High Rock-sponsored athlete (and old family friend, and inspiration to my youngest son), Darren Gardner, put in a fabulous race on the Alpine World Cup circuit in Rogla, Slovenia last weekend. This coming weekend is another World Cup race in Bulgaria.
Darren came in 14th at Rogla and is quite happy with his progression during the season so far. As we head into the 2018 Winter Games in Korea, his focus is singular....the podium. At this stage, he is the number 1 Canadian on the World Cup circuit, taking over the mantle form Jasey Jay Anderson, who won Gold in the Parallel Giant Slalom in the 2010 Vancouver Olympics. Next year is Darren's turn.
High Rock is proud to help Darren achieve his goals, and that of the Canadian Olympic Committee and Own The Podium. At this stage, and with Darren's performance so far, he has been able to secure a snick more funding from Sport Canada (but I can guarantee it ain't enough...so if you love snowboarding and want to help a world class athlete and Olympic Medal hopeful, contact Darren at: darrengardner.ca/#feed)
Check out Darren's website (above) for some cool pictures of him ripping it up. Here is one for now...need a well-tuned board to do that. Not even sure why he waxes the base.
And this is really friggin hard, let me tell you. In fact, my periodontist in Burlington just asked me today if I do this sport or have tried it. The answer was "no and yes". Tried once and concussed myself for four days. Just an avid spectator and supporter.
Something I have been looking at since the early 90's has been the "velocity of money" and the "multiplier effect". The most basic definition of the velocity of money is the number of times $1.00 is spent to buy goods and services per unit of time. Economic theory claims the higher the number, the stronger and more productive the economy. Importantly, a higher velocity of money usually means that inflation should be higher too.
I will refrain myself from going into a lot of detail here but for the past 8yrs, folks (monetarists) have been saying that because central banks have increased the money supply, inflation would resurrect it's ugly head. Well, clearly, that has not happened. Why not? Because of two main reasons:
Let's look at a chart on this. Below is the US 30yr Treasury Bond in yellow dating back 25yrs. The blue line is just a simple trend line that I drew in (this is just based off of closing levels but over 25yrs that is probably ok). The white line is the velocity of money. And the green line is the St Louis' Fed's Multiplier. Pretty high correlation between the three isn't it?
Almost makes me want to go and buy back some of the 30yr bonds we sold in Sept.
I wrote at the beginning of December on the tightening of monetary conditions in the USA. See here: highrockcapital.ca/pauls-blog/macro-views-part-iii-usa
The basic premise being that the US$ has gone up so much, so fast, as did US interest rates (as seen through government bonds). Both of these moving as much and as quickly as they did, had the effect of tightening up monetary conditions for businesses, exporters, consumers...everyone. Heck, The Federal Reserve Board may not need to raise rates as much as they thought because the market tightened up the system for them.
Today, we saw New Home Sales come out in the USA for the month of December. Wall Street economists were expecting to see 588,000 new homes sold. Unfortunately, the number came in at only 536,000 new homes sold. Fair bit below expectations. (The beauty of being an Economist/Phd is that you can be called a Doctor but if you are wrong, no one dies, and you go for lunch the same as you would have if you were right that day).
Why the miss on new home sales? I wonder if it has something to do with interest rates, which mortgage rates are based off of, having gone up so much, so fast the past three months?
Here is a chart plotting New Home Sales (white line and RHS) vs the 30yr US Fixed Rate Mortgage (yellow line and LHS). Note the red arrow on the left shows how Mortgage Rates rose in mid-2013 and the green arrow shows how New Home Sales dropped shortly thereafter. Cause and Effect.
And this past few months, you can see how Mortgage Rates climbed as shown by the dotted blue line on the far right. And the effect on New Home Sales which dropped just in December alone as shown by the dotted orange line.
Last night, a client friend of mine sent me a link from a website called "Wealth Professional". The client friend said that they just published something called the "Top 50 Advisors 2017". My immediate reaction on what this article/ranking was all about was not positive and once I read the article, I was indeed spot-on. That is to say, I bet they rank these Top 50 on what size of Assets Under Management (AUM) they have, what kind of AUM growth they have had and/or how much revenue they have squeezed out of their clients. Without even reading it, I was also saying to my client friend that I bet they mention nothing about: 1) who has the strongest risk-adjusted returns in their client portfolios and 2) who has cut the all-in costs their clients pay.
Sure enough, I was correct on all levels. Have a read on how they rank to Top 50: www.wealthprofessional.ca/rankings/top-50-advisors-2017/
Is this for real?
From the Article:
"We asked which individuals had distinguished themselves in 2016, either by increasing AUM, bringing in new clients, boosting revenue or perhaps another variable unique to that particular advisor."
"This year's Top 50 had a combined AUM of $8.8 billion, and the top 10 alone has more than $3.5 billion AUM. That makes it clear that while the advisor business is undoubtedly changing, investors across Canada are still showing their faith and entrusting their wealth management to the professionals".
Therein lies the problem with the Wealth Management business, in general. And to be sure, there are some excellent Advisors out there (some are friends of mine and I know they care more about their clients than just how much AUM and Revenue they are making for themselves and their firm).
High Rock would never make this list for several reasons:
How do I think they should measure the Top 50 Advisors? As I told my client friend last night:
Shouldn't those last two things matter most when ranking Advisors? Again, therein lies the problem with the Wealth Management business, in general. Seems the banks and dealers are more interested in increasing overall revenue (driven by Advisors gathering AUM and further boosting revenue from that AUM) than they are with the actual client's financial health.
In fact, while watching the Aussie Open last night, I saw this great Questrade ad on tv. A 30-something woman and her husband are sitting across the desk from some male Advisor and she talks about how all these fees add up over time and how it digs into their net worth. The Advisor shrugs. Spot-on.
There is an alternative.
Scott and I were having a conversation yesterday about the markets, the new Trump Administration and how all of this might affect our collective portfolios. We both noticed something interesting happened yesterday and came to the same conclusion.
Now I preface my comments when I talk about Trump and his new Administration...love him or hate him, what he does or doesn't do will affect our portfolios, so we need to pay attention.
In my view, yesterday was a particularly telling day for the markets. Trump hosted about 18 top CEO's (Dow, Tesla/SpaceX, Ford, Lockheed Martin etc) at the White House for morning meetings as a group. Some of this was, in typical Trump fashion, televised. Again, like him or hate him, the response from the CEO's exiting the White House was quite unreal. They all stood by a microphone and said that the new Administration was very engaged. Without going into too much detail, it is fair to say that this should have been taken as positive for the market...a bullish sign.
But it wasn't. At 12noon, as these CEO's were standing in front of the microphone going on about how pro-business the new Administration would be, the Dow was close to -100 points. Not a good sign. When a market can't rise on bullish (positive) news, it is not a good sign.
Maybe one reason it didn't seem to rise is a reason we gave last week - Short Interest is too low (IE, everyone is already too long) so there is a lack of shorts that are forced to come in to cover their positions and prompt the market higher, even on seemingly good news. Now it has rallied back up today, to be fair. Maybe it took the market a while to see the positiveness of these CEO's. Regardless, let's look at the Short Interest again in the NYSE stocks:
Hard for a market to go up when participants who were short have covered so much lately. The theory being, who else is willing to buy at this level? It's usually a very positive sign when short interest is high...at some point they are forced buyers as the market moves higher. Absent big shorts, there is one less group of buyers. Look at what happened the past few months...stocks higher and short interest lower...were shorts part of the reason for the rally? Partially, yes. They always are.
And another interesting thing happened yesterday. No, there was not another march by a gazillion women (that I know of). The US Treasury Bond Market actually rallied (bond prices up and yields down). Again, the news coming out of the CEO meeting should have been bad, not good, for bonds (wage inflation, price inflation etc). What gives? 10yr US Treasury Bond were about 7bps lower yesterday - a decent move. To be fair, they are 4bps higher today. Nonetheless, there might be a similar explanation about why bonds did not react they way we thought they would yesterday. How about there is record short interest by speculators (hedge funds) in the US Treasury Bond Market. And when I say "record", I mean RECORD...that chart goes back an awfully long way (to 1992). Have a look:
So if every hedge fund in the world is short government bonds, at an all-time record level, can bond prices really weaken much further? Perhaps but it was interesting that they didn't yesterday.
To conclude, we think equities are a bit overbought at these levels and are due for a retracement to attract new, re-energized buyers (see blog from last week: highrockcapital.ca/pauls-blog/checking-out-the-charts). And, similarly, but opposite in direction, we think the bond market is oversold and due for a correction (rates lower). Both of these are called "Crowded Trades". That is to say, Stocks are crowded on the "long side" (too many people are invested or long stocks for them to go higher) and Bonds are crowded on the "short side" (too many shorts for them to go lower in price or higher in yield).
When a market doesn't respond as we think it should, it tells you it is overbought/oversold and, at a minimum, due for a consolidation, if not a correction.
This and more at 4:15pm on our Weekly Webinar. If you have the log-in details already, hop on and participate, if not, contact Bianca (email@example.com) and she will provide them to you.
Two blogs in one day... this one will be short and to the point.
I will write it now because, unfortunately, I have to go to Burlington tomorrow to attend the funeral of the husband of a cousin of mine I was pretty close to growing up. 58yr old guy who was fit and vibrant, taken by cancer after a long, hard battle. Cancer sucks.
Anyway, as some of you know, I spend most of my time doing fundamental research (financial statement analysis, building models etc) but I do glance at charts here and there because it takes so little time to do so and can sometimes offer insight on entry and exit points.
Today I glanced at the Dow Industrial Average and the S&P 500. What I was looking for specifically was "Retracements" since the Trump Rally in early Nov. What are retracements? Typically they look at how much a stock or index will retrace over an entire move. They are usually portrayed as Fibonacci (Italian mathematician) numbers which show sequences...yada yada yada (not to get too in depth here). Basically, retracements happen, like Fibonacci sequences, quite naturally, as buying (or selling) exhaustion occurs. Look at the chart below...looks like buyers are exhausted and don't want to buy any more. Maybe they do but at lower prices. Enter retracements to bring in new and rejuvenated buyers. Nothing goes straight up.
A picture is worth a thousand words:
Basically we look at the low on the Dow on Nov 7th at 17,883 and the high all through mid Dec and into early Jan at just shy of 20,000 (19,987). This represents the entire move. Now we take Fibonacci retracements and look at what levels the market should/could sell off to.
A typical retracement would be to the 38.2% level or 19,183 area (top green line). That would be a weakish retracement, which is to say, the market could re-energize and move to new highs. This retracement would represent about a 2.8% decline from today's close.
A 50% retracement to 18,935 (blue line in the middle) would be a moderate retracement. This retracement would represent about a 4% decline from today's close. Starting to matter a bit now.
A 61.8% retracement to 18,687 (lower green line) would be seen as a strong retracement or a bearish move that might leave selling exhausted for the time being but then, after a short run up, the selling pressure would resume again. This retracement would represent a 5.3% decline from today's close...that would be a nice entry point.
All of this voodoo witch craft is not an exact science but it can be helpful. I have found over a long career of investing that markets that are set up like this are classic retracement opportunities.
At this stage, I would bet (and we are) that we gravitate to 19,183 area at a minimum (the first stopping point being a 38.2% retracement). Let's see if I am right.
I recently met with a prospective client who asked me this question. It is not the first time I have been asked it and, although I address it to those prospective clients who ask, I thought I would also address it in a blog. The answer is, unequivocally, "No".
Let me start by explaining how, logistically, we manage money at High Rock.
First, in our Institutional division, we manage two "funds" for Scotiabank. These funds are what are called prospectus-based, which means the prospectus was written by lawyers, went back and forth with the lawyers at the Ontario Securities Commission (OSC) until they got comfortable and blessed it for sale to "retail" accounts through the the Investment Advisor network. This blessing by the OSC is meant to protect retail investors (I won't opine here if all blessings achieve their stated goals, or not). So when a Fund Manager (Scotiabank in our case) manages a fund, they are required to follow lots of rules and requirements (that all add costs to the fund that then get passed on to the retail buyer who bought it from their Investment Advisor) such as hiring a large accounting firm to perform an annual audit, hiring an Independent Review Committee to ensure the fund is operating according to it's stated mandate, operations, custody etc. To operate a fund is somewhat expensive and cumbersome. So the two funds we manage for Scotiabank operate where Scotiabank is the Fund Manager and High Rock is the Portfolio Manage/Sub-advisor. Scotiabank handles all of the finance, operations, etc while High Rock handles the daily portfolio management of the funds.
Now compare that to High Rock's Private Client division where we manage all Private Client accounts on what is called a Separately Managed Account (SMA) basis. Managing money on an SMA basis means that we don't manage private client money in "pooled funds" where clients own "units" in the pool or fund. Effectively what account management on an SMA basis means is:
These account opening docs are then sent to our custodian, Raymond James Correspondent Services (RJCS). We need a Custodian to hold the securities, settle trades, produce quarterly and year-end reports and tax-related docs. We chose to use RJCS for several reasons but mainly due to superior technology, cybersecurity and financial health. RJCS is also a member of the Canadian Investor Protection Fund (CIPF) which insures each client account for up to $1mm if something bad happens to the custodian (the CIPF insurance is the same whether you hold your account at RBC, National Bank or Raymond James...bigger isn't always better).
While those accounts are being opened up at RJCS, Bianca will then ask you to give us a ton of personal and financial information about your household. We need to accumulate all of this for a few reasons. Firstly, this information helps us know more about your current situation and your goals which helps us ascertain the risk and return you are willing and, perhaps, need to take to meet your goals. Moreover, we are required by our securities regulators (OSC and the regulators of BC, Alta, and Sask) to collect this data at our initial discussion but then to also keep it updated during the semi-annual reviews we have with all of our clients. At High Rock, we go one step further when we collect information. Bianca, who has achieved her Certified Financial Planning (CFP) designation, performs an in-depth Wealth Forecast. This Wealth Forecast is a key determinant in how we structure your portfolio and it too is an ongoing process...because things change. If you have never had a Wealth Forecast done, I strongly encourage you to do so.
Importantly, this personal information is kept securely at both RJCS and at High Rock. At High Rock we keep one hard copy in the office locked in a cabinet and any other client-sensitive documents are stored in the cloud with two-stage encrypted cybersecurity protection. Also important to note that we do not keep SIN's electronically (they are held at RJCS in the account opening docs and at High Rock in the locked cabinet).
As we gather all of this information from you, we put it into various docs and have you sign them. Here is a brief description of the docs that we retain at High Rock:
The information gathering/collecting is a dynamic process because if something changes in your personal situation, we will need to change the way we manage your money.
So the key here is that, once you decide to join High Rock's Private Client division, it is your account, your securities, your cash at all times. High Rock does not directly handle cash, securities, etc. When you deposit money into your account, you will make a cheque payable to Raymond James, not High Rock.
If ever (it hasn't happened yet, and I don't think it ever will) you decide that we are not doing what we said we were going to do or, for whatever reason, you don't want High Rock to manage your money any longer, then you send Scott, Bianca or I an email (or phone) stating not to do any further trades in your account (this effectively breaks the IMA we had in place). Then you can do whatever you want with your account...you can liquidate the securities on your own, you can transfer it to an Investment Advisor at any bank/dealer, you can transfer it to an online broker...whatever you want...it's all yours!
No "Madoff's" happening here.
What has been driving the S+P higher the past year is probably due to a few different line items. But today, I will just show one...The "short interest" on the New York Stock Exchange (NYSE).
First of all, let me explain short interest. "Going short" a stock (or bond), involves a view from the investor that the particular security in question is "overvalued". The investor can they take advantage of their view by borrowing the stock in advance from a bank/dealer/securities lender. He/she then sells the stock short...IE...they call up a dealer and, for a stock, must state to the dealer that they are "selling the stock short" (for a bond, the investor does not have to tell the dealer they are selling short).
So effectively what the short selling investor has done is, borrowed the stock and sold it short in the open market with the hopes that the stock will drop in value over the ensuing day/weeks/months (timeline determined by the investor). If the stock price does drop, then the investor can go in and buy it back at the lower price. The investor would then garner a profit between what he sold it short at and what he bought it back at (less the cost to borrow the stock including any potential dividends that he/she would have been responsible for paying while they were short). Ex - borrowing a stock from a securities lender, selling it short at $100, waiting a month, and then buying it back at $50 to net (before fees/costs) $50 profit. Sounds really easy, doesn't it?
Short-selling is typically seen as a "hedge fund" tool. At High Rock, one of the funds we managed for Scotiabank had the ability to put on short selling trades and I spent my entire 17yrs at Merrill Lynch running portfolios that were, at all times,both "long" and simultaneously "short"..(it was a huge part of what we did).
From a macro perspective, it is interesting to look at the New York Stock Exchange (NYSE) Short Interest. The theory goes that when short interest in a market (like the NYSE) is very high, it means that there might be a lot of frustrated and nervous people out there who are short and if the market doesn't sell off quickly, they are forced to "cover" (come into the market and cover or buy their shorts back because if the market keeps going higher, they will lose money by being short).
Now we will look a the chart of the S+P 500 along with the NYSE Short Interest. Here is is going back 9 years:
The bold yellow line is the S+P and the white line is the NYSE Short Interest (SI). As you can see, from about the beginning of 2013, both the S+P and the NYSE SI climbed for about 3 years and peaked in 2015. However, what happened at the end of 2015 is interesting. The S+P stopped moving higher and spent 2015 and 2016 in a volatile pattern with two big moves down and two big moves up. The NYSE SI really ramped up (that being that short sellers got very "bearish" or negative as you can see the white line moved significantly higher). But for the short sellers, stocks didn't really sell off (remember the Brexit sell off was short and the Trump sell off was so short, it didn't even make it to the next morning after the election?).
So what do you do as a short seller when you don't get satisfaction? You start to cover/buy back all of your shorts. And what effect does all this short-covering have on the overall market? Well it brings in more buyers which...drives it higher. So look as what happened in 2016-- As the NYSE SI dropped (short covering came in), the S+P rose (more buyers from short-covering).
Where does this leave us today? At High Rock, we are somewhat contrarian by nature. When we see that NYSE SI is at a 2yr low, it tells us that a massive amount of short covering has already come thru the market and leaves fewer real buyers left. This means that part of the reason the S+P popped up lately was most certainly due to short covering.
Who will buy now? Looks like short coverers are...covered.
We haven't shown these charts for quite a while, so here they are today.
As I have said before, when one company acquires another company, they don't look at the target company on a Price (P) to Earnings (E) (PE) basis. Instead, the metric looked at for an entire business valuation is the Enterprise Value (EV) to Ebitda (EV/Ebitda).
EV includes the price the target company's stock is trading at (the market capitalization), plus all the debt and less the cash (if any) on the balance sheet. The difference between looking at EV vs just the Price of a company's stock is obviously that EV includes the debt (which is part of the capitalization of the company) but also deducts the cash (because cash on the balance sheet does not get a "multiple" put on it as cash doesn't help drive cash flow). So, to conclude the difference in the numerator of the formula, EV is a more all-encompassing metric than Price (P). Can you imagine buying a business and just looking at the Price you are paying for their stock, even though you have to buy the Debt too!?! Might make sense to look at how much debt that company has.
On the denominator, Earnings (E) in the PE multiple is the "bottom-line" on the Income Statement. It includes all kinds of things like non-cash expenses like depreciation and amortization etc. It can also be highly manipulated. Ebitda on the other hand, is seen more as a pure measurement of the company's actual cash flow. It stands for Earnings before Interest Expense, Taxes and Depreciation/Amortization. Ebitda can also be manipulated so it pays to reverse-engineer the company's own calculations if need be.
Armed with the "real" valuation metric for looking at the market, let's check two charts and see where we are at.
The first chart is the EV/Ebitda of the S&P 500 going back 30 years (as far back as Bloomberg calculates). You will note the Current EV/Ebitda (white arrow) is at 13.2x. That is to say, the market is currently pricing a valuation today of 13.2x the last twelve months of Ebitda. Looks a bit stout doesn't it, given we were only higher than this in 1999 before the Tech Bubble burst? The red arrow shows the forward multiple of 10.5x or the Forward EV/Ebitda for the next twelve months but the graph doesn't help us much on this metric historically as it doesn't graph the multiple on a forward basis.
And, just for fun, let's look at the way retail investors might look at the Ebitda metric: on a Price to Ebitda basis (like PE but using Ebitda instead of Earnings). (Note: this metric excludes the debt of the S&P 500 companies). As you can see, this metric has never been higher than it is today. Remember, this excludes the debt on the balance sheet of those S&P 500 companies...really just the price of the stock.
What you should notice between the two charts is that, we have isolated the debt and excluded it from the second chart. So the EV is not at an all-time high multiple in the first chart but the P is in the second chart. Conclusion: it is the P (the stock price) that is driving overvaluation rather than the Debt (which is absent in the second chart).
A word about "multiples", whether you look at the PE or the EV/Ebitda: 1) higher growth companies typically trade at higher multiples, because of their growth prospects, and buyers (acquirers, both retail investors and strategic buyers) are willing to pay a higher multiple for that growth and 2) when multiples are stretched/high, one of two things has to happen: a) the Ebitda (earnings/cash flows) has to actually come to fruition and if the Ebitda doesn't come to fruition like the market hopes/thinks, then b) the EV or P will need to sell off to bring the multiple back in-line with a more average multiple (mean reversion).
The take-away is multiple expansion can only go on for so long without Earnings/Ebitda coming to fruition to justify the multiple. As always, time will tell but till then, we will be more cautious on the generic market.
Source: Bloomberg, January 16, 2017
It is the time of year on Bay St where Managers constantly ask each other, "how did the year go?". In essence, "what was your return for the year?". This process starts during the Christmas cocktail season and continues for the first few weeks of January.
I have had a bee in my bonnet over this for quite some time because it is not enough to ask "what were you up on the year?" without asking "how much risk did you take to get those returns?". Somehow, most people forget about the risk they took to get those returns, especially during a good year like this past year was for the TSX (+21% on a total return basis...but also note that over the past two years the TSX shows only a -3.5% total return per annum calculated on a daily basis as per Bloomberg). I can't tell you how many times I have heard friends, family, prospective clients say to me "my broker does ok for me. They make me money". That is the most insane way to look at investing. They do "ok" for you and they "make you money"? They make you money vs what and what type of risk are they taking in your portfolio?? These are two very important questions to answer.
At High Rock we focus on not only returns, but how much risk we are taking to produce those returns or, the "return per unit of risk". We call these "Risk-Adjusted Returns" where we calculate the total return for the period and the standard deviation of those returns over that same period.
The other key metric is what sort of benchmark you measure yourself against. If you measure yourself solely against the TSX (that is, you only own TSX companies and no fixed income, no foreign stocks and no foreign exchange..sounds like a hedge fund doesn't it? But to be sure, most clients who transfer in to High Rock are 100% invested in Canadian stocks...Zero diversification) then fine, the TSX is your benchmark. And the value-add from your Advisor should be measured against the TSX. So it would be easy each year to see how they have done for you by simply looking at the TSX. If they outperform the TSX year-in and year-out, then they are doing a great job for you (although you would still own a very undiversified portfolio and sh$% happens...nothing goes up forever).
So how did High Rock do in 2016?
Scott showed this on our webinar this past Tuesday but I will show it again. We are only allowed to show the performance of an Actual High Rock Private Client (HR PC or HRCMI Private Client). We chose this client because they have been with us since inception at April 1, 2015 and they are fairly representative of most of our clients (more later). We then compare their returns (before fees so we are comparing apples-to-apples) with the various Indices.
The first chart shows just how diversified our High Rock Models are. We do not manage just TSX stocks. It is diversified across asset class, geography and industry sector. Comparing this diversification to the TSX benchmark is not a fair comparison. There is always a home country bias to invest more than the global market allocates to your home market. For instance, Canada is only about 3% weight in the global Index for both Stocks and Bonds. We obviously have more than 3% Canadian exposure in our models but we are diversified enough globally to use the ACWI (ETF - exchange traded fund) as our Equity benchmark.
The second chart we will show is one we use frequently....Risk-Adjusted Returns. There is a fair bit of math behind here in an excel file but basically it shows the annual return up the left-hand side and the standard deviation (a measure of risk) along the bottom. The top-left quadrant represents the best risk-adjusted returns (higher return and lower risk). Now note that our Actual HR PC (gross of fees) is a fair bit above our benchmark 60/40 (60% of ACWI/40% of XBB - Canadian Bond ETF) with a higher return and lower risk. A good thing. Importantly, note the green triangle top-centre is the TSX and note the orange dot above our Actual HR PC which is the BAML C$ High Yield Index. As you can see, C$ HY had a very good year and our clients had an overweight exposure to this asset class.
Now putting it all together, we will look at the "Return per unit of Risk". This is the key. No more, "my broker made me money" comments, please! Has your broker ever done the math and showed you your return per unit of risk that you took? Here are all the above Indices and our Actual HR PC:
So here are a few things to note in the third graph:
Now that I have that off my chest, there are less bees in my bonnet.
Now I won't show you the math on a risk-adjusted basis but I will give you a few more select actual client returns for 2016 (those who were with us the entire year)...my household, my three son's RESP, our lowest client return and our highest client return. These are not meant to be representative (our Actuall HR PC in the above body is more representative of our client base) but rather to show you that each client has different needs and requirements and also, as you will see, that we try to find solutions for everyone:
A word on performance...although we manage our client portfolios to our three models, your performance will vary depedning on when you joined High Rock. It rips me apart to think that people who joined part way thru the year missed out on some great opportunities that we were able to take advantage of in the earlier part of the year when the market was getting hit hard. What is important to note is that the idea generation, the research and the work doesn't stop...it keeps going year after year.
If you feel like you would like to change your risk parameters and exposure to our various Models, contact Scott and we will see if it is appropriate for you. Remember, we do a Wealth Forecast for each client and our goal is to meet your future objectives by taking the least amount of market risk. Sounds simple, eh?
Another important word on performance: Past performance is by no means an indication, promise or guarantee of future performance.
Returns are calculated on an Internal Rate of Return basis from December 31, 2015 to December 31, 2016 on a monthly basis.