I hope you and your family are keeping well during the current state of emergency related to the coronavirus pandemic. I am writing to you again this week to discuss the recent happenings in and around markets.
Easter weekend means different things to all of us, and 2020 will be one we never forget. For some, it’s a long weekend, for others its filled with prayer, and for almost all of us its filled with family and friends. This year it probably felt very different for you. I know for Tracy and I we missed getting together and seeing parents, and our children missed seeing their grandparents and cousins. We will never forget this Easter weekend!
As we continue to see financial markets react to the ongoing coronavirus (COVID-19) outbreak and its related effects, I am writing to you with an update on the latest developments and how to view your long-term cash flow producing investment plan as a result.
You hold a wonderful investment in your portfolio called the Dynamic Equity Income fund, to which we wanted to highlight its cash flow, protection and results over the market volatility we have recently experienced. As you may know, it pays you a monthly distribution and this monthly cash flow has never changed over the life of the fund, creating for you an internal rate of return that is reliable, predictable and especially comforting when the markets are experiencing a downdraft.
As you know social distancing is something that is highly promoted right now and therefore our office will be doing its part by postponing all our in-person meetings for the next three weeks. We are committed to keeping you informed and as such will be available by phone, email, or video conferencing should you wish to reach out to us. In the meantime, I will continue to send out weekly information pieces highlighting such topics as: your holdings, general market information, office news and our thoughts as this unfolds.
Given the recent market slide and volatility, we thought it prudent to pass along a few Informative pieces that you may want to review to give a perspective on the current Market situation.
On March 18, 2020 a set of economic measures, as part of the Government of Canada’s Covid-19 Economic Response Plan, were announced. The statement included proposed changes to the calculation of the 2020 required minimum withdrawal for registered retirement income funds (RRIF/LIF) by 25% for 2020. For example, if your 2020 minimum RRIF payment is $10,000 and you choose to reduce the payment for this year, your new minimum payment will amount to $7,500.
I wanted to touch base on a few topics of interest and provide everyone with an update on the transition. The effort my office has shown over the past 3 months has been unparalleled. The trials and tribulations that come with such a change have been overcome and I am excited with what the future holds for all of us. A few Items to bring to your attention:
As you may know, you hold the Dynamic Alternative Yield Fund (DAYF) within your portfolio. Please find below an update on its performance you have enjoyed, with an impressive return of 25.2% in 20191. Many Investors are conditioned to measure performance of their investments on an annual basis. However, when we construct portfolios we take a longer view than just one year (a Warren Buffett Principle), and in doing so look for outperformance over several business and economic cycles.
I hope everyone had a relaxing, enjoyable holiday season. So much has changed due to COVID-19, it’s hard to know where to start taking stock of the year or begin thinking ahead to the next one. 2020 was a year of surprises. There was the speed at which the pandemic escalated, the severity of the lockdowns, the size of the global government stimulus measures, and the magnitude of the equity market decline and rebound. Out of necessity, your priorities may have shifted.
