Insights: A story that stuck, charts galore + puppies!

Good reads:

·        How long does it take to make your money back after a bear market?

·        Five ways you might benefit as interest rates drop like a rock

·        Tip from experts – our co-workers in Asia – on working from home

·        What the government is offering you in coronavirus-related benefits and how to get them

·        Well that wasn’t much fun – where to from here?

·        Video: Don’t react emotionally and miss out on important market days

·        Infographic: Black Swan events – short term crisis, long term opportunity

·        Canada’s COVID-19 Economic Response Plan

·        An open letter to our clients

Best quote of the week:

“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.” – Jack Bogle

A story to remember:

I thought I would start this update with a story.

A number of years ago I took a road trip from Vancouver all the way down to southern California. It was an absolutely stunning drive and it offered up experiences I wouldn’t have otherwise had if I’d simply flown to the Golden State. I highly recommend driving the west coast at some point in your life if you haven’t done so already. 

At any rate, I did the trip with a group of people. Some I knew and others were brand new to me. During one of the stops along the way I met an older fellow who had just lost his elderly mother to cancer. Before she passed away she asked him if he knew what the most important thing in life is. The question took him aback and he didn’t quite know what to say. Eventually he replied that the most important thing is “love and family”. She shook her head and said he couldn’t be more wrong. She replied that the most important this in life is just one simple thing: your health.

He said that he didn’t understand what she meant by that until after she had passed away and he wound up with the very same cancer that claimed his mother. He went on to explain that it wasn’t until he was in so much pain from his treatments that he realized what she meant. He realized that someone in poor health simply cannot concentrate on anything other than their own physical pain. In other words, without their health, they can’t properly care for their loved ones and therefore have any sort of real family life.

It made all the sense in the world to me and is a lesson that has always stuck. I’ve always felt that the lesson should include finances though. Without your finances, your ability to care for your loved ones is equally taxed.

The reason I tell this story is because I think it is the very reason why our current circumstance has struck such a chord with people. It is the human element. The world is scared because it impacts both health and finances – the two most important elements in peoples’ lives – at the very same time. In my opinion, it is the underlying reason why the panic selling has been so intense.

They say that panic is contagious and it is certainly presenting itself that way right now. The relentless selling has not been rational and has been driven by extreme fear. 

There are many reasons to remain positive though and I’ll include some of those in the “visuals” section of this newsletter. Remember: it’s not a question of if markets will recover, it’s a question of when.

PS – the fellow I met in California ended up in remission and is still taking road trips with the same group, while putting a priority on his health and finances of course!

Best charts of the week:

It goes without saying that we’re going through a difficult time in the world. Sometimes a look back on history can provide some context and offer a glimpse of what the future might hold.

Here are the other 12 bear markets that are worse than the current version along with their ensuing one, three, and five year forward returns:

Here is another way of looking at things. No matter the severity, on average the subsequent returns are positive:

So the next question begs: after going through a big pullback, how long does it take to breakeven?

When markets are tough, sometimes it is helpful to remember that every single year there is a major event that causes some sort of negative reaction in the market. Obvious some are worse than others (such as our current situation). Regardless, the markets have always recovered. Again, it’s never a question of if markets will recover, it’s a question of when. 

Attention taxpayers:

Canadian taxpayers – CRA has extended the individual tax filing deadline to June 1, 2020. The CRA will allow all taxpayers to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020. This relief would apply to tax balances due, as well as instalments. No interest or penalties will accumulate on these amounts during this period. Individuals in a refund position are still entitled to their refunds upon assessment of their tax returns, so there is an incentive for those individuals to file prior to June 1. Details here.

US taxpayers – the IRS is extending the payment deadline. Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. Details here.

Beyond the Markets:

The world is currently filled with a bunch of doom and gloom, so what is a good distraction? Puppies, of course! Here are some interesting facts on the most adorable creatures out there:

·        The word puppy has French roots. Etymologists think the term puppy may come from poupeé, a French word meaning doll or toy. William Shakespeare's King John, believed to be written in the 1590s, is one of the earliest known works to use the term puppy-dog.

·        The biggest litter on record was born to a Neapolitan mastiff that gave birth via Caesarian section to a batch of 24 puppies in Cambridgeshire, UK in 2004.

·        Sometimes, a puppy in a light-colored litter can be born green. In rare cases, the fur of a light-haired puppy can get stained by biliverdin, a green pigment found in dog placentas. It's not permanent, though. The green hue gradually disappears over the course of a few weeks.

·        Dalmatian puppies are born without spots. The markings usually begin to show up after four weeks or so.

·        In May 1936, John Steinbeck's Irish setter, Toby, was going through his teething phase. Left alone one night, he demolished half of his master's manuscript for Of Mice and Men, eating through two months of work.

·        Looking at puppies can make you more productive. In a 2012 Hiroshima University experiment, people who'd just seen puppies and kittens had an easier time concentrating on the task at hand than study subjects who saw other types of images.

·        The Super Bowl spoof known as the Puppy Bowl isn't broadcast live. Instead, it is shot over the course of an entire week, takes two entire days filming, and requires the help of 100 canine wranglers.

Source: Mental Floss

Wishing everyone a nice weekend. Be well.

Cheers,

Kim

Kim Inglis, BCom, CIM, PFP, FCSI, CAFA

Financial Advisor & Associate Portfolio Manager

Inglis Private Investment Counsel

Raymond James Ltd.

Scotia Plaza – Suite 5300

40 King St. W., P.O. Box 415

Toronto, ON, Canada M5H 3Y2

T: 416.777.6417 (Toronto)

T: 604.654.1160 (Vancouver)

TF: 1.877.363.1024

www.inglisprivateinvestmentcounsel.com

The opinions expressed in this newsletter are those of the Financial Advisor Kim Inglis, BCom, CIM, PFP, FCSI, CAFA and not necessarily those of Raymond James Ltd. (“RJL”) or Raymond James (USA) Ltd. (“RJLU”). Statistics, factual data and other information presented are from sources, believed to be reliable but accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James Ltd. and Raymond James (USA) Ltd. is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James Ltd. and Raymond James (USA) Ltd. financial advisors may only transact business in provinces and/or states where they are registered. Follow-up and individualized responses involving either the effecting of or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in provinces or states where the financial advisor is not registered. Raymond James Ltd. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund. Raymond James (USA) Ltd., member FINRA/SIPC.