Managed Money Reporter Newsletter — Issue 301, September/October 2017

Editors: Carl Spiess & Allan McGlade

Featured Articles

Thanksgiving & Market Update

Carl Spiess

By Carl Spiess, CFP, CIM, FMA, FCSI, MBA

The Spiess McGlade Team hopes that you and your family had a great Thanksgiving. We are certainly grateful for our wonderful relationships with our clients and for being able to work and live in Canada.

The 3rd quarter of 2017 ended up positive, with markets as warm as the first few weeks of fall. Our firm's Portfolio Compass was just published and has the following as the base comment:

"Given we are in the latter stages of an economic recovery we expect the existing fundamental backdrop of relatively strong economic growth, improving inflation, rising interest rates / bond yields, supportive commodity prices and elevated profit margins to persist over the coming year. Combined with growth forecast upgrades for international economies beyond the U.S., this leaves us with an ongoing overweight to cyclical (economically-sensitive) sectors and international markets including Canada. Having experienced double-digit gains over the past year and avoided a 6%+ equity correction for the past 18-months, it would not be surprising to witness a 5%-10% correction in equities at any point in the fourth quarter. However, as the window of negative seasonal patterns closes in October and turns increasingly supportive heading into year-end, we would use any material pullback to put any large cash holdings to work."

What I found most interesting in the report is the global unemployment trend over the last 5 years. To read more about the markets, please see the whole report:


Recommended Reading — Wealth Insights

Scotia Wealth Management's Fall Wealth Insights newsletter has several great articles. The one on the difference between Time and Money Weighted Rates of Return is very helpful. Other topics include:

  • Active management and investment success
  • Enriched Thinking® at work
  • How to determine the value of a business
  • Celebrating Canada's rich history

See Wealth Insights (current issue) for the full articles.


What Does Robo-Advice Mean?

There have been many articles about "Robo-Advice" recently. To my mind, there are two distinct services being discussed under the broad heading of robo-advice. The first is the use of computers to select and trade investments based on a client's specific needs. The second is the use of computers to help advisors efficiently learn about client needs and use that information to make changes to client investments.

Using computers to run a model portfolio for clients isn't really new. There have been asset allocation services run by computer models for over 20 years. These services start with a client questionnaire, that then translates to a specific client risk tolerance. How the resulting portfolio is run was traditionally through a mix of individual stocks or mutual funds. And the mix would change based on market conditions or new input from the client regarding their goals. Now several new entrants to the industry have the investment mix built through a set of exchange traded funds which can help reduce costs. But the basic premise of using an automated methodology to build (and rebalance) a client's portfolio isn't really new. What is different is that because the asset mix could be different for each client, there isn't an ability to compare performance of one robo-advisor vs. another the way there is an ability to compare asset allocation funds or ETFs.

The second use of the term robo-advisor refers to human advisors that use tools to be more efficient. The Spiess McGlade Team has always used our firm's computer systems to keep track of client communication history, risk tolerance, asset mix etc. And these systems continue to improve. ScotiaMcLeod is also piloting a new communication tool which will allow our team to communicate with clients over video and voice chat. Please let us know if you would like to be one of our first clients to test this technology that will help us keep in touch with you more conveniently.


Scotiabank and MLSE

Scotiabank recently announced an expanded partnership with Maple Leafs Sports and Entertainment (MLSE). MLSE owns the Toronto Maple Leafs, the Toronto Raptors, and the Air Canada Centre (ACC). In July 2018, the ACC, which is home to these two teams, will be renamed the Scotiabank Arena.

Scotiabank is excited to continue to be the official sponsor of the Toronto Maple Leafs, as well as a partner of the MLSE Foundation, which supports young athletes (primarily in hockey and basketball) across the country.

The Spiess McGlade Team is extra excited that at the Leaf's home opener on October 7th some our longstanding Scotia Wealth Management clients were honoured as long time season ticket holders.

See the official announcement at:


Profiles in Philanthropy

Many of our clients have used our services to help structure and make their charitable giving tax effective. By donating shares directly to charity from an investment account instead of writing cheques for example, we can help save future tax dollars. Or by using a personal foundation administered by Scotiatrust, we are excited to help clients with what I call "self-directed taxation". The basic idea is that rather than paying all your taxes directly to the government and having them support causes, you make charitable donations (which give you a tax credit) and you support the worthy causes you like directly.

Of course many people support charities not only with money but with their time and effort. I was proud to be featured last month by one of the charities I volunteer at - The McMichael Canadian Art Collection:

I am also pleased to be a leader within ScotiaMcLeod, helping to administer our own internal Share the Wealth campaign. I was recently interviewed about the growth we have seen amongst our colleagues and the charity work being done at our firm. See the attached article for more about the work I'm proud to say that ScotiaMcLeod does in our communities. Read more about ScotiaMcLeod's charitable foundation at:

Please reach out to me directly if you would like to talk about charitable giving strategies and the best way to support the causes that are important to you!


Is being named an Executor an Honour?

Initially it might seem like an honour to be named as an executor of a Will. However, there are many legal and practical matters to be considered before appointing someone as an executor, or accepting that responsibility. Our colleagues at Scotiatrust are specialists in the field and we are pleased to share some insights. Please see the articles, below for information on executor duties and contact us if you have questions about your estate planning.


Recommended Link of the Month

This site isn't finance related, but because of my interest in art, this film and site really spoke to me. Going to northern Ontario to find the sites that the group of seven painted at is very exciting. The producers of the film "Painted Land" offer a site where you can compare the original paintings with more recent photos.



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