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Can The '20s Be As Good As The '10s?


Welcome to the new 20's

For many people the last decade was good to them, even if it didn't always feel like it was going to be. At the beginning of the decade the financial world was full of sceptics about whether we had completely exited the financial crisis. Even 5 years into the decade people began to call for the next recession and likewise those calls continue today especially with the trade war still looming over our heads.

But despite these negative calls, the stock markets performed well as we have seen new record highs achieved in the last year and all things considered the economy is performing reasonably well. When you hit milestone years it can be fun to look back on what were the top performing stocks over the period of time so let me highlight just a few for you from the Canadian market:

*Dollarama - 1,030% 10 year return – If you had invested $10,000 10 years ago it would now be worth $113,000

*Air Canada – 3,680% 10 year return – If you had invested $10,000 10 years ago it would now be worth $378,000

*Boyd Group Income Fund – 4,230% 10 year return – If you had invested $10,000 10 years ago it would be worth $433,000 today

And the top performing company for the last 10 years was:

*Kirkland Lake Gold – 6,730% 10 year return – If you had invested $10,000 10 years ago it would be worth $683,000

First Thing is First

Don't feel bad if you didn't own any of these companies for the last 10 years. This certainly doesn't mean your portfolio didn't do well if you didn't own them because there were lots of opportunities out there. Even if you did own them, did you hang on to them for the full 10 years? Likely not and therefore you likely didn't achieve the full potential of these companies.

Personally, I think it is fun to look back on these numbers because there are always companies on the list that I would have never thought would be there. Everyone expects to see highflyers like Shopify or maybe even Canadian banks on the list, but not many would likely have picked Air Canada at the beginning of the decade. This information can also be dangerous to investors as well. It's our own human nature which can lead us to make bad investment decisions based on fomo (fear of missing out).

After a decade of strong returns and a particularly strong year of returns in 2019, it's important that you don't start chasing the markets or a particular investment. Now is the time for you to remind yourself of what returns you need to be successful in achieving your financial plan. Now is the time to pay attention to your investment process so you don't get caught making bad decisions. Chasing returns will only lead to one thing, buying high which is the exact opposite of what you want to do.

So can the 20's be as good as the 10's?

Absolutely they can but it's not a guarantee and so now more than ever it's important to take the bragging from your neighbour and your Uber driver with a grain of salt. Don't get caught looking in the rear-view mirror and focus on what's in front of you. If any lesson can be taken from the 10's, it's that patience and process were a winning strategy. That is likely to continue long into the future.

- Grant White, CIM, CFP

Grant White is a Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Grant White who is a Portfolio Manager for Industrial Alliance Securities Inc. (iA Securities) and does not necessarily reflect the opinion of iA Securities. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered. *Bloomberg Data, as of December 31st market closing.


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