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April Monthly Update, Covid Update 7 and a Questrade/Wealthsimple Analysis from Fidelity

Hello everyone, I hope you are all doing well. Here is the latest on the crisis and an April market update. April was a good recovery month but don't get too comfortable there will be more volatility to come! The S&P 500 is just about where it was 12 months ago! Mortgage Relief The Canadian Bankers Association recently announced that over 500,000 homeowners have inquired about mortgage relief. I was taught long ago to get credit when you don't need it because when you do need it you can't get it! One easy solution to this problem is a line of credit on your home. Never has to be used but in the event that it is needed it can play an important role. Manulife Bank offers the all in one Manulife ONE account that includes a mortgage, bank account and line of credit all built into one. And best of all, as detailed below, no payments are required! You don’t have a minimum monthly payment As long as you have borrowing room in your Manulife One account, you can temporarily stop making deposits to your account.  You can also use the borrowing room in your Manulife One Main Account to help cover expenses until things return to normal.  And, because the Manulife One Base Rate has gone down, you’ll be paying less interest than you have in the recent past. If you have a fixed-rate sub-account within your Manulife-One account Fixed-rate sub-accounts have required payments, just like a traditional mortgage.  Here again, the borrowing room in your Manulife One Main Account can help.  Since your sub-account payment is coming from your Main Account, you can continue to let it do so as long as you have borrowing room available. If you’re near your borrowing limit While your Manulife One account provides you with significant flexibility to adapt to the current situation, you may find yourself at or near your borrowing limit.  If you find yourself in this situation, we’re here to help. How to check your borrowing room If you’re not sure how much borrowing room you have left – simply check your latest monthly statement, or check it online or through the Manulife Bank mobile app. BREAKING NEWS The U.S. economy shrank at a 4.8% annual rate in the first quarter, its biggest contraction since the recession in 2008. Worse is to come. Wednesday, April 29, 2020 8:47 AM EST Even so, most of the quarter came before the coronavirus pandemic forced widespread shutdowns and layoffs. Economists expect figures from the current quarter to show G.D.P. contracting at an annual rate of 30 percent or more. Something bizarre happened in the markets: The price of a barrel of oil went negative. Monday, April 20, 2020 2:48 PM EST Oil prices tumbled as the economic crisis set off by the coronavirus pandemic continued to destroy demand for energy, and as concerns grew that storage tanks in the United States were near capacity and unable to hold all the unused crude. Jobless claims now top more than 30 million in the U.S. The number swelled again as 3.8 million Americans filed unemployment claims last week, despite trillions of dollars in stimulus and relief spending. But economists say the job losses may be far worse than government tallies indicate, because the flood of unemployment claims is overwhelming many state agencies. Valuation Earnings season is underway. As the Covid-19 lockdowns only began in earnest at the end of the first quarter, the full impact won't be apparent. However, if we look at prospective earnings multiples, comparing the S&P 500’s level to Bloomberg’s survey of estimated earnings for the next year, we see this amazing picture:

Have kids under 12? Kids grant! If you know anyone that has children under 12 years of age  in Ontario they can get $200 from the gov't for each child! Own A Business? CERB Small Business Grant The CERB will now provide up to $40,000 in government-guaranteed loans to businesses that had payrolls last year between $20,000 and $1.5 million. It previously offered loans to businesses with a narrower range of payrolls, between $50,000 and $1 million. Updated Portfolio Results - Questrade and Wealthsimple - Are the lower fees worth it? Analysis from Fidelity The Questrade website is reporting performance GROSS of fees so I have used Series F returns for Fidelity which are net of Fidelity’s series F MER, admin and HST.  Please let that sink in - GROSS of fees, no other fund company is allowed to do that - why can Questrade? Yes it’s true - Questrade’s prices are considerably lower than Fidelity’s. But in every single case, you would have more money in your pocket today if you had simply invested with Fidelity’s Portfolios instead of Questrade’s (and that’s ignoring the fact that you could have also owned satellite positions in Global InnovatorsUS Focused Stock, etc). In every single case, your portfolio would have lost less money (or actually made money). And a sad note for animal lovers and the meat industry in the US.

So should schools stay open or closed?

How did a 14-year-old girl’s science project play into this history? She was fascinated by social networks and how they worked. And her dad was this super-advanced scientist in New Mexico. She did a class project in which she built a computer model of social networks at her Albuquerque high school. Her dad piggybacked on her work, and together they looked at what effect breaking up school networks would have on knocking down a contagious disease. The outcome was startling. By closing the schools in a hypothetical town of 10,000 people, only 500 people got sick. If they remained open, half of the population would be infected.


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