Tom loves to watch sports that have a racer competing against a course as well as other competitors. Be it ski racing or car racing, one of the most exciting moments is when a racer makes a mistake and then has a dramatic recovery. He will often exclaim “nice save.”

 

Well, we could say the same thing for the various markets, especially the S&P 500 in August. After a sudden sell-off in the first few trading days of August it managed to work its way back into positive territory at the end of the month. Same could be said for the TSX and bonds had a modest month after a strong July. 

 

Earnings expectations led the market. The end of August marked the end of Q2 earnings. Overall the earnings modestly beat expectations with year-over-year growth of 11.2%. Revenue beat expectations but at a below average rate. For Q3, Factset expects modest earnings growth of 4.9% which is a slowdown from the first half of the year. For 2024 the expected earnings growth is just over 10%. For 2025, Factset is expecting earnings growth of 15.4%.

 

Valuation. This has been a tough spot for us as valuation in both the stock and bond market is pretty rich. Yes, there is growth, and an expectation that growth will continue in 2025. Our question is “what are we willing to pay today for a future dollar of earnings?” At the moment, Factset shows a forward Price/Earnings multiple of just under 21x vs the 10 year average of 17.4. Using Warren Buffett’s favourite indicator Stock Market Capitalization (Wilshire 5000) divided by GDP shows a value of around 190%, just below the highest recorded level of 193% in December of 2021. 

 

So the stock market is pricing in 15% earnings growth in 2025 and a the Federal reserve overnight rate at 3.5% vs 5.38% now. What makes this interesting is that interest rates usually go down in a slowing economy which would make the 15% earnings growth a bit of a challenge. There is little or no consideration of a recession bult into 2025 despite clear signs of a slowing economy. Therefore, we continue to add to our alternative strategy, selected bond managers, and opportunistically to more value oriented stocks. 

 

 

My Aspirational Money (Feature of the Month)

Giving myself permission – once everything and everyone is secured – to pursue my personal dreams

 

Once your current and future lifestyle has been taken care of, and your family’s and future generations’ needs are provided for, and there is still money left over, we can help you figure out what to do with it. We believe your surplus money is there for a purpose. We will coach you to help define that purpose. And it may just be to give yourself permission to follow your bliss and pursue your dreams. 

With this in mind, here is a lovely travel idea from one of our clients, an award-winning travel and cruise writer and photographer:

 

Is Antarctica calling you?

 

You’ve likely enjoyed travelling in Canada and the United States, ventured to some countries in Europe like Italy, France and Spain, and maybe explored an exotic destination  like Japan or Morocco. But have you considered visiting the Antarctic?

 

Although Antarctica is the coldest continent on earth, it may be a surprise to know that during the summer cruising (November to March) you can expect mild temperatures, around 0 degrees Celsius.  It can even go up to 10 degrees Celsius on a hot day. I have enjoyed memorable al fresco lunches and barbecue dinners surrounded by glaciers on expedition ships in the Antarctic Peninsula more than once!

 

If getting seasick during the 2-day crossing of the notoriously rough Drake Passage between Ushuaia Argentina and the Antarctic is holding you back from adventuring to the end of the earth, you may be interested to know that you can fly in one or both directions to Antarctica. Some of the expedition companies include a 2-hour charter flight directly to King George Island in the Antarctic from Punta Arenas, Chile. Although some people consider crossing the Drake a right of passage for Antarctic bound travellers, if flying is the best option for you, I say go for it!  I have flown the Drake twice and think it is a game-changer. And yes, I have also cruised the Drake more than once and experienced both the “Drake Lake” and the “Drake Shake.”

 

If you are considering an adventurous expedition cruise to the Antarctic soon, feel free to read Judi’s articles about her experiences in the polar regions on her website, https://travelingjudi.com/

 

Judi also invites you to follow her travels on Instagram @TravelingJudi.

T.A.G. wants to know, what are your top travel destinations? Let us know and we’ll work it into your financial plan!

 

 

T.A.G. ...on a lighter note!

 

Summer is such a special time for T.A.G. In our otherwise busy routines, this time offers us all a moment to pause, pull away from our busy schedules and enjoy the beautiful weather and the things that matter most to us.

 

Lisa and Tom: We made a bit of a discovery this summer. You don’t need to travel to the ends of the earth to find amazing natural beauty. It is in our backyard. But first a bit of backstory. Tom’s parents have always been attracted to nature and especially the landscapes in Canada’s more remote regions. For many winters they would go back-country skiing in alpine lodges in the Rockies. To honor this legacy Tom’s sister, brother, and spouses decided to visit Purcell Lodge, one of their favourite spots. We must say, it was an amazing experience. Purcell Lodge is on the second largest alpine meadow in North America sandwiched between the rugged Selkirk range and the more accessible Purcell range. The meadow was in full bloom and vistas were breathtaking. The hiking was as hard as you wished, the meals were divine, and the shared experience with the other guests very special. 

 

The lesson we learned was explore what is available to you right here in Canada before you sign up for a lengthy and costly trip to some far-off destination.

 

Mara: A memory from this summer that I will always treasure was our trip to Nashville. It was my first time there, and we had such a great time. A big group of us went for a 40th birthday celebration, and we enjoyed seeing the live music, eating the delicious southern food, touring the Grand Ole Opry, visiting the Country Music Hall of Fame, riding electric scooters all around the city, and relaxing by the pool. There is so much to see in Tennessee, I hope to go back someday.  

 

Jenn: We keep our summers very plain and in the city. Taking turns hosting BBQs, always getting as many people as possible so we can order family style meals at various restaurants, and tending to the garden on quieter weekends. 

 

Maddie: One of the highlights of my summer was celebrating “Tomato Day” with my family - a favourite tradition of ours! There were 27 of us that gathered to transform the ripe tomatoes into homemade sauce. From the youngest to the oldest, everyone was involved and had a part – whether it was boiling, stirring, or sealing the jars. It was a fun day filled with laughter, delicious food, and hard work… we made 300 jars of sauce! 

 

Susy: A couple editions ago we talked about our favourite GTA restaurants and I mentioned Pearl Morrissette. Having the opportunity to dine there with my husband, and kids, in June and, to have my chef-in-training son be introduced to their Head Chefs, Daniel and Eric complete with a private kitchen tour and chef table experience definitely tops the list.  

 

Matt: Our second annual camping trip to Grundy Lake Provincial Park was a special one. Although we missed William and Sonya due to William being sick, Mackenzie and I shared some rare one-on-one time, making the trip all the more memorable. We spent our time swimming, playing on the beach and cooking amazing food with my best friend and his family. I hope Mackenzie remembers these moments as fondly as I do.

 

 

T.A.G. Reading (...and Listening!)

 

Ikigai, The Japanese Secret to a Long and Happy Life
According to the Japanese, everyone has an ikigai—a reason for living. And according to the residents of the Japanese village with the world’s longest-living people, finding it is the key to a happier and longer life. Having a strong sense of ikigai—where what you love, what you’re good at, what you can get paid for, and what the world needs all overlap—means that each day is infused with meaning. It’s the reason we get up in the morning. It’s also the reason many Japanese never really retire (in fact there’s no word in Japanese that means retire in the sense it does in English): They remain active and work at what they enjoy, because they’ve found a real purpose in life—the happiness of always being busy.