July's newsletter to clients

I hope you have been able to get some time with your family and enjoy the incredible weather we have been having.  Our family was fortunate to spend some time in Stoughton with Kim’s family, took in a Rider game, (in the rain) and camped in Saskatoon for a week. Rest assured, I am still constantly reading and reviewing your portfolio options, even at the campsite!  

June was a small negative month again for most of our portfolios. The TSX(Canada) has retreat to now being up only by about .9% so far this year. The S&P500(USA) is now up 8.85% while Europe continues to lead with a gain of 11.9% this year.  The Canadian dollar slid a bit in June so our foreign holdings had their gains magnified again.  The Greek situation weighed on all markets but that seems to have been sorted out for now. The 12 month rate of return on all our portfolios is still above average and it looks like July will help that back up again. (source:Fidelity Investments:Datastream)

I would like to emphasize that the dropping Canadian dollar is enhancing the current rates of return on our portfolios but we should not expect this to continue indefinitely.  No one is capable of accurately speculating currency movements so there is no point in trying.  We do know that if the US interest rate policy and the Canadian interest rate policy go separate directions, it will force the Canadian dollar lower. We also know that the Canadian dollar is viewed as a “Petro Dollar”, or a currency that is dependent on oil prices. For both of these reasons we do know there will be downward pressure on the Canadian dollar. For how long or how far, that is anyone’s guess.