Corona Virus Cont’d
Empty store shelves, global 1-800 service outages, compelled social distancing, threat of using the emergencies act (an act which replaced the ‘War Measures Act’ in 1988 with which the parliament can authorize the taking of special temporary measures to ensure safety and security during national emergencies.) These are things we have not seen in most of our lifetimes. These impacts beg the question, how does this affect me?
In the short-term, pensions and retirement savings have taken a hit, people have lost jobs, and some people will be infected by the virus and some will have died. In the long-term, we’ll look back and think, bear markets and recessions are inevitable, population fluctuation is inevitable, we will mourn for lost lives, and we should consider ourselves lucky to have lived in a country which handled the situation reasonably well at the time.
We may also consider ourselves lucky that it wasn’t a more deadly virus like SARS or Spanish flu (which, interestingly, did not originate in Spain but was called that because Spain was neutral during WW1 and did not have to lie about death tolls to keep morale up, like other infected countries at the time.) Loss of life is the only permanent risk here, especially for elders and folks with compromised health.
Your money is in very, very good hands here at Business Planners Financial. We and our fund managers at Fidelity, Dynamic, Vanguard and others, are working everyday learning and staying informed so we can assure financial security for our clients. Now isn’t the time to worry or take radical financial action, it’s a time to take care of your health and your family’s health. It’s a time to lean on us with any concerns you have pertaining to your financial well-being. We’re always just a phone call away.
Canada’s COVID-19 Economic Response plan is an extensive one with support for individuals and businesses.
- Support for individuals:
- includes Canada Child Benefit increase by $300 for 2019-2020
- Goods and Services tax credit for low income individuals/couples (one-time ~$400-$600,)
- deferred tax filing deadline to June
- a new Canada Emergency Response Benefit which is basically $2,000/month Employment insurance for people who don’t qualify for employment insurance but are out of work due to COVID-19
- Support for businesses:
- includes extended work-share program (half measure towards lay-off to keep people employed,)
- employee wage subsidy (75% up to $1,375 per employee or $25,000 company max,)
- business credit availability program via BDC & EDC (pertaining mostly to oil and gas, air transportation, exportation and tourism,)
- increased access to credit for farmers,
- insured mortgage purchase program basically means Gov of Canada is buying mortgage backed securities from the banks like in 2008,
- Bank of Canada cut interest rates, lowered domestic stability buffer (meaning 300 billion more lending power between Canada’s large banks,)
- tax deferral to Aug 31 for payments due between March 18th and August 31st,
- Canada Emergency Business Account will allow banks to lend $40k to qualifying businesses which will be guaranteed by the government of Canada and interest free for the first year and subject to some conditions $10k may be forgivable as well.
Zoom Video Communications & Fidelity Global Innovator’s
Zoom Video Communications is a video conferencing application we’ve recently enrolled in to help facilitate non-face-to-face meetings. It allows us to see one and other but also to screen share for when there are documents we’d like to share in the meeting. Zoom has temporarily made its services free so as to turn this pandemic into an opportunity to familiarize the public with their application. One thing we’ve been hearing consistently is that companies will not operate the same after this is said and done.
Protocols will be made, policies put in place and pandemic funds will be held so that if this happens again, companies will be more protected and having those things in place will be looked at more favorably by investors having been through this experience.
Zoom was the 9th largest holding in Fidelity Global Innovators Fund as of Jan 31, 2020 (Out of 56 stocks.) Mark Schmehl, the manager of Global Innovators said Mar 26, 2020 that Zoom “saved his portfolio’s returns” during this bear market helping to create massive outperformance for the fund’s investors. This is a key example of how active managers can find stocks which outperform in tough markets more frequently than they can in simple long bull markets like 2009-2020. See below market returns for Fidelity Global Innovators Fund.
QUOTES - COVID ADDITION :)
We are in the enviable position of having significant fiscal firepower available.
In a sense, it is a revelatory fear as opposed to a newly ignited fear… weren’t you already, like I was, fearful that we were living in an unconscious way?
What we see being successful are the fundamentals of public health...
DISCLAIMER: This newsletter contains general information only and is intended for informational and educational purposes provided to the clients of Anne Marie Dryden & Hans Bischoff. While information contained in this newsletter is believed to be reliable and accurate at the time of printing, Anne Marie Dryden & Hans Bischoff do not guarantee, represent or warrant that the information contained in this newsletter is accurate, complete, reliable, verified or error-free. This newsletter should not be taken or relied upon as providing legal, accounting or tax advice. You should obtain your own personal and independent professional advice, from your lawyer and/or accountant, to take into account your particular circumstances. Commissions, trailing commissions, management fees and expenses all may be associated with ETF & mutual fund investments. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. ETF’s & Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. The views expressed in this message are not necessarily the views of Investia Financial. Exchange traded funds, mutual funds and exempt market products are offered through Investia Financial Services Inc.