune in tomorrow for Part 2 of this story and some more insight into what this couple has been able to accomplish with their dedication to making a plan, sticking to it and retiring successfully.

If you would like to receive this blog directly to your inbox, please email: bianca@highrockcapital.ca

Ad Nauseum

We have been quite adamant and perhaps somewhat relentless (for almost a full year now) about the current status of value (or more exactly the lack of value) in equity prices and especially those in the US.

Today the US Commerce Department released the updated reading on Q4 2015 GDP, which was revised up to 1.4% from the last report of 1%.

On the surface some might take solace in an upward revision of the state of the US economy. However, that is rather historic (backward looking) data as we approach the end of the 1st quarter of 2016.

 Generally, we find it considerably more worthwhile trying to look forward to determine what comes next and how we should structure our portfolios (and for our clients who invest along side of us) for the best possible and prudent risk-adjusted strategy.

Sometimes, however, it helps to look back to see how economic cycles have resolved themselves in the past to gage just where we are in the current cycle and what might transpire in the future as a result.

Alongside the data for Q4 2015 GDP, the US Commerce Department also released data on 2015 Corporate Profits.

Last Tuesday, we focused on 3 indicators that have historically predicted recessions to follow.

One of them focused on Corporate Profits, but was without the most recent data.

So here is the updated version including today's data release (circled):

So folks, perhaps it is time to worry less about real estate prices in Vancouver and re-think exposure to US equities (and your portfolio strategy):

Because we see a pattern, where equity prices have historically followed Corporate Profits with a lag in timing. A lag that is overdue in the current environment. What really stands out in this chart? S&P 500 prices are still relatively close to their highs.

Just saying: because I am afraid of high places and standing too close to the edge.

Lots Of Stuff Going On!

Terrorist attacks in Brussels, North Korean rockets, Trump's bullies and Canada's budget.

And behind the scenes, as volatility sits at its lowest levels since October, the state of the US Economy is still a wild card!

Wonder why central bankers are so worried (because so much global monetary stimulus does not appear, for the moment, to be doing anything other than reducing volatility)?

Here are 3 charts that worry us about the US economy:

We have talked about wholesale inventory to sales ratios:

and how increased levels have preceded recessions (periods in blue) in the past.

When the ratio of coincident economic indicators to lagging economic indicators falls, it has previously signaled a recession to follow:

Falling corporate profits have also given advance warning of previous recessions:

Corporate profit growth has been declining for the last 3 quarters (of 2015) and are expected to fall for the next 2 (of 2016).

While current levels of volatility have slipped below their longer term averages, this may just be the eerie calm before the storm.

Today is webinar Tuesday at High Rock, we will discuss all of this and more with our clients at 4:15pm (EST) today and post the recorded version at about 5pm (EST). So feel free to listen in at http://highrockcapital.ca/current-edition-of-the-weekly-webinar.html

2nd Opinion Part 3

I got (more) mail:

" Thank you Scott! I took your advice and set up a call with (advisor name, name withheld for privacy purposes) to discuss some of the questions that you suggested" :

(as a reminder, for those interested, here are the questions that I suggested in my Feb 11 blog):

Question 1) What am I getting for your 1.77% annual fee?

Question 2) Given my desire to retire in 12 years (it was 17 years when we started working together), is this risk profile (only 28% Fixed Income) adequate?

Question 3) Why so much exposure to Canadian Equity markets when Canada is only 4% of the global equity market?

Question 4) How much did you get paid to sell me those high risk and (for the most part) losing Junior Oil and Gas stocks that you were so excited about?

5) My total portfolio value is now back to the same level as it was in early 2013, what do you propose we do next?

"As it turns out, (advisor name)  was not on the call at all and I was told that I was to speak with his assistant about my portfolio questions because that is how their procedure worked. When I said that I preferred to speak with the person who I had signed up with in the beginning, I was told that I would have to wait a few more weeks because his schedule was very full, so I said that I would use the time now to ask some questions and set up a call with (advisor name)  when the next appointment became available."

"When I asked about my fee, I was told that it was 1% all in. When I pointed out the MER fees that you had indicated, he said that he would have to look into it, but that they were not very much."

"When I asked about the asset allocation in my portfolio and why it was structured the way it was, given my circumstances and more volatile markets, I was told that is the way it is for all clients because (advisor name) had set it up that way, but, if I wished to change it, I could ."

"I asked: isn't that your job? You are the experts."

"The assistant, apparently, would have to discuss it with (advisor name)".

"It dawned on me that I was not going to get much of anything out of this conversation, so I asked to just have the assistant set up an appointment with (advisor name) when his schedule permitted it".

"I am still waiting."

"Can we set up a call?"

Absolutely!

If you would like to receive this email directly to your inbox, please email bianca@highrockcapital.ca

It's Not Over 'Till Its Over

I get mail:

One reader writes: "I have the feeling that this secular bull market is not yet over and it might even surpass the longest bull market (1990-2001). What do you think?"

An excellent question!

I am assuming that the bull market in question is the S&P 500, because the All Country World Equity Index is no longer in a bull market (it ended last August) and until it breaks out of it, is now trending down:

As for the S&P 500:

Until it breaks the 1800 level (which is more or less at the lower end of the up sloping trend channel), the "secular" bull market is alive. However, a bull market, as we know it, is characterized by higher highs and lower highs. Since May of 2015 the market has been characterized by lower highs and lower lows, but the lows have yet to breach the lower band of the trend.

So much for the technical details, which only tell part of the story.

As for the fundamental details: 

On a price to earnings basis, stocks are expensive. Earnings are entering into their 4th consecutive quarter of negative growth.

As we have said before, until the green dotted line (prices) moves down to intersect the blue line (earnings), stocks remain expensive. Unless earnings growth starts to re-appear, it makes little value sense to buy stocks.

However, while retail (individual) investors appear to have "got that memo", corporations continue to actively buy back their own shares:

Low interest rates (cheap borrowing costs) continue to inspire corporations to buy their own shares. It also allows CEO's to bank bonuses for the improvement in the share prices of the companies that they run.

Money is not going into capital spending and investing for long term growth.

How long can this go on for? As long as interest rates remain low, perhaps (or until lenders no longer want to lend to corporations whose earnings are not growing).

It's not over 'till its over, but I fear that it is not long before the reality catches up with the myth.

As always, I am thrilled to get readers questions (and feedback) please keep them coming.

scott@highrockcapital.ca

If you would like to receive this blog directly to your inbox, please email bianca@highrockcapital.ca

"Dot Plot" Madness!

Ok folks, for those you you who need this stuff to be able to sleep at night, here you go!

This is what the US Federal Reserve's FOMC committee members vision as the future for the US Federal Funds Rate (i.e. interest rates in general) looks like as of today's meeting:

If you click on the chart it will expand for you.

On average 2 more interest rate increases in 2016.

The green line is the average of each member,s "dots" which represent their individual (one dot per member in each respective year) expectations.

Interestingly, the actual market for overnight lending between banks (OIS), the red line, isn't adjusting to the new data. Debt markets are not buying it. Something to consider as expensive equity markets get more expensive.

Oh and for reference, here is what it looked like in December when FOMC members anticipated, on average, 4 interest rate increases for December:

The OIS market was skeptical then as well.

What our take on all of this is:

The economic signals are not (at the moment) good for growth and while the Fed is reluctant to suggest this publicly for fear of scaring the all important consumer from spending and boosting growth, their credibility has grown thin. 

They want investors to take on more risk to paint a picture of a brighter future by driving the value of risk assets higher (so they are, at least temporarily, keeping interest rates down and hoping to encourage investors out of low return safe assets).

Economics is a behavioural science and the Fed (and most central bankers for that matter) wants to steer that behaviour, while behind the scenes there is true uncertainty of what is coming next.

Stay tuned!


If you would like to receive this blog directly to your inbox, please email bianca@highrockcapital.ca

US Fed Decision Day

There is a lot of focus on the Federal Open Market Committee's (FOMC) discussions and actions that will be made public at 2pm today.

They will likely not raise interest rates, but the wording of their statement and the "dot plot" of expected future interest rate increases by committee members will be scrutinized by financial market participants for clues of what to expect next.

There may be some potential for increased levels of volatility.

In a nutshell, the Fed is anxious to get interest rates back to  more "normal" levels. What is considered normal is certainly open to debate and in fact smarter economic minds than mine continue to debate it.

To us what is evident is that, at the moment, the US economy is not as robust as FOMC members had hoped back in December when they raised the target rate by .25%.

We cover all the details in our weekly webinar, which was recorded yesterday and can be found on our website at 

http://www.highrockcapital.ca/current-edition-of-the-weekly-webinar.html

Suffice it to say that the domestic economy (which is powered by the US consumer) has suffered from the drag of the struggling global economy. Until the consumer spends more, the US economy will struggle. Growing employment numbers have not inspired the consumer to date. There is debate as to whether the consumer is saving their earnings to spend in the near-term (although earnings are not increasing with increasing employment, which suggests that the employment growth is in lowering paying jobs) or whether as we have suggested in the past that consumer demographics are changing with the aging population: baby boomers saving for retirement and millennials who have significantly less money to spend.

How does this impact investing?

US equities represent over 50% of the benchmark global equity index.

If the consumer does not spend, sales and ultimately earnings, which are about to enter a 4th quarter of negative growth, will continue to stagnate.

Price to earnings ratios are at a very expensive 16.1 relative to the 10 year average of 14.2. If earnings are in decline and continue that way, stocks are not a prudent investment, until that price to earnings picture changes (i.e. moves lower).

With politics in Washington at a virtual stalemate (no fiscal stimulus is coming anytime soon), it is left to the Fed to inspire the consumer, to get them back into buying mode.

But is that within their power?

Higher interest rates will express confidence in the US economy (but may have a very significant and negative impact on those who have too much debt, households, businesses and developing nations) .

Fed concern over the US economy will not inspire the consumer.

Certainly the Fed is in a very difficult position and as important as their actions and words may be, uncertainty will remain and with it heightened levels of volatility.

For these reasons we remain cautious and prudent: overweight cash and government securities, underweight equities.

Stay Tuned!

If you would like to receive this blog directly to your inbox, please email bianca@highrockcapital.ca

How Does Your Advisor Invest His / Her Money?

Have you ever asked your advisor what their investment portfolio looks like? Will they show you the holdings that they have in their portfolio?

If they are advising you to purchase certain securities (stocks, bonds, ETF's, mutual funds, etc.) for your portfolio, are they in turn doing the same for themselves?

I am not talking about the asset allocation, its easy for an advisor to say "sure, my portfolio is balanced".

But is she / he buying the exact same securities as she / he is recommending that you buy?

If not, why not?

More importantly, is it a conflict of interest if they are recommending securities to you (especially if there is a commission involved) that they in turn are not purchasing for themselves?

As a client, I think that you should have the right to know exactly how your advisor invests their money. That is true transparency.

At High Rock we invest in the same securities as our clients.

We have 3 models: Fixed Income, Global Equity and a Tactical (value oriented) model. Each of the models will contain securities that we determine represent appropriate percentage weightings that are relevant value for the current economic and financial market conditions.

As owners / managing partners, our money is invested in those  models, as is our clients. So, our clients own the exact same securities that we do.

In fact, when we started the Private Client Division of High Rock Capital Management, we did so to invest our personal money with all the expertise that we had garnered over our combined 60 plus years of experience managing the risk that comes with investing.

Then we invited those who wished to share in this experience to invest alongside us, many followed and have shared in our success.

Each quarter, when we send out our quarterly performance reports, our clients receive a statement from Wychcrest Compliance Services (an Independent Review Committee) that reports directly back to them, informing them that we are invested in the same securities as they are and that we have no conflicts of interest.

We do not have to do that (it is not required by any regulatory organization), but we do because we think that it helps to maintain the trust. A trust that "takes years to build, seconds to break and forever to repair".

In the managing of clients wealth, trust is a key concept that many advisors take for granted. 

We don't.

If you would like to receive this blog directly into your inbox, please email: bianca@highrockcapital.ca

At The Crossroads!

More stimulus than expected from the European Central Bank yesterday: the initial reaction was favourable, the second-thoughts, not so much and plenty of volatility (our key theme for 2016). This morning, with oil testing $40 and the International Energy Agency suggesting that we may have seen the bottom (output has been falling inside and outside of OPEC), European stock prices have jumped higher.

So now, once again, we wait. (See last Fridays blog: Hurry Up and Wait)  http://familywealthmanager.blogspot.ca/2016/03/hurry-up-and-wait-we-were-looking.html

We wait to see if the ECB's stimulus has the desired effects: to further stimulate economic growth and push inflation expectations higher. 

We wait to see what the Chinese government and The People's Bank Of China come up with for further economic stimulus to keep GDP growth at their target 6.5%.

We wait to see what the March 22 budget brings for the Canadian economy and what, if any, response that the Bank Of Canada has to that. (Canada's employment growth showed little change in February: fewer full time jobs, more part time jobs, with unemployment rising).

We wait to see how the US consumer responds (2/3 of the US economy) going forward and if inventories (at the wholesale level) continue to build or if they are reduced. 

We wait to see how the US Federal Reserve responds to the data (both domestic and international).

Lets not leave out the struggling Japanese economy (which is a longer term story of demographics).

We wait to see if corporate revenues and earnings begin to grow again (because they have had negative growth for 3 consecutive quarters and the expectations for the 1st quarter of 2016 is suggesting that there will likely be a 4th). 

Until we get more answers we need to remain defensive (as we at High Rock have been doing since May of last year):

This means that (until further notice) we remain with lower exposure to higher risk assets (like equities) and greater weightings of cash and government securities in our models (for better buying opportunities in the future).

Waiting at the "crossroads" for more direction. A very prudent strategy.

If you would like to receive this blog direct to your inbox, please email bianca@highrockcapital.ca

Warning!

Not to be too alarmist, but one of the indicators that we monitor quite closely and has preceded previous recessions, the ratio of inventory to sales (at the wholesale level) in the US rose to levels not seen since 2009 in January. Inventories rose and sales fell.

When inventory is not leaving the shelves, prices need to be lowered to encourage sales and move inventory. Revenues fall and production gets reduced. This is not good for the economy and / or earnings.

We will have to keep a close eye on developments in this indicator.

Meanwhile, the Bank Of Canada continues to "stand down" from adjusting monetary policy until they get a chance to review the upcoming budget from the new Liberal government which is to be delivered on March 22.

Tomorrow, we shall see what the European Central Bank has cooked up to try to stimulate the economy and revive inflation in the Euro area.

Stay tuned!

International Women's Day 2016

Pledging for Parity:

The World Economic Forum predicted in 2014 that it would take until 2095 to achieve global gender parity. One year later in 2015, they estimated that a slowdown in progress meant that the gender gap wouldn't close until 2133.

As a father of 3 daughters and a grandfather of 2 granddaughters (1 step-granddaughter) I have a vested interest in seeing those dates moved up considerably.

Interestingly, at High Rock, over 70% of our clients are women.

I cannot say that I am an expert on women's issues (although I am certainly in tune with them), but I know that a more balanced world is a better world.

For more info click on the link below:

http://www.internationalwomensday.com/Theme

Why is gender parity important?

Gender parity is linked to economic prosperity. It is an economic imperative. Women's advancement and leadership are central to economic prosperity. Profitability, ROI and innovation all increase when women are counted among senior leadership.

Numerous global studies on the impact of women in leadership reveal the following findings:

• Women are the largest emerging market in the world
• More equality = higher GDP
• More equality = more productivity
• Better gender balance on boards = better share price and financial performance
• More gender-balanced leadership = more prosperity
• More women political leaders = more prosperity

What makes a difference?

• Men and women alike agree that more female leadership leads to stronger companies.
• 64% of high performing companies reported that men and women having equal influence on strategy in their organizations, compared with only 43% of the lower-performing companies.
• Men seem to be aware of the unconcious bias in the workplace that holds women back, which means that we now can spend more time identifying and eradicating it.

What accelerates womens advancement?

• There are three accelerators, working independently and together, that can change the trajectory of women's achievement:

1. Illuminate the path to leadership by making career opportunities more visible to women.
2. Speed up culture change with progressive corporate policy, such as paternity leave and flexible working.
3. Build supportive environments and work to eliminate conscious and unconscious bias.

Women need more options to excel and the world will be a better place when they do.

So take the pledge to:

1. Help women and girls to achieve their ambitions.
2. Challenge conscious and unconscious bias.
3. Call for gender balanced leadership.
4. Value women's and men's contributions equally.
5. Create inclusive and flexible cultures.

http://www.internationalwomensday.com/Pledge

Today is Webinar Tuesday at High Rock, where we will address what is going on in the global economy, financial markets and wealth management for our clients. We will post the recorded version on our website at

http://www.highrockcapital.ca/current-edition-of-the-weekly-webinar.html

so please feel free to tune in at or about 5pm EDT to listen.

March Madness!

Oil prices are up 34% from their lows.

And as I suggested in Fridays blog, once again we have gone (as all markets will do) from very "oversold" territory, back to more reasonable levels.

2 weeks ago on our weekly webinar (and again on last weeks webinar) we suggested that, in all liklihood, the path of least resistance was towards higher prices (and in fact added some energy names to our High Rock tactical model).

Last week, prices broke through and moved above the down-trend line that began in June 2014.

Short positions have likely been covering and there are many factors that can and will influence supply and demand (including the politics surrounding oil) that could push prices up to the $38-40 level if the buying interest continues (at which point more supply may come on line, especially from US fracking operations).

However, it may take sometime and a significant increase in demand to lift prices much beyond that. Much of that will depend on the global economy, which is certainly struggling.

Commodity prices (as measured by the Bloomberg Commodity Index) have also bounced off of their lows:

And that is certainly assisting the C$:

Which hit lows near $US 0.685 in January before rebounding to near $US0.75 on Friday (a 9.5% move). A chance to breath for the snowbirds!

The Bank Of Canada now has the tricky job of weighing this with the upcoming Liberal stimulus budget in determining their next monetary policy moves.

It is time for central bank March policy meetings:

• March 9: Bank Of Canada
• March 10: European Central Bank
• March 14: Bank Of Japan
• March 16: US Federal Open Market Committee
• March 17: Bank Of England

March Madness Indeed!!

Stay Tuned!

Tomorrow is our Weekly Tuesday Webinar for clients:

We shall discuss all of the above and more in greater detail and post the recorded version on our website at or about 5pm EDT:

http://www.highrockcapital.ca/current-edition-of-the-weekly-webinar.html

Feel free to check it out.