Monthly Update - June 2019

July 5, 2019

The Markets

 

Despite the fears, despite the highs, despite the political turmoil, the markets continue to rise! A great month of June but what does that mean for July?

 

Estate Planning

 

I'm sure this already exists somewhere but here is a list of to-do's as you get older...or for your parents as they get older to properly prepare your estate:

 

  • consolidate investment accounts, bank accounts in one place

  • joint ownership where appropriate

  • check your beneficiary designations

  • avoid probate where it makes sense

  • increase your income from your RRIF

  • review your risk tolerance

  • review your will and POA's

  • decide who gets what!

  • Educate your spouse

  • Educate your children

  • Use professionals, accountants, lawyers, financial advisors, insurance advisors

  • Don't delay, do it now!

 

I read recently in an industry magazine that seeing your financial advisor ranks up there with seeing a dentist...I will keep that in mind!

 

Facebook vs. Bitcoin

Facebook Inc. unveiled plans for a new cryptocurrency that the social-media giant hopes will one day trade on a global scale much like the U.S. dollar. Called Libra, the new currency will launch as soon as next year and be what's known as a stablecoin -- a digital currency that's supported by established government-backed currencies and securities. The goal is to avoid massive fluctuations in value that have plagued the likes of Bitcoin.

 

 

And from Bloomberg's Mark Cudmore

The S&P 500 may have just made a fresh record but it won’t survive a U.S. recession. Given the continuing deterioration in the economic data, surging equities strength, on the back of low U.S. yields, looks entirely unjustified, if history is any guide. It's true that lower yields support stock prices. I’ve often argued as such. Unfortunately, that input is entirely subsumed by recessions. The only two economic recessions of this century have coincided with deep bear markets in the S&P 500. And the fact that bond markets are pricing multiple Fed rates cuts doesn’t provide confidence. The evidence from recent history is that Fed rate policy has only marginal impact on the economic cycle, and there are multiple reasons to argue why that impact is even less than normal now - not least due to QE and abundant liquidity. It’s that liquidity which keeps assets elevated for longer, but if the economy and earnings both collapse, then stock prices will be like Wile E. Coyote - losing valuation support, running into a recession, and only then facing gravity.

 

And for gold lovers

Gold has broken out to a six-year high after surging more than 12 percent since the middle of April. Obviously the perma bulls are thrilled, although since they never change their tune on gold in any environment, their views aren't particularly interesting. It's more notable when people change their tune. One such person is Marc Chandler of Bannockburn Global Forex, who recently wrote that he's turned positive on the metal, marking a rare moment in his career. In his view, the Fed's shift to an easing bias plus rising tensions in the Gulf have set bullion up for the perfect combination. He wrote on his blog that gold's technical formation now "projects towards $1700." We'll have Marc on TV during What'd You Miss this afternoon to talk about gold, the dollar (which hasn't rallied with the latest geopolitical stress), and whether this moment really does mark a turning point in some key financial variables.

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