I normally write these missives in the middle of market chaos – the times where the opportunity for both significant gains and losses can be realized, depending on one’s behaviour. Investor behaviour is the #1 determinant of lifetime returns.

This is not my usual missive. Today’s dispatch focuses on transitions, specifically:

  1. The Market Transition – We believe the next 12 to 18 months are going to be far more productive than the last 12 to 18 months. Below, I present the evidence and walk you through our intentions.
  2. Chris’s Transition – I will be 64 this coming January. While I have no intentions of retiring any time soon (honestly, I am challenged by the whole concept), it is incumbent upon me to develop the next generation, so we at Aspira can continue to look after you and your family even if I fall off my bike one too many times, which has been, thus far, the biggest threat to my longevity J. In our efforts to expand the Aspira value proposition, this section outlines some new initiatives that I am excited to take on, and to make room, some things I must pass the baton on.
  3. Your Transition – Not surprisingly, like me, a good number of our clients are getting older too. This presents a number of new challenges for all involved and it also comes with some great opportunities for us to walk alongside our clients, preparing the next generation and being there for your loved ones when your exit date finally arrives.

The Market Transition – This section is a little shorter than my normal missives. That said, here is how we see the world today:

  • Investors, both professional and retail, are still heavily focused on the upcoming recession. You know, the one that the media has been barking about for the last 18 months. In our view, the old adage of “if it is in the news, it is in the stocks” applies. Recall that the market is a forward-looking animal and, after 18 months of such talk, we believe that any pending recession is pretty much priced in. You may also recall that the U.S. did have two back-to-back quarters of negative growth ending Sept 30, 2022, which is the accepted definition of a recession, even if the U.S. administration twisted themselves in knots claiming it really wasn’t. Let’s also remember that market bottoms and the bottoms of recessions never coincide. If you accept the Invesco S&P 500 Equal Weight ETF as a proxy for stock market performance, then it seems the bottom for this cycle occurred last October.

RSP Invesco SandP 500 Equal Weight ETF

Chart courtesy of

Other evidence of note:

  • Inflation is heading south – the US’s June 2022 inflation rate pegged in at a 9.1 per cent annualized rate. The May 2023 rate was 4.05 per cent and Canada’s April 2023 rate was 4.3 per cent. Prices paid are falling and the rate of wage growth is slowing.
  • The world’s benchmark interest rate, the yield on 10-year government guaranteed bonds, is putting in a series of lower highs and lower lows.

TNX CBOE 10-Year US Treasury Yield

Chart courtesy of

  • Both copper and semiconductors are breaking out. If you are not sure why that is important, please reach out.

Copper Continuous Contract

Chart courtesy of

Semiconductor Index - Philadelphia

Chart courtesy of

  • More and more stocks are participating in the rally – this is no longer just a rally of mega cap technology stocks.
  • The resource stocks are starting to move north again – this is of particular interest to us as it was our resource exposure that allowed us to significantly outperform the market in most of our equity strategies through 2021 and 2022. There is no denying it has crimped our performance thus far this year, but that has not dissuaded our long-term view. Our expectation is that the 2020s will be known as the resource decade in the years to come.

It is worth noting that Canada’s oil and gas companies en masse:

  • Are profitable at current energy prices
  • Have very little debt
  • Are boosting dividends and increasing buybacks

CDN Oil and Gas Historical Valuation

Chart courtesy of Raymond James Ltd.

All of the above, while global oil demand in Q1 2023 surpassed the previous all-time record hit in the pre-Covid era of Q1 2019. This is happening while global production is rolling south, i.e. OPEC+ cuts and declining volumes from U.S. shale oil. Meanwhile, valuations are stunningly attractive due to recession fears. Simply put, there is a lot to like.

The wrap-up? Our view is that things are getting better and that is especially true for the resource and industrial sectors.

Chris’s Transition – Like you, I have always been in transition. In the early days, it was a matter of attracting enough new clients to survive. Then, we moved to asset-based pricing as opposed to commission, which allowed us to spend more time planning and less time selling. Then, we moved from mutual funds to investing alongside our clients with The Dividend Value Discipline™ and the various strategies thereof. Each was a significant transition that allowed us to do more for our clients and you have rewarded us accordingly. I remain grateful, as is the rest of the Aspira team.

Joanne continues to advance in her role as team lead of the client experience. I appreciate her more every day. Alex does likewise in his role as our de facto chief investment officer and develops our team of analysts. Both of them are taking on broader responsibilities for the overall direction of Aspira and I am tickled pink with their progress. Of course none of this would be possible without the support and effort of the rest of the team - Ben (relationship), Melissa (relationship), Clarke (financial planner), Brittany (marketing/digital media), L.J. (cross border) and our contract researchers, Edon and Maxim.

My personal role has changed from master of everything in the early days to a more focused role today. The team continues to get me involved in client situations when they believe I can add value. We need to maximize the value of my lessons learned while attending the school of hard knocks J. Increasingly, I am spending more time mentoring the team, helping families with intergenerational planning issues and far less time analyzing individual stocks. Why? Because Alex and his team are far better at it than I am. Ditto for Joanne and her team on the operational issues that deliver your client experience. Admittedly, there were far more bumps on the latter front than I would deem reasonable in the post Ryan/Covid era, but the last six months have seen significant progress, especially since Joanne and Melissa got their feet on the ground after joining us in April of 2022. As one would expect, their clients have followed and again, we remain grateful for the opportunity to serve.

This fall, I am super excited to launch a new podcast, From Generation to Generation – a dad daughter podcast focused on passing all forms of wealth to the next generation, a subject that is increasingly near and dear to our clients and me.

From Generation to Generation

To make room for that, Alex will take over the quarterly market commentary publication. After 20+ years of audio and scripts for The Quarterly Opportunity Update, it is time to put it to bed. Alex will launch our Q2 2023 report in July under the banner, The Quarterly Compass. I will continue to write Special Market Dispatches during tough market events to remind all of us of rule #1 – investor behaviour is the number one determinant of lifetime returns.

Your Transition - As I write this section, I am thinking about the 60+ crowd. I know you are experiencing the dreaded health diagnosis, if not personally, then, with some of your . At the same time, you have had to say goodbye to your parents or you are in care mode as they become ever more frail. On the other end, you worry about getting your kids launched and how they are ever going to get into the real estate market. How much help is too much – they do need to sweat, don’t they? As we start losing some of our own friends, we start thinking about our demise and the challenges of leaving wealth that is a blessing rather than a curse. Over the decades, mostly due to lack of planning and lack of transparency, I have seen far too many cases where inheritances have torn families apart, becoming a curse rather than a blessing.

I am having many such conversations with our clients, involving Raymond James Trust (RJT), their estate lawyer and, quite often, their adult children, when appropriate. I have seen families appoint RJT as their executors, not because they didn’t trust their children, rather they didn’t want to burden them. I have seen other cases where they didn’t trust the children to get along. I have seen cases where the estate lawyer was a better fit for the executor than RJT, for now, but they age too. We have helped a single parent plan for the day when they won’t be around for their disabled child. And all of the proceeding is just about the money and legal complexities. It says nothing about the two most important kinds of capital we get to leave the next generation – character and intellect. That, friends, is the subject of our upcoming podcast this September. I look forward to sharing it with you.

Best wishes to you and your loved ones for a great Canadian summer,