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Around the World in 100 Words, September, 2019: Week 36

Well summer 2019 is officially in the record books and hope everyone had a good one. Some drama in the markets driven by the US-China trading relationship produced some big days -both up and down- but for the year, our portfolios are performing well for you. Equities have been the big driver year-to-date, with bonds providing stability when needed. Our global focus has been a good call, as Canadian markets (gold excepted) have lagged considerably.

The question is what comes next? A simple question that defies an easy answer. Interest rates remain low, jobs are plentiful, consumer consumption is strong and business confidence is reasonably good. On the other hand, Trump and Xi are going toe-to-toe on tariffs and the rest of the global economy -Canada included, is caught in the middle. This situation is unlikely to resolve itself anytime soon.

Momentum is a key to what comes next, and while there is considerable positive momentum still, without question we are closer to the next recession than the last one. But we don’t see recession in 2019, though 2020 is another matter. Typically US Presidential election years are good ones for the markets, but we don’t have a typical US President right now.

I will be reviewing your portfolios closely as we approach the end of the 3rd fiscal quarter and making some calls on whether we need to be more defensive. This will be a data-driven call, based on what happens in September.

As always, I look forward to speaking with you, and I hope you didn’t think of your portfolios once all summer. We only get so many of these months over our lifetimes, and what matters most is spending these halcyon days with family and friends. The value of that is priceless.