Market Commentaries –

Market Commentary October 28, 2016


North American markets continue their 7 year, largely uninterrupted rally.  The US bull market which has been going on since 2009 periodically hits new highs.  The TSX has also rallied as commodities have somewhat recovered.

Polls predict a Clinton landslide and the markets favour that.  But polls can be wrong as they were with Brexit.  Both Clinton and Trump are better at beating themselves than they are at beating each other.  Whichever candidate has less damaging scandals break immediately before the election may win. A Clinton victory although more likely than not is by no means a foregone conclusion.

Commodity prices are experiencing a muted recovery but are nowhere near their highs.  This is reflected in the mediocrity of our resource dependent market in comparison to the US.  For oil, the near-term glut in supply will keep prices in check.  In the mid to long-term cleaner (and more importantly cheaper) technologies will reduce demand for oil.  Developing nations may skip the damaging fossil fuel phase altogether as renewable energy sources become cheaper.  Over the long-term this does not bode well for oil.  The era of fossil fuels like that of the horse and carriage will eventually pass.  It’s not a question of whether this transition will occur but rather of how quickly and when.

Our world is arguably changing at the fastest pace since the 1960s.  Two of the most important trends are globalization and the aging population.  Capital and people are increasingly mobile: the wealthy elite seek to preserve their capital in safe assets such as real estate in Vancouver.  Economic migrants flee poverty in Latin America and flow into the United States.  And refugees fleeing war and persecution in North Africa and the Middle East are inundating Europe.  This global migration of capital and people is causing tension as governments try to cope.  Whether it’s an influx of wealth as it is here in Vancouver or an influx of refugees as it is in Europe, globalization is having a profound effect.

The second trend to watch is the aging population.  Healthcare costs continue to balloon.  In Canada, the federal and provincial governments are currently battling over how to pay for it.  Under-funded pensions are also an enormous problem for both governments and companies.  CPP is in good shape because it is a hybrid model of defined benefit and contribution.  But OAS (which comes out of general revenues) may not be sustainable in its current form.  Many private pensions are also in trouble.  And in the US Social Security will be unable to make promised payments in full come 2034. There are simply too many recipients living too long and not enough payors.  Prime Minister Trudeau was recently heckled by youth at a rally demanding more defined benefit pensions.  Trudeaus’ response was simply that “this is not the new reality.”

The new reality is that financial responsibility rests with individuals and not with governments or employers.  We must adapt accordingly to ensure that we save enough and that it lasts for the duration of our lives.  That is why we take a cautious, pragmatic approach to retirement planning and investing.  We have strategies to address both market risk and longevity.  Please contact us to discuss your financial planning or investment needs at 604-565-9607 or

All the best,


Casey Cameron, BA, PFP, FCSI



Market commentary May 1, 2016

It has been an eventful start to 2016.  Oil prices have plummeted and our dollar has followed suit. However, history is repeating itself as oil, the Canadian dollar, and markets bounce back.

Oil reached as low as $26 USD per barrel in February. Today, it’s almost $45 USD, an increase of more than 70%. Our dollar was valued below 69 cents US in January.  It is now worth about 80 cents US.  This volatility led to buying opportunities in the Canadian market which our funds have benefited from.  Despite wild fluctuations and negative headlines,the TSX was up more than 5% in the first quarter of 2016.

In March, the Federal Liberals tabled their first budget and there were no real surprises other than a decrease in oil revenues.  As promised during the election campaign, spending is increasing drastically.  Massive deficits are projected at almost $30 billion per year for the next two years; this is in contrast to the modest surpluses of the recent past. This means that annual federal spending will be $800 per Canadian more than what taxes will bring in. The government is going all in and betting that the economy will respond favorably to this stimulus. Only time, and to a certain degree the price of oil, will tell.

Canada’s diversified economy is affected by the price of oil whereas Alberta’s concentrated economy is nearly determined by it.The aforementioned deficits are federal and do not account for provincial shortfalls –once rich Alberta is projected to run a deficit of an additional $2,500 per person for 2016 alone.  It is clear that the standard of living to which Albertans have become accustomed to on the backs of oil revenue is unsustainable. Barring a doubling in oil prices which seems highly unlikely, draconian cuts in spending will be required. Notwithstanding the oil shock and perhaps in part of a larger national trend of real estate appreciation, home prices in Calgary have only declined about 5%.

In contrast to Alberta, BC’s diversified economy is precipitating balanced budgets and soaring real estate values.  In metro Vancouver, the Canadian dream of single detached suburban home ownership is firmly out of reach for most people not already in the market, unless they have outside help.  Proposed measures locally and government policies abroad in China, may have a limited effect on affordability. However, strong demand for a finite supply (of land) ensures that high land values are here to stay.

Much to the chagrin of the establishment in the US and the rest of the world at large, Donald Trump looks increasingly likely to win the Republican primary.  However, most pundits think that neither he nor any Republican can beat Hillary Clinton.  Investors could expect more or less the status quo under a moderate President Clinton should she be elected; in many ways Wall Street is behaving like she already has.  But lest we forget that in 2008 most people thought that Clinton had an easy path to victory only to be usurped by a relatively unknown junior senator from Illinois.  Anything can happen.

Ramifications of the oil shock exemplify the importance of diversification.  This applies to nations, provinces and individual portfolios and is why we recommend a blend of both Canadian and US exposure.  Canada benefits from resource booms in good times and the US from greater diversification in bad times.  A balanced portfolio benefits from both. It’s a good time to discuss your investment portfolio!

Happy investing, and please feel free to contact me to review your investment and financial planning needs.


Casey Cameron



Market commentary October 23, 2015

Canadians went to the polls on October 19 and elected the Liberal party led by 42 year old Justin Trudeau.  Notwithstanding winning less than 40% of the popular vote the Liberals were handed an overwhelming majority in parliament.  As with the outgoing government (which also won it’s “majority” with well under half of the popular vote), virtually all power will rest in the hands of the new government for years to come.

Intending to reverse many of the prior administration’s unpopular actions, the Liberals ran what many pundits are calling a near perfect campaign.  They have promised to strengthen the middle class by lowering taxes, except for those with the highest incomes.  The highest personal tax bracket will now be more than 50% in most provinces.  Corporate tax rates on the other hand are unlikely to move anywhere near this much, if at all.  So far the change in government has had little observable effect on Canadian markets.  However, external global factors and a resulting decrease in commodity prices have weighed on resource dependant markets like ours.

In spite of little change in the overall global economic picture over the past few months, most markets have seen modest declines, primarily due to the outlook on China. People have finally come to the realization that China is slowing down.  As the Chinese economy has developed and the middle class has grown (there are now far more middle class Chinese than there are Americans), it has moved from investment-driven growth to consumer-driven growth.  Going forward, growth is expected to be closer to 5-6%; this is a perfectly normal transition in the development of an economy but nonetheless contrasts starkly to the double digit growth that we have become accustomed to.

Although our portfolios have little exposure to Emerging markets, performance in this sector warrants discussion as Developing markets are largely off more than 20% for 2015.  This is to be expected in times of global market volatility.  When times are good they are very good but when times are bad they can be very bad. On the other hand and also to be expected, Developed markets such as the United States have weathered the global volatility relatively well.  As has been the case for a long time, the US economy continues to exhibit strong fundamentals in terms of positive growth and low unemployment.  The continuation of low interest rates has also encouraged investment in the economy and stock market.  In no small part due to Canadian dollar weakness, the US component of our portfolios has produced strong returns – year to date more than 7% in Canadian dollar terms.

Asset allocation is the most important factor in achieving the desired balance between risk and reward.  The divergence in performance between emerging and developed markets demonstrates the importance of asset allocation.  This is because Emerging markets are generally composed of highly volatile small start-up companies and low grade (risky) credit.  Developed markets on the other hand are mostly composed of large established companies, many of which are household names, and high grade credit (bonds).  In making portfolio recommendations we determine the optimal asset allocation for each and every individual investor.

We continue to offer a full range of investment solutions including GICs, investment funds, segregated funds, annuities and real estate based investments.  Please contact us for your next review or to start an investment plan.

Kind regards,


Casey Cameron



Market commentary August 5, 2015

In the first half of 2015, equity markets produced dramatically mixed returns.  The Canadian market under-performed, hindered by low prices for oil and commodities in general. The increased variation in returns among regions and industry sectors increased investors’ focus on risk-adjusted returns and active investment management as opposed to exchange traded funds which have been growing in popularity.

Economic growth declined in the U.S. and Canada, as measured by gross domestic product forecasts, which in turn reduced equity earnings estimates. In Canada, the lower growth expectations reduced the prospects for higher interest rates. However, the improving employment situation in the United States and benign inflation outlook prompted a modest interest rate hike discussion by the U.S. Federal Reserve Board.  In Europe, rates rose because of profit taking in overvalued bonds and renewed concerns over Greece.  Despite some talk of global rate increases, here in Canada the prospect of a rate increase anytime soon seems very slim.  It would be too damaging for our struggling economy which is being dragged down by the sluggish resource sector.

Chinese equities were highly volatile during the first half of the year, rising nearly 70% from early February to mid-June, only to plunge 25% by the end of June. Investor exuberance about Chinese stocks overwhelmed the deteriorating fundamental picture in that market, which caused the extreme volatility.  Such is the nature of the psyche of retail investors – when things are good they often think they can only get better.  In reality this is exactly the opposite of buying low and selling high.

Other big news is the precipitous decline of the Loonie.  It recently reached an eleven year low and is flirting with just 75 cents US.  Many economists predict it will fall even further as our resource dependent export economy, and particularly oil, continues to struggle.

In local news, the Vancouver real estate market continues to be red hot.  I would know, as my wife and I just purchased a town house in Marpole.  In shopping the market, it is overwhelmingly a buyer’s market especially for single detached dwellings.  This has been spurred by a number of factors discussed above including foreign buyers which have been receiving much attention in the media lately.  The huge run up in the Chinese market has created unprecedented amounts of wealth.  To diversify, many wealthy Chinese want to get money out of China, and real estate in Vancouver is a favourable place to park their money.  The decline in the Loonie has made our market far more desirable. Although prices are increasing in nominal terms, in absolute terms (since the US dollar is still the world’s reserve currency), our real estate prices have in some cases declined in the eyes of foreign buyers.  Low interest rates also mean that the cost of mortgage financing is at historic lows – although this is more pertinent for local buyers as many of the foreign purchases are cash deals.  If you put the surge in China, and the low Loonie and low interest rates together, you have a perfect storm for a seller’s market. Time will tell how long this will last for but regardless, with everything going on, it is a good time to review your real estate situation.

As always, we continue to monitor the global markets and tailor investments solutions to meet our client’s unique needs.  Please feel free to contact us for a discussion of your finances.

All the best,


Casey Cameron



Market Commentary – March 19, 2015 – How Supply and Demand is Affecting Today’s Markets

At risk of sounding like a broken record, the big newsmakers have been oil prices, the Canadian dollar, and continuing low interest rates. All of this led US markets to record highs in February (again).

Oil prices recently fell to a six year low. This will continue to affect Canada, especially the oil rich provinces. Prices are now so low that the environmentally expensive oil sands are not profitable. Canada’s predicted GDP growth is just above 2%. This is still healthy but not stellar, especially in contrast to the US which is predicted to grow by more than 3%.

In conjunction, our dollar has continued to slide and is today worth 0.80 USD. Speculation of a rate increase in the US has increased demand for USD. This is because capital always flows where expected returns are higher. Being a petrocurrency the CAD’s value is highly correlated to the price of oil. High oil prices create more demand for Canadian dollars, thus, increasing the value of our dollar. Such is the nature of the simplest and most important law of economics – supply and demand.

The oil that fueled Alberta’s housing boom has created the conditions for a bust – Alberta has long been the economic envy of the nation but like all good things, it has come to an end. For the first time in a generation, we are seeing a decrease in real estate values in Western Canada. Less demand for oil equates to less jobs and less demand for housing. Vancouver on the other hand is still going strong. The cliché is “God is not creating anymore land.” The supply of land is limited; whereas the appetite for demand has thus far been limitless because like Sydney and New York, Vancouver’s real estate is very desirable to the Chinese. Remember, China is a vast country of 1.3 billion people.

This week, the Federal Reserve indicated that there would be no rate increase until at least by December. US markets rallied on this news and are only slightly off all-time highs. The reasons for this are twofold: firstly, borrowing to invest is cheap, and secondly, bonds, GICs, CODs etc. are very unattractive when they only yield 1-4%. Dividends and capital gains can pay much more with minimal added risk.
Investors continue to have a hard time finding yield. What would typically provide a safe income, such as bonds or GICs, are very unattractive at the moment and not just because of low interest rates. Many investors think that bonds are safe and cannot lose money; this is simply not true. Again, we are back to supply and demand. If interest rates increase, the demand for lower coupon bonds will decrease; thereby lowering their value and ensuring that the investor will not get all his/her capital back. To produce income in this environment, we are looking to dividend paying blue chip stocks, segregated funds with guarantees, and income producing real estate investments.

No matter your risk tolerance, time horizon or goals, market supply and demand affects the performance of your portfolio and we continue to stay on top of it.
Fostering prosperity and peace of mind,


Casey Cameron, B.A.

P.S. At Camlife Financial, we take a holistic approach to financial planning. We are happy to announce that we are working with a tax advisor, mortgage broker, real estate agent and exempt investment market firm under one roof in our new office at 201 – 439 West Broadway (and Cambie Street) in Vancouver. We look forward to all your financial services needs.



Market Commentary – December 2, 2014

The Dow Jones continues to hit record highs while the TSX continues to lag behind.  There has been a crude awakening as oil plummets and the US dollar soars.  What is good news at the pump for drivers is bad news for the Canadian economy and dollar.  A US dollar costs 1.14 Canadian today.

Most economies, excluding large oil producers such as many Middle Eastern countries, Russia and Canada, will welcome lower oil prices.  Growth in China and the US will in particular benefit from this.  As a net exporter of oil, the Canadian economy will suffer as both employment and government revenues will fall.  The resource dependent western provinces will bear the brunt of consequences.

The US economy continues to truck along, aided by the decrease in transportation costs. Gas is at its lowest price since 2010. Two dollars a gallon may soon be breached in several low cost States, such as Oklahoma and Texas.  This is a far cry from the four dollars plus that we saw in California last summer.  Low crude is a panacea for the US economy, not that it is needed.  Jobs are being created, real estate is appreciating, and corporate America is investing – the US stock market reflects this and we continue to take advantage of investment opportunities south of the border.

Our dollar’s weakness is a bane for travelers and snow birds but when played correctly, can be a boon for investors.  For example, investments denominated in US dollars purchased for 1 dollar a year ago will be worth 1.10 today in Canadian dollar terms, even in flat markets.  Coupled with a 20 percent appreciation in the US index, this equates to approximately a 30 percent return.  Our portfolios have been well positioned to capitalize on this and as such, have greatly outperformed the Canadian market and the banks’ Canadian balanced funds.  Our ability to invest across borders as we see fit is a huge advantage and can produce superior returns without adding additional risk.

Whenever we see record highs, we must be aware that a correction may be coming.  In the long run, markets always appreciate, so younger investors needn’t be too concerned with this.  However, those who do not have time to wait for the markets to recover after a downturn will suffer.  A benchmark used in retirement planning is 4 percent – 4 percent per annum of invested capital has historically been thought of as enough to last for life.  Is this still enough?  The answer is yes if the correct income guarantees are in place. We continue to insure that our clients who are approaching retirement have such guarantees in place.   Please feel free to contact us for a complimentary review of your portfolio.

Wishing you happy holidays,


Casey Cameron

PS. As we approach the end of the year, it means that RRSP season is just around the corner. Have you considered doing a monthly contribution instead of a lump sum the day before the deadline? Contact Camlife Financial to learn more about the benefits of doing so.



Market Commentary – August 8, 2014

…….Ukraine, Malaysian Airline’s flight MF17, Israel and Palestine, or the whole Middle East for that matter, and now Ebola?  The world is ‘going to hell in a hand basket’.  So what does this mean for your investments?  Well, as a humanitarian, I am disgusted; but as a rational investor, am not all that concerned.  Markets have always risen in the long run.

Let’s start with Ukraine.  Putin has proved himself to be a despot that is no friend to the West.  Perhaps the Republican senator from Arizona and former presidential contender John McCain put it best, “I looked into that man’s eyes and saw three letters – KGB.”  McCain is all too familiar with cold war relics as he spent years in the infamous Hanoi Hilton – the metaphor for the notorious Soviet inspired prison of the North Vietnamese.  How did markets react to the crisis in the Ukraine?  – Hardly at all.

Israel: this is the most serious conflict in the holy land since the Yom Kippur war of 1973.  Hamas (a militant Palestinian organization), has been digging tunnels under the Gaza strip for the past several years.  These tunnels have been used to facilitate suicide bombings as well as small arms and rocket attacks.  In response, the IDF (Israeli defense force) has initiated action not only on the tunnels but also on the Gaza strip itself.   The IDF, which is likely the most powerful military in the world in terms of population, has inflicted disproportionate casualties upon the opposition – to the tune of 20 to 1.  International reaction is mixed, even amongst Arab states.  That being said, the response of markets has been muted.

As I write this, president Obama has initiated strikes against ISIS in the powder keg that is the Middle East.  ISIS (Islamic State of Iraq and Syria, a former al Qaida group in Iraq that has a reputation for being even more brutal than the main jihad group of inspiration), is  attempting to establish a jihadist state with Sharia law in the region.   Shia Moslems, Christians, and Kurds are all being slaughtered by the Sunni militants who make Saddam Hussein appear tame.  Once again, business as usual for world markets although this is a serious threat to world peace.

In another part of the world, West Africa, the Ebola virus is raging.  Several hundreds have been killed in what is the worst pandemic since the emergence of the virus in the 1970s.  In positive news, an experimental antidote developed here in Canada and up until this week only tested on primates, has shown tremendous promise.  An American doctor inflicted with the virus and given the serum saw a reversal of symptoms within an hour. In medical science, this is nothing short of a miracle and demonstrates mankind’s ability to persevere.

In spite of all the bad news, markets are still near record highs.  ‘The sky is not falling’.

We continue to assist our clients with their investment needs. Those with a longer time horizon are best served in conventional funds, while those with a shorter horizon are best served with segregated funds with income guarantees in place.  Please contact Camlife Financial for your next review.

All the best,


Casey Cameron, BA