Communications

Before getting into the heart of the matter, I am pleased to announce that the first annual investors’ meeting in the Montreal region will be held on June 5, at the Club St-Denis.

I have delayed writing this newsletter for as long as I could so as to include the latest geopolitical events (but still before tariffs unfortunately). In the coming years, they will have major impacts on optimal investment strategies. For 15 years now, Rivemont’s objective has been to build portfolios where the primary goal is to maximize returns for a given risk. In other words, we are not taking additional risks to achieve better results, quite the contrary.

As I write this on October 20, 2024, major indices have reached historic highs, and gold is at its all-time highest price. We’re in what is called an all-assets bull market. These periods are relatively rare, and one of the objectives of a portfolio manager like Rivemont is to take full advantage of them. And I can tell you that our clients are greatly benefiting from this positive period.

When you’re sailing, it’s important to have a good boat with a competent captain at the helm, but what really helps is to have the wind at your back. In North America, for more than 200 years now, the stock market has offered investors an average annual return of nearly 10%. In terms of enrichment, it’s the most powerful and consistent vehicle out there.

As I am writing this, the Trudeau government has just announced a significant increase in capital gains taxation in this country, with no income floor for corporations and trusts. This decision is, in my view, extremely bad for investment and risk-taking in Canada, and will have long-term negative consequences for the strength and health of the Canadian economy.

The year is coming to an end on the markets, and they are still riding the bull wave that began in 2021. However, we are at a crossroads, and the coming weeks will be critical in determining with greater certainty the next stock index trends.

That being said, the beauty, if not the benefit, of active management is that it is fortunately possible to remain underweight in certain asset classes. In addition, even when markets are stagnating, there are still opportunities in specific sectors.

The first half of 2023 has now ended, and the market is still looking for a clear direction. With the exception of less than a dozen technology large caps, negative trends for North American stock markets have stabilized over the first six months of the year.