Jennifer: For the markets in general, we have to grapple with the positive stimulative effects of rate cuts eventually working their way through versus the order of do we hit more severe economic slowdown first before those take effect.
Announcer: Welcome to this episode of the TDAM Talks podcast, where we navigate the ups and downs of stock markets in the midst of a whirlwind summer filled with unprecedented volatility. Today, we'll dive into the current market landscape and explore opportunities that arise during such turbulent times. We'll look at insights on the recent market swings and how they compare to historical events.
Announcer: We'll also discuss the outlook from the Fed and the Bank of Canada and what that means for investors. We'll take a closer look at current pricing in the markets future, uncover opportunities in Canada and explore the ever changing landscape of resources like gold, copper and lithium. Plus, we'll share some of the perspectives on Canadian energy companies and the potential risks on the horizon.
Announcer: Stay tuned for our Lightning Round, where we touch on hot topics like the U.S. election, housing and global conflict. Let's jump right in and get a handle on the chaos and opportunity the market presents today.
Ingrid: Hello, everyone. My name is Ingrid McIntosh and welcome to TDAM Talks on the podcast today I have the distinct pleasure of welcoming back a fan-favorite, Justin Flowerday, managing Director and head of public equities here at TD Asset Management, overseeing the management of $238 billion in assets and introducing two new faces. Doug Warwick, who many of our listeners know.
Ingrid: He leads our Canadian dividend team managing the Monthly Income Fund and the Canadian Dividend Growth Fund. Also, Jennifer Nowski, member of our active fundamental team for many years and the lead portfolio manager on our Canadian dividend and resource funds. Welcome to the podcast.
Justin: Great to be here, Ingrid.
Ingrid: Okay. Today we are going to talk about the current state of equity markets and we are recording this podcast for our listeners early in August in the face of some pretty meaningful volatility. But we want to talk, sort of, more broadly to kick ourselves off. Justin, take us back. We've had a pretty long bull run since middle of 2022.
Ingrid: Where are we today?
Justin: Yeah, so it's been a good run, you know, probably 18 months in the making. And when you least expect it, which is the summertime, things have gotten interesting.
Ingrid: Nothing much happened in the summer.
Justin: No, no, no, not at all. Yeah, no, it's been quite an eventful July and August. And for the first time ever in August, we had the VIX, which is a measure of market volatility, reach 60 and move through 60. So. Well, it's been very volatile. You know, the traders referred to the summer doldrums, which is a slowdown in market volatility, a slowdown in trading.
Justin: We haven't had that. There's a few things that have been driving this and you can point to a few different factors. I would say leading this is probably a series of economic data points which have come through over the last 4 to 6 weeks, which have shifted the focus for investors. And we've had an employment report, we've had inflation reports, we've had PMI manufacturing and really this has moved the focus from investors from one around concerns around inflation and stickiness of inflation, more towards the economy and the health of the consumer and the unemployment rate and really kind of questioning whether the Fed is behind the curve in terms of their monetary policy moves.
Justin: So that's probably the starting point. Beyond that, you've had some companies that have reported some good earnings, some not so good. But there's questions around the sustainability of the A.I. trend and the growth of that trend. And look, again, we've seen some really good numbers out of participants in the A.I. ecosystem. We've seen some not-so-good numbers. What's happening is the year-over-year (comparables) are getting a little more difficult. And then beyond that, I mean, we've had an assassination attempt of our presidential candidate nominee.
Justin: We've had the incumbent president announced that he's not going to rerun for election. I mean, this is the first time that's happened for a second term since 1968 when Lyndon Johnson pulled out because of backlash on Vietnam. So, you know, we're starting to get to know Kamala Harris a little bit better. And so all this has led to a lot of volatility.
Justin: I would say, you know, it's uncomfortable. The volatility is uncomfortable. But for portfolio managers on on our team, these are opportunities, right? We're getting these dislocations in the market which are creating a divergence between what we view as really strong fundamentals of certain businesses and their stock prices. And so this is an alpha generating opportunity for us and we're looking to exploit that.
Ingrid: It's interesting you talk about volatility, and as we're recording this earlier this week, we saw, you know, one of the biggest one day drops (that) we've seen in quite some time in some of the global markets. And this is when we start to see, you know, advisors and investors panic a little bit. And, you know, Doug, at the outset, I said you're a new face, but you're really not.
Ingrid: You're going on 40 years in terms of managing assets here at TD Asset Management and a longer career beyond that, when you look at a day like we've had earlier this week, can you put that in context to what you've seen over the years and is it anything to worry about?
Doug: Yeah, I didn't think this latest little correction was anything to worry about, it kind of seemed to originate in Japan with carry trade. And then as Justin said, there were, you know, questions on the most recent U.S. employment report, etc.. But to me, the bond market hadn't really shown any signs of stress and the earnings outlook is good.
Doug: And so it's just one of those corrections where we've just been used to the last year and a half being pretty smooth and it's quite normal to get 10% or even 20% corrections in any given year. Yeah, I'm not concerned about what happened.
Ingrid: When you take it back to some of the, you know, the really scary days you've seen over your career, maybe talk a little bit about that because I think we I want to pull a little bit while we've got you, Doug, in terms of, you know, how the investing landscape is changing. And I know I was young. I was three weeks into my first job trading in 1987.
Jennifer: I know we've talked about this before and you compare sort of the world today to that to back then.
Doug: Well, yeah, 1987, it was a little bit scary, but it quite quickly, you know, the market got over it and recovered. It was why I recall it was only four or five months and we were right back to to where we were. So, you know, if you look at a stock chart, that's barely a blip on the trend line.
Doug: What really got me, though, was 2008 when, you know, it was kind of scary through the summer and then into the fall. And then they decided when Lehman became insolvent that they wouldn't support the depositors. That was scary because then everything the whole financial system blocked up, that was really bad because if they wouldn't protect Lehman Brothers, you know who they were talking about, moral hazard and all this stuff.
Doug: But, holy smokes, you got to keep the system alive. And so to me, that was the most scary moment. A couple more white hair there, too.
Ingrid: And you came from a starting place with a fair bit to begin with then? Yes, I think so. You know, John, I think back to your career at TDM and you had just started sort of in the two years before 2008. You know, what do you recall about that?
Jennifer: Yeah. So that was an event that was very early in my career.
Jennifer: And I just remember how massive and complex it was kind of as Doug was alluding to investors were trying to suss out, you know, where the troubled assets were and, you know, major financial institutions having serious problems with liquidity that were very hard to grasp. And just the regulatory response that was needed. Whereas if you fast forward to today, like we have these periods of market volatility and there's concerns about, you know, slowing growth, maybe a recession, but it's just such a very different situation in terms of debating economic growth and if the Fed might have been behind the curve and do any cuts versus the the massive dislocations that were happening back then.
Ingrid: And you think about it, people were sort of predicting something happened. There was you know, there was structural challenges and which really don't exist today. I think, you know, by the time our listeners listen to this were of having the same narrative that we often have, which is volatility happens, happens from time to time for the long term investor, you want to stay invested and ride through these storms.
Ingrid: And as portfolio managers we’re always looking for those opportunities, let's break it down a little bit further. One of the big topics and you alluded to it, Justin, was really the rate environment. Some of the spark of the volatility was the Fed's decision, last week not to move, followed by, you know, the weak employment data.
Ingrid: What is our outlook from the Fed, what we expect to happen? Where do we think the Bank of Canada is going? What does this actually mean for the Canadian market?
Justin: Yeah, maybe I'll start off just on the on the U.S. The Fed decided not to cut rates in its last meeting in July. There's a summit in Jackson Hole that will take place in August. That'll be an opportunity for Powell to provide his view of where we're at and probably signal his intentions for the fall.
Justin: And then we're getting to September. And I think the debate right now is between is this going to be a 25 basis point cut or a 50 basis point cut? And I think both are on the table and it'll depend on how the market reacts until then. Right. There's a there's a virtuous circle here where the market provides feedback that can have real implications for the economy and liquidity.
Justin: And then the Fed tends to react in terms of Canada. I'll pass it over to Doug or Jen to provide what they're viewing as the rate environment there.
Doug: Well, you know, Canada's been a little weaker than the US and and I think that's in good part because we've got a mortgage system in Canada where the renewals or every 3 to 5 years versus in the U.S. where you can get a 30 year fixed. So the consumer is anyone who has a large more recent mortgage on a house is pretty stressed with these higher rates.
Doug: So, and that our job numbers, our productivity numbers, you know a number of indicators show that Canada's weaker. So we've had two cuts already. And you know, the consensus seems to be that we'll get a cut of 25 basis points every Bank of Canada meeting for the balance of this year and into next year. The U.S. has been a little stronger.
Doug: And that's why they've they've held back.
Ingrid: Let's play it forward then in and talk about. So how do we think about some of the big stalwarts under the Canadian market, like the banking sector, etc.? How do we think about how we're priced today and what that means for the landscape?
Jennifer: Yeah, I think for the markets in general, we have to grapple with the positive stimulative effects of rate cuts eventually working their way through versus the order of: do we hit more severe economic slowdown first before those take effect.
Jennifer: So that's where it's going to create this volatility of how potentially slow that economic growth gets versus the benefits of rate cuts. I will say, in the Canadian context of banks are an important sector. And when you look at the banks, you know, lower rates cause a bit of a headwind for NIMS, but it could help on the credit side in terms of taking that pressure off the consumer.
Jennifer: And what's really critical is jobs numbers for consumers staying current on their credit balances. So that's something that we'll be watching very closely. On the positive effect, though, of rate cuts, they're supportive of equity market valuations and in particular some interest rate or higher dividend yielding sectors. Those valuations have seen a bit of pressure from higher rates. As that come off, it's helpful for their valuations like “telcos” and utilities, It also improves earnings a bit because it lowers your interest expense and it could attract flows back into the market.
Jennifer: You know, as as you know very well, “GIC” rates have been quite attractive for many investors. If those rates are lower, they might take another look at some of these higher dividend yielding stocks.
Ingrid: And I think that's something that we you know, we've grappled with for quite some time is seeing investors in the face of that backward looking volatility or perceived low fixed income rates, putting their long term savings into GICs, which, you know, there's a place for GICs in every portfolio.
Ingrid: But as a long term strategy, it doesn't play through. Can you go a little bit deeper in terms like where you're looking for opportunities in Canada, where do you see the real opportunities?
Ingrid: Well, I'll start I'll dig in a little more on the bank question. Again, very important and large sector. I think some positive things are perhaps getting less attention from the banks these days.
Jennifer: They still remain very well capitalized and “OSFI” in their recent decision decided to maintain the domestic stability buffer where it is. So it's good to have that stability as secondly, some operational improvements. Expense growth was running a bit hot last year and this year there's been signs that that has been brought more under control with some restructuring actions.
Jennifer: So you're starting to see better pretax pre-provision growth among some of the Canadian banks. Now, the thing that's been more a headwind is credit. So provisions for credit losses, they were running abnormally low a couple of years ago and they have been normalizing as expected. So there's nothing alarming there. But however, the market is waiting for these to peak because if you say,
Ingrid: have we made enough of a provision.
Jennifer: Exactly. And it also weighs on your reported EPS growth. So the sector is not showing a lot of total EPS growth because we still have to take some provisions. So that's something the market's very keyed in on. The one positive, though, as I alluded to, you know, dividend yields are quite attractive. The Canadian banks are yielding around 5% in terms of their dividend yield right now.
Jennifer: So in terms of having some perhaps risk priced in, when you look at their multiples, you're starting to see that.
Ingrid: Yeah, a little bit of paid to wait when you're when when you're in that sector and to sort of step back to Doug a little bit because as we said at the top, you've been in the investing landscape for a long time and what would you say is really meaningfully different about the markets from when you started or what have you seen the biggest changes to be in the investing landscape?
Doug: Well, when I first started, you know, desktop computers didn't exist. You know, a lot of the business was done by phone trade settlements were in five days. We've just moved to two days now. So really when I started it, it was it's the speed of information and the access to information, and everyone has access to the same information instantly.
Doug: And so that's why you're getting much greater immediate reactions.
Justin: Doug, you were you were mentioning before you'd see an announcement by a company or some development by a company, and sometimes you wouldn't see an impact on the stock price for you know, a day or two. Now it's like a second or two.
Doug: Yeah, that's to me, that's the biggest change.
Ingrid: Yes, it's been a real democratization of information and access and speed. So how do you manage to add value differently today than you might have 20 or 30 or 40 years ago?
Doug: Well, you certainly have to be ahead of these announcements as you did back then, too. But that's what we do. We we dig around. We we get our story, the thesis on our stocks. Correct. And then invest accordingly and then just wait to see how the actual results unfold versus how we positioned ourselves here.
Justin: One of Doug's greatest traits is, is his patience. He's been one of the most patient investors for 40 years, and that's led to a lot of businesses is success. I would say we're actually getting into an environment where investors who are patient are going to get paid even more for their patients just because everything is so short term and you have so many different market participants who are creating opportunities and creating volatility and dislocations so that the investors who are willing to take a 12 to 18 month view, there's more opportunities, there's more potential for alpha generation.
Ingrid: And that ability to stick to the thesis irrespective of the noise that's going around and not be tempted to be moved. So again, working as closely as you have with Doug, you know, what have you taken away?
Jennifer: Yeah, no, it's something I think having worked with Doug for a few years now, I've gained more appreciation for his style as I've gotten older and certainly is that being able to have a view ask questions that the street isn't necessarily acting and then, as we said, be patient with it.
Jennifer: Tune out the noise and the “short term-ism” that the street's giving you in terms of what's going to work in the next six months or something like that, and really thinking about the long term and sticking with it. And then as Portfolio Managers and he's acknowledged this as well, you know, at times you do have to make a change and but you don't want to be changing too fast.
Jennifer: So you got to assess when we need a change and when we don't. And Doug, over time has been very, very consistent with his approach and how he manages through whether it's volatility or people questioning what he's doing. But I think it's led to strong outperformance over the long run.
Ingrid: And it really it has it's been borne out.
Ingrid: Absolutely. And when we think about the promise we make our clients, we're there to build their long term portfolios, build for their their future, their retirements or whatever it is that they are investing for. I'm going to pivot the question a little bit, Doug, what's one thing you've learned working with Jen?
Doug: Well, Jennifer is incredibly efficient. She figures out what has to be done and just puts her head down and gets it done. So that's a very good characteristic.
Ingrid: Yeah, just that the speed of processing the information they have, does that come from having a couple of eight year old twins at home Jen? They know how to keep you on your toes. Let's pivot back then. We've been talking about the broader scope and a lot of the dividend paying companies in Canada. You also manage the resource funds for TD Asset Management.
Ingrid: What's going on in that landscape? What should we be thinking about? Maybe start with gold,
Jennifer: Sure, on the on the gold side, gold's been kind of in a bull market for the past couple of years and the last year I'm perhaps particularly surprising for people because when we look at gold, we think of three key drivers U.S. real yields, the U.S. dollar and demand and real yields have really risen a lot during that time period.
Jennifer: That should have been a headwind. But gold rallied because there's just been abnormally high demand from central banks for gold purchases. You know, they've been net purchasers of gold for the past decade plus as they work to diversify their reserves away from the U.S. dollar. This accelerated over the past year and a bit. So that's been really supportive.
Jennifer: Now, as we've looked at gold more recently in the past few months, the debate about if and when the Fed is going to cut has heated up. And now that the kind of consensus is shifting more towards Fed cuts, that's been supportive of the more recent gold price rally. Now, where you could see headwinds is from, you know, gold being more expensive for buyers.
Jennifer: It kind of dampens jewelry demand. The Chinese central bank at times is more value buyer and they've paused some of their purchases in the past couple of months. But overall, when you look at the environment of potentially lower real yields, I'd say a continued trend to the “de-dollarization” and a lot of, you know, uncertainty in the world, whether it be geopolitics, elections, that sort of thing, fiscal debt and deficit in the U.S. it's broadly a supportive environment for gold.
Jennifer: The companies themselves, this is a very good gold price for them. The large caps have worked hard to de-lever over the past couple of years, and they do generate some free cash flow at these levels, call it, you know, close to 5% for the senior producers.
Ingrid: And I think people look at the spot price of gold. They say it's an all time high, but inflation adjusted, there's probably some more room that right?
Jennifer: Yeah.
Ingrid: What about base metals like copper?
Jennifer: So copper ... copper is kind of the bellwether. It had quite a run up kind of into the spring this year And it is based on, you know, demand kind of holding up fairly well. But really a big supply outage with Cobre, Panama being taken offline. A number of the senior producers continuing to miss or fall short on their production levels.
Jennifer: So you did have a very real tightening of the market and of course, with commodities, these things get taken a bit too far because you get speculators entering the market and pushing the price kind of above what we would think. So that's created some volatility. The copper price has softened a bit lately, probably on some maybe concerns of demand in China, which is, you know, China consumes about 50% of often of most base metals.
Jennifer: So they're really important market to watch. And the stocks really have taken their cues from from the copper price.
Ingrid: I want to make sure we keep going down this path and think about some of the other really big trends, whether it's the EV trend, Lithium?
Ingrid: Lithium basically collapsed over the past year. Lithium is in interesting market because, you know, it's got probably the strongest demand growth we'd see across commodities, call it 15% to 20% a year.
Jennifer: Now, you know, estimates vary a lot because you have to make a lot of assumptions about the growth of EVs, battery sizes and band. So although the growth has been very strong, these companies have been able to access funding and have built a lot of new lithium production facilities. And unfortunately we got into this crosshairs of supply outpacing demand.
Jennifer: So now the lithium price is corrected and going through the latest earnings reports from a number of the companies, they're cutting back on production. They're pushing out the growth plans. They're doing what you would expect in a really weak commodity price environment. And, you know, historically, that is a type of action that's needed to correct these sort of dislocations.
Jennifer: But it could take - it could take time.
Ingrid: I don't think we can talk about the Canadian market without having a conversation about energy companies. So outlook, viewpoint, where are we?
Ingrid: So the biggest thing about resource companies and energy companies in particular is in what strong financial condition they are in right now, especially compared to their history and the amount of discipline they have in terms of their operational decisions as well as returning cash to shareholders.
Jennifer: So if you think back kind of a decade plus, the end of the last commodity boom in 2012, companies were spending money hand over fist, they were spending to grow. And there was very, very little to none, no free cash flow in the sector. So after years of tougher commodity prices, we've found some discipline in terms of managing debt levels and actually working to produce free cash flow.
Jennifer: So if you look at, say, the top five Canadian energy producers, they've made a real improvement in their level of leverage net debt to EBITDA as around .6X for them, which is very low and free cash flow. You know, oil price will jump around, the stock prices will jump around, but I call it $80 or so.
Jennifer: They're in a high single digit free cash flow yields, which is very attractive compared to the rest of the market. And on top of that, now that they've paid down much of their debt, they're returning even more of that to shareholders. So we're seeing more dividend announcements, more buybacks being made and that's very attractive for us managing these dividend funds because we want to see that disciplined returning of cash to shareholders.
Ingrid: So I mean, everywhere we're looking at Canada, we're getting a really positive or optimistic narrative. Is there something we're missing? Is there a risk that we're not thinking about What's what's the other side of that equation?
Justin: I would kind of highlight would Doug mentioned earlier just around productivity and for the long term success of our economy, it really is going to come down to our ability to be more productive as a society, which would mean less reliance on things that have driven our economy in the last ten years. Right. I mean, a big chunk of our economy has been tied up in in housing, and it's had really great growth.
Justin: But it's as a percentage of an economy, you don't necessarily want as much tied up in housing. You want it more tied up in technology, in in health care, in other areas that are just going to generate more productivity for the economy. We have a pretty good A.I. hub in terms of a lot of academics and a lot of research.
Ingrid: You know, that was my next question is like, how is the A.I. story going to play out?
Justin: Yeah, and we have a really kind of ecosystem in Toronto and Montreal and in Vancouver, and we need to find a way to continue to harvest all of that knowledge and produce viable companies that are going to, you know, build partnerships with the companies and continue to grow. I think productivity is at the center of Canada's success or lack thereof over the next decade.
Ingrid: Does that mean that we're seeing companies emerging in sectors or categories that we haven't historically seen and that is new areas of opportunity that we haven't necessarily explored.
Justin: Not in the public sector, in the private sector, there's there's there's waves of private companies that come up and then some of them survive. Some of them don't. Not a ton make it and have been able to make it into the public sector, partially because once you get to a certain level in Canada there's been a trend of you get taken out by one of our U.S. kind of larger peers or one of the consolidators in the industry.
Justin: And so, again, we need to find a way to allow these companies to grow and continue to grow and have the funding to grow without having to rely on a take out, you know, halfway up the S-curve.
Jennifer: Got to turn back to you, Doug. I mean, we've been talking about a lot of the themes that, again, you're coming at this for the long view. Is there something that we haven't talked about in Canada or something that you're really watching for?
Doug: I think Canada has a whole lot of what the world needs. So we've got natural gas, we've got oil, Potash, excess agricultural products, forest products. So, you know, I think Canada has the potential to to be really, really exciting going forward, you know, for the portfolio. So I've got Jennifer talked about energy and and to me there's been quite a change there in terms of looking for dividend stocks, for portfolios.
Doug: These energy companies are becoming dividend stocks. And you just have to get over the possible volatility in the price of natural gas and the oil price. But I do think, you know, there's less and less excess capacity in OPEC and I think those the prices going forward will be more towards the upper range than than the lows we've seen the last decade or two.
Doug: So, you know, I I'm very excited about where Canada can go and our portfolios.
Ingrid: So again, we've come to a place as I come to the end and we lean into my favorite the lightning round where I surprise you all with with some themes but we're coming into this last lightning round with a really positive bias to Canada. We've talked about the sectors, the high level of optimism. So I'm going to kick off with some of the key areas that we're getting questions from advisors and investors on.
Ingrid: The first lob in my Lightning Round: “U.S. elections.”
Justin: Yeah, so that's a really tricky one. And you've seen a development recently where post the assassination attempt on Trump, we've had Kamala Harris become the nominee for the Democrats and she is now most recently announced that Tim Walz is going to be a running mate. That makes a really strong ... I think it was a clever choice for Kamala, and I think it's a strong partnership that's going to continue the momentum that the Democrats have been able to show in the last, you know, a couple of weeks.
Justin: And going forward, it is going to come down to those six swing states. And right now it's a coin toss, in my opinion. And for the markets, there are differing policies depending on whether you get Trump or Kamala. And I think there's going to be a reaction on that morning based on who it's going to be and time will tell.
Justin: But for sure, three more months of very interesting times.
Jennifer: And for our listeners, we did recently publish a podcast where we looked at the the outcomes of the two parties, what they meant for asset classes, what they meant for policy. So be sure to take a listen to that. Is there anything different in that landscape with a Kamala Harris on ticket versus Biden?
Justin: No, not very much. They have very similar platforms. And I would just say Kamala is going to try and move forward some of the initiatives that Biden had been discussing over the last four years.
Ingrid: I'm going to pivot the next question to: “Canadian housing market.”
Jennifer: Housing probably worry more about it in terms of growth and the potential headwind to discretionary spending that higher rates have. However, in terms of the credit issue, I worry less about that. I think the banks have very strong underwriting standards when they underwrite mortgages. If you look at the high FICO scores of the average uninsured customer, the loan to value on the uninsured books around 50%.
Jennifer: So lots of insulation there. And consumers also have seen their incomes rise since they last renewed their mortgage. So that and combined with if we get some more rate cuts and employment will be again key to maintaining.
Jennifer: Yeah we do talk about the housing pressure, you know in the context of young Canadians trying to get onto that housing ladder.
Ingrid: But for many Canadians, maybe their mortgages paid, you know, maybe they are there. So, you know, that impact isn't on everybody, but it certainly is on the fair share of the wallet, it's been quite a week. And I think we're also heading into something else of concern. So last question I’m going to lob is global conflict, which should we be worried about.
Doug: Well, man, there's there's a whole list of things. You know, there's the ongoing Ukrainian-Russian issue and you know how that progresses over the next couple of years and whether it spreads to Europe. That's said that's certainly a concern. But, you know, most recently, the Middle East and the Israeli strikes on Hezbollah in Lebanon and and then again in Iran, you know, and Iran said they will respond.
Doug: So you all I know the U.S. is sending a bunch more warships there and really getting on a defensive footing. But you just worry how that's going to unfold. Is that going to take out some of the oil facilities there? You've got the Strait of Hormuz, which I think 20% of the world's energy travels through. So all kinds of potential implications for the world.
Doug: So I worry about that longer term. You know, you got to worry about the U.S. either party there being, I think, irresponsible fiscally. And so at some point, though there will be a credit reckoning that will, you know, when they'll sit down and yeah, they'll they'll figure it out and then move on. But, you know, there's there's all kinds of things to look forward to.
Ingrid: Yeah. And when we think about it, I mean, the global conflict is deeply worrying. Is it is the direct impact, as you've called out, like, you know, to the Canadian or North American markets potentially related to the energy side or just generally volatility, the risk of the unknown?
Doug: Well, it would, you know, if there was an impact on energy, that would be good for Canada, I suppose, or North America. But, you know, those events would probably create a lot of volatility in the markets.
Justin: In terms of the impact on the economy, though, I think, you know, the direct correlation outside of commodities, the direct correlation to global GDP would be somewhat low.
Ingrid: You know, Doug, from your perspective, what's the what's the last thing you'd sort of say to investors in terms of their investing success?
Doug: Yeah, I think the important thing is to stay invested over time. The markets tend to grind up over time and the ups and downs tend to not look that significant when you look back over many, many years.
Jennifer: And so you can know.
Doug: Yeah. And so, you know, I don't know whether it's dollar cost averaging into the market or whatever. Just just keep at it. You know I would say stick to, you know, the bigger blue chip companies that that pay dividends. You know, there's a survivor bias to to those sorts of companies and and they tend to outperform over time.
Ingrid: Justin, any last thoughts?
Justin: Stick to your process. Process, process, process will lead to success over the long term.
Ingrid: Thank you. All. Justin, Doug, Jennifer, thanks so much for joining us. Thanks for taking us through a landscape of the Canadian marketplace in the face of some ongoing volatility and world events. Hopefully to our listeners, you can get more information. Follow us on Spotify, Apple and Amazon to listen to more of our podcasts or follow us at TD Asset Management.com and on LinkedIn.
Ingrid: Thanks everybody. Have a great day and stay safe.
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Information about the portfolio Holdings asset allocation for diversification is historical and is subject to change. This document may contain forward looking statements for FLSs. FLSs reflects our expectations and projections about future events and or outcomes based on categorically available. Such expectations and projections may be incorrect in the future, as events which were not anticipated or considered in their formulation may occur and lead to results to differ materially from those expressed or implied.
FLSs are not guarantees of future performance and reliance on FLSs should be avoided. Global Investment Solutions represents TDI, Asset management Inc and Epoch Investment Partners. Those entities are affiliates and wholly owned subsidiaries of the Toronto-Dominion Bank.
Canada
