Connecting dot strategy in action
I have been showing clients how to use this strategy ever since I read about it after the 2000 tech crash. When researching why this crash happened, the interest rates were still low. Therefore, according to the information I received, I was not expecting the crash to occur, which fit my Money Movement Strategy.
That is when I found out about an investment newsletter created by Tony Sagami, the only person I know who had predicted the tech market selloff.
He used a noble prize mathematical formula, saving many investors from losing thousands of dollars. But the best advice I picked up from him was his use of “connecting the dot.”.
I read how he could make predictions by gathering news articles or current events and creating a picture by connecting these headlines.
As he said, connecting the current events in the world and Business was similar to connecting the dots. They both create a picture.
I discovered that the main street media would tell you one thing, but connecting the dots gave us a much more accurate picture of the economy. Especially when you know that the media would use negative news to sell readership and advertisement or has a political slant to it and only give you half of the real story on what was happening. Need I say fake news?
Connecting the dots gives us a clear vision of what is happening now and in the future.
Over the last 20 years, I have been using this strategy, along with Fundamentals, Market Sentiment, Demographics, and a Money Movement strategy. Now, I have added my breakthrough new strategy comparing the GDP with the stock market to obtain even better returns for my clients.
These strategies have created an average rate return of 20% over the last 20 years.
Michael Murphy is one of the top Financial Planners in Canada. He also runs a company called True Help Financial, where he not only supplies every aspect of Financial Planning but also sells leads gathered from his survey Questionnaires to thousands of Independent Financial Planners across the country.
He said this about my article on “Connecting the dots; Dan’s Connecting the dots article is the best financial article I have read in my 40 years in this Business. Hopefully, you like it too.
Here are the results and how I achieved them.
My eight-year average return pry in 1990 was 16.8%. This was when the first wave of Baby Boomers created the real stock market (pry to 1982, only 4% of the public was invested in the stock market), and I rode the wave up along with many of my fellow boomers. Still, I was not writing articles at this time, and my results were not recorded in the Bruce County Marketplace Magazine.
However, I started to write my first articles in 1990 as I was trying to reach all my clients simultaneously with timely information on the state of the markets and how to invest their money; needless to say, my Business took off.
Oct 1990
John Crow, governor of the Bank of Canada, had kept interest rates high to slow down the economy as Baby Boomers were spending like never before. This spending fueled inflation. Raising interest rates was the only way to fight inflation. I pointed out that he was successful, and with interest rates peaking at 13% and creating a recession, The Feds had to reverse course and start lowering interest rates to get out of the recession.
Bond yields would increase as interest rates decrease, and the combined capital appreciation makes bonds desirable investments. Therefore, I said the Prudential Income Fund of Canada should perform well over the next 12 to 18 months.
If the interest rates dropped by 1%, the current value of the Bond Fund would increase by 8%.
If it fell by 2%, the value would increase the Bond by 16%.
A current Bond at 11.5% would yield 19.5% when you add the 8% capital appreciation to it if the rate dropped by 1% and 27.5% if it dropped 2% when you add the 16% capital appreciation.
Result February 1992
Sixteen months later, the Prudential Income Fund returns ended at 21.9%.
Surprisingly, I was on target and even started believing in myself.
October 27th, 1992
We then transferred 100% of all our funds to the Prudential Natural Resources Fund the day after Quebec Provincial election when the PQ was elected, October 27th, 1992.
The stock market in Canada was down before this, which was caused by the uncertainty of the Canadian Dollar, as no one wanted to invest in a country if they did not know the Dollar’s value if Quebec was separating. However, once the election was over, the markets would rebound as the Governments could now focus on the economy and not the politics and all the uncertainty would be over.
It should be known at this time; I was unaware of slingshots.
That soon changed as I saw my first one in November and December of 1992, as the Natural Resource Fund shot up 20% in those two months. The run-up in the first few weeks is the most vital part of the Slingshot.
January 1993
Equity Markets were about to rise was my headline in the Bruce County Market Place Magazine.
Mutual funds are sold based on what they have done in the past; this is a big mistake.
For example, Bond funds created a huge Capital appreciation the year before due to interest rates decreasing. The same situation was not going to happen again.
Interest rates tended to bounce up the following year after aggressive cuts by the Bank of Canada stimulated the economy and eliminated the ongoing recession created by raising interest rates needed to fight inflation.
But as soon the economy picks up, so do the interest rates. So, naturally, this hurts Bond Yields. Therefore, all those Financial Planners and Banks chasing last year’s returns are too late, causing losses rather than gains as interest backtracked as lower rates are no longer needed to stimulate the economy.
It is like a radar trap for all inexperienced Financial Planners, and another reason is that big Banks and Insurance companies will promote last year’s winners to increase their sales based on past results.
It does not matter what the funds did last year. What matters is what they are going to do this year with your money as we advance.
The” money movement strategy” shows you how you can predict the stock market’s future direction based on Interest rates.
I liked the Prudential Natural Resource funds for 1993, as four of the six indicators pointed out that the bear market was coming to an end, and it was time for equity markets to rise.
After I quantified each fund, I chose the Natural Resources funds over five other equity funds. The main reason I chose these funds was after the PQ was elected in Quebec and was based on separation, the Canadian Dollar plummeted to 60 cents to the U.S Dollar. This would mean our exports were much cheaper to buy, and therefore because Canada was known for our resources and at the same time, the first thing you need to kick start an economy is the raw material. (See sector rotation) Items must be made before they are sold in the open market, which means Natural Resources.
We, therefore, moved every client 100% into the Prudential Natural Resources fund in October 1990 from the bond funds we were holding.
In January 1993, this fund increased by 14.18% and was added to the 20% it earned after October 27th, 1992. This made our funds rise to 34.18% in just three months. We were in a slingshot. It was my first, so I was unaware of what would happen. However, I knew I was in the right fund at the right time. Mexico had just increased their imports of Natural Resources to make products to sell back to us.
At that time, I pointed out that the Canadian Dollar would stay low in the coming year because Parti-Quebecois leader Jacques Parizeau was gloating over English Canada’s rejection of Quebec’s demands, and foreign investors naturally shy away from countries that were in danger of separation. Our Dollar would be worthless to them. The lower Dollar would drive up our export,s and that means Natural Resources would continue to be exported in mass.
The Natural Resources continued to climb up, and by April 30th, 1993, the fund was up 31%, and when you combined this with the 20% we earned since October 27th, 1992, we have an increase of 51% in only six months. I was starting to understand the power of a slingshot.
The Slingshot continued, and our advice was right on target, thanks to my new” Connecting the dots” strategy” which I used for short-term forecasting based on the current affairs of the current economy.
Because most Financial Advisers and banks tell you, you’re investing for the long term; their returns cannot produce the same result. After all, why stay in a fund going down and wait two years to rebound?
By October 1993, the Slingshot was still going, and I was blown away by how strong it was, and my clients loved it.
The fund was up 89.8%, and when you add that 20% since the day we invested in Natural Resources, it was now over 100%, we had doubled our money in a year. Wow! I was unaware of what this fund would do at the beginning of the year, but I knew it was the correct fund.
We just made ten years return in one year. Was it luck or intelligent research? I think it was both.
January 2nd, 1994
We had a new threat coming out of Quebe; a new Federal party was formed for one purpose: to separate from Canada; they were called “the bloc.”.
This is where my strategy of “connecting the dots” kicked in when the Vice President of Prudential and their top agents there began to call me a genius.
And here is why.
I saw the same negative effect coming out of Quebec but worse this time because when it was just the PQ, Quebec could not separate. Then, it was only provincial, but with the federal government’s bloc, we were now faced with separation.
I knew I was not the only one who could see this, that foreign money would further push the Canadian dollar value down. To offset this, the government would have to raise Interest rates so that foreign investment would become attracted to the higher returns.
That means both the Stock Market and the Bond Market would lose ground.
So that left only one investment left Cash. That meant money markets funds.
The returns from these typical funds were less than 4%; this did not excite me after making over 100% last year. Therefore, I wanted to research my options.
I came up with transferring the money out of Mutual Funds to GIC or Term Deposit investments called Deferred Annuities with Insurance Companies that were earning 8.5% at the time.
Double what a money market fund was paying.
When you invest in GICs or term deposits at a bank for five years, you lock up that money for the full five years. After that, you have no access to it.
But I knew if the interest rates dropped lower than what they were paying you if you invested with an Insurance company.
They would gladly cash in your funds and save on the extra interest they were paying you at no cost.
When Prudential saw that none of my clients lost money while the stock and bond markets fell and I became the number one agent in Canada for investment sales, they even named me the ” Executive Vice President, Investment product sale.”.
I parked the client’s money at 8.5% instead of 4%.
December 1994
I was brought down to the head office in Toronto because Prudential wanted feedback from their top agents on how to attract more of the money being invested by the baby boomers.
I told them that because of the ongoing situation with Quebec wanting to separate and the effects on our dollar and interest rates and the stock market, we needed foreign funds to create new funds that were not invested in Canada.
Like the U.S funds that were making 40% right then or an International Fund like the Templeton growth fund that was making 18%.
I told them I would not have had to transfer our funds out of Mutual funds if we had them, but I had no choice because all our Canadian-based funds were affected by Quebec’s need to separate.
They then said they did not see the need for these foreign funds as most of the money was registered, which needed to be in Canadian funds.
I responded with, “have you ever watched the movie” Field of Dreams? If you build it, they will come”?
I said build the funds, and I will bring the money”. As a result, two new funds were created, the American equity fund and the Global equity fund.
January 1995
In my article in January 1995, I told everyone about our two new funds. I also stated that when you give a sales force new products, they will all start selling them; this will provide these funds with an artificial boost that would come only once, at the creation of these new funds.
I also stated that, like me, many agents had already created a book of Business where we would transfer all our none registered funds to these two new products,s and under the RRSP’s rules, we could move 20% of our RRSPs and avoid what was going on with Quebec forever.
So not knowing which fund would be better, I decided to split investments 50/50 between the two funds; we moved 100% of our nonregistered funds parked in those GICs and 20% of our RRSPs in the same parked GICs into these two funded.
The results were as follows:
The Prudential American Equity Fund = 53.75%
The Prudential Global Equity Fund = 31.00%.
That was much better than those GICs, but we still had 80% of our RRSPs parked in them. This was getting to me; I enjoy making my clients money and felt the Quebec issue was holding us back.
October 1995.
By now, I was getting pretty good at ” connecting the dots” and started to understand the effects of “slingshots” much better and knew precisely when they would occur. This slingshot knowledge allowed me to remove all fear of stock market corrections and take the emotions out of investing while also probably one of the best wealth creation strategies I use to make clients wealthy.
When I combined these two strategies, I made my boldest prediction. I played Rugby, and I played with about 30 Alpha males. I also played hockey with another 16 Alpha males and 11 other teams in our league with all their Alpha males. So over two hundred players. They read my articles and in a town where they called me the money man.
Can you imagine how I would be razzed in the dressing rooms if I made a bold prediction and was wrong? However, I was so optimistic about this that I had to say it.
Firstly you have to remember we still had 80% of our RRSPs sitting in GICs or term deposit type of investments at 8.5%. So I was eager to match what we had just done with our two new funds.
So Quebec was finally having its Referendum on whether it would separate from Canada in November.
I wanted to be in a position to be at the very beginning of a slingshot should Quebec say no. As I reminded myself of how fast the Slingshot took off in 1993
So this is what I wrote in October for the November edition of the Magazine; “If Quebec says “NO,” we would have a strong rally making 25% in three or four months.
I then started having clients sign transfer forms, moving everyone out of the RRSP funds parked at 8.5%, and investing them into two funds that I thought would react the fastest in a slingshot.
I liked the potential of two funds in the upcoming Slingshot. I went 50/50.
The first fund was my favourite, the Prudential Natural Resources Fund, and the entry level was set at 32.6%. (you recall, this fund was over 120% and now had dropped to 32.6%, which my clients did not experience because they were parked at 8.5% while this was going on.) So this fund would have to climb to 50% to reach my target in three or four months.
The other fund was the Prudential Precious Metal Fund, and its entry level was set at 18.5%, and I had to reach 24% in the same period to reach my target.
However, I was not even close. The Prudential Natural Resource Fund went from 32.6% up to 75.2%.
The Prudential Precious Metal Fund went even higher, from 18.5% to a surprising 76.8%.
This was my second Slingshot, and on both occasions, I underestimated the force of the upward momentum, but again I was in the suitable funds.
August 1997
In August, I felt the markets were going sideways. We were heading towards Sept/Oct when markets became the most volatile as Pension funds, Mutual funds and corporations all made significant changes to their portfolios and markets if they were going to crash. This is the period when it happens.
The public is unaware of this and only sees that they are losing money and sell in a panic, not knowing the traditional Santa clause rally follows. But this year looked very negative. So we did the flight to quality and moved everyone 100% to Dividend funds.
January 1998
My headlines for the Bruce County Market Place Magazines said, “Be defensive in 1998”.
We were connecting the dots strategy. It helps us point out areas of concern and prevents significant losses. So in 1998, we moved into Balanced funds, Dividend funds and income funds. Unfortunately, our returns reflected our defensive position and were only 5%.
December 1998
I was in my second year at London Life, which had purchased Prudential of America the year before. This is where I was introduced to Segregated funds, which had some fascinating features.
Such as being credit-proof. Most people are not aware Mutual funds can be ceased by CRA even if they are invested in RRSPs. Then if they cease them, you have to pay the tax on them as they converted your money to non-registered.2007Another great feature was there is a guarantee at maturity of 10 years of your principle. Again Mutual funds do not have that feature.
But the biggest reason I was excited was that Segregated funds RRSPs and RRIFs had no rule on foreign content restrictions. We could transfer all our RRSPs and RRIFs to these segregated funds 100% and never worry about the Quebec separation again.
So this meant I could put all these funds into the same American fund we had at Prudential. This fund averaged 35% for the last five years, and I wanted to continue riding this trend.
So I moved $20 million to this fund for our clients.
The results by the end of December were 56.3%.
In the ten years that this was documented in the Bruce County Marketplace Magazine, my good friend Scott Maclean, who worked for me, decided he wanted to know the average return rate. To my surprise, it ended up being 24%, and he also pointed out Warren Buffet had an average of 23.7% in the same period.
I was told that working in a small town was not where I should be if I wanted to become more successful. I need to be in Toronto, so I moved my office to Richmond hill.
2000 to December 2006
This was when I moved my office to Toronto; I stopped recording my progress because I was no longer writing articles for the Bruce County Marketplace Magazine. I was working in Richmond Hill, and it made no sense to write articles up there. I also had not yet developed my computer skills. I was also growing my Business rapidly and had no time as I was also doing seminars instead, in which I was predicting a stock market crash like the 1929 stock market crash coming in 2010. (I missed it by 12 months but predicted it in the late 1990s, ten years before it happened).
But everyone kept putting pressure on me to start tracking our results again, and I was improving at using my computer and communicating with my clients down here. So I decided to listen to my clients and start tracking results again in 2007.
My intense research took me to the next level during this period of not writing articles. I became a Day trader in 1999 and turned $100,000 into $500,000 in one year. I thought I knew everything but lost $250,000 the next year because I married my stock. Lesson learned, no more emotional investing. I even stopped investing in individual stocks after seeing Nortel lose everything, and I lost all that money because I believed the analyst from the Bank of Montreal. I then decided to only invest in what I knew, funds. Even if you have a terrible day, funds recover, while stocks do not always; why take the risk? Even better, if you use Segregated funds, they have guarantees, while stocks and Mutual funds do not. The strategies I was using became better as my experience in using them got better. My in-depth knowledge was increasing, and so were the results.
Many clients say the same thing. I wish I had known you ten years ago. My answer is always the same “NO, YOU DON’T. I KNOW MORE NOW.”
2007
Harry Dent (a renowned market analyst) had predicted a banner year for 2007, but that never developed the way he envisioned as a war between Israel and Lebanon was ongoing, similar to what is going on in Ukraine now. Markets hate uncertainty and become volatile, just like today. This continued into August.
Fearing the markets were heading into the yearly correctional period of Sept/Oct when fund managers re-access their portfolios before the upcoming investment season (and sell their losers and stock up on investments that have already gone up. So that when you look at the holding, you think they have all the stocks I like, I should buy them. IT IS CALLED WINDOW DRESSING). Harry Dent told everyone to get out of the markets.
I served in the Canadian Armed Forces and have become a historian by default because of my Toy soldier collection.
Knowing that the Israeli Tanks were on the northern border of Lebanon near Syria and that the Israelis had come from the southern border meant they had already done most of the fighting. Therefore, only a mop-up was expected before peace was restored.
I expected this to happen within weeks; therefore, all the market uncertainty would dissipate, and a rebound (Slingshot) would occur. That is precisely what happened, the war was over, and the tension was too. In three short months, we gained 25%. We used the “Connecting the dots strategy” to accurately picture what was happening and not guess.
2008 The Global Financial Meltdown was when everyone went into selling mode and panicked.
Even Warren Buffet was down 61% and, the markets were all down 50%, we were down 25%, But I knew what was coming next and was excited.
Using connecting the dots again, I knew from experience that the Central Banks of all the world had their backs against the wall and the fastest way to restore order was to lower interest rates. So the stimulus package by the U.S to spend $85 Billion a month to buy back their bonds(shell game) to create liquidity was a bonus.
I knew the subprime rates caused all this, and the Banks needed an inflow of money to come in and pay for all those bad bonds they sold to the public.
I said in my seminars that the worse this gets, the stronger the Slingshot would be because the feds had their backs against the wall. The best way to do this was to drop the interest rates from 4 1/2% to 2 1/2%.
This would mean everyone with a loan would take advantage of the lower rates, go to their bank, and refinance their Mortgages and loans. They would be bringing Billions of new dollars to all the banks and adverting the Financial crisis.
But we were still down 25%, and everyone thought I was nuts as the mainstream media preached doom and gloom. I had Tony Sagami’s Nobel Prize formula and Warren Buffett’s experience to back me up as my experience from 1987 black Monday and the tech crash of 2000. Both spelled two words “STIMULUS PACKAGE.”
2009 was The year of the Slingshot that 84% of Canadians missed.
I predicted the date of the interest rate cuts, March 19th, 2009. My clients thought I was a genius, but the truth was this was the next Fed meeting, and that is when they said they would cut the interest rates.
I just connected the dots. I also stated that when they do this, a slingshot will occur and not only would we regain all the market losses and reach higher levels very quickly.
The Feds went way beyond what I thought and cut the rates by a complete 4% down to 1/2%.
This added tremendous liquidity to the markets and created one of the best slingshots I have experienced in my 30-plus years. Yet 84% 0f Canadians missed it because of the poor advice they were receiving and the negative news we were listening to. As a result, an opportunity of a lifetime was missed.
I had learnt from my studies of Warren Buffett that every time the market went down, it created an opportunity to buy good stocks at low prices. This is when the wealthy go fishing.
When I added Demographics and Connected the dots strategies, it showed a clear picture of what the leading stocks would be leading the Slingshot up; I wanted to ensure we were in the right place to make the most money. It is one thing to know that a slingshot is coming, but you also need to know where to invest in getting the best returns.
So using Demographics pointed me directly to the” BRIC.” Not the store but Brazil, Russia, India and China.
These are the final results for 2009 in those countries
Brazil gained 194 %.
Russia gained 179 %.
South Korea gained 139%
India gained 137.3%
Mexico gained 94 %
China gained 89.5 %
Our results were a staggering 84%, as we had 25% in both the U.S and Canada, which made 55% and 54%, respectively, lowering our total returns. But my clients were pleased.
2010 We once again “connected the dots.”
Because the U.S. deficit was getting out of control, 107% of its net GDP income and was spending $85 Billion per month to prop up the U.S. Banks after the Financial Crisis, it was causing uncertainty in the U.S .dollar and since the world trades in the U.S. dollar, Central Banks around the world started to buy Gold to protect their currency.
So this created an opportunity for us again, as we moved to Gold and made 45%.
The scary part was that our clients made 129% in the last two years and recovered all their money because we anticipated the Slingshot correctly; 84% of Canadians missed out on these rallies because their advisors lacked the knowledge to guide them accurately. And many people still rely on the mainstream media for their source of financial advice. So, will you miss out on a slingshot the next time after the market goes down?
2011 Was a year of losses worldwide because of the threat to the European Union. Fearing it would break up because Greece defaulted on their loans, many other countries were having similar troubles, too, like Portugal, Italy and Spain. So we ended up being down 15% for the year.
2012 Started off the same way, being down most of the year. But then Germany and France came to the rescue of Greece, and we ended the year with a 12.5% return. This was the start of a slingshot.
2013 Was the time to look at our “Demographics strategy,” Two significant areas of opportunity were starting to develop.
First was Japan. After reaching 45,000 points in 1989, the Nikkei dropped to 8,000 as the Japanese population aged and stopped spending and buying big-ticket items like homes and automobiles around 1991, driving the markets down.
But now, their sons and daughters were old enough to start buying homes and cars, which would complete David Foots’ best-selling book “Boom, Bust and Echo.” (Boom being Parents spending, Bust being parents not spending and Echo being their children spending and driving markets back up).
The Nikkei was about to boom again.
The other place of even more fantastic opportunity was Health Care. Every day we hear on TV how the U.S. had health care costs skyrocketing due to baby boomers ageing. But, we also heard about new drugs with beautiful effects. Viagra, for example, and the discovery of the Gnome and stem-cell research.
The internet was speeding up everything, and more and more development of all kinds of Health Care Research was happening everywhere. At the same time, Baby boomers were ageing and would cause a tsunami in Health Care demands over the next 20 years, and Demographics were pointing us to invest here, So we did.
By the end of the year, led by Health Care funds with a return of 51.49%, Japan was on its way to doubling over the next two years.
We finished the year up 28.9%.
2014
We kept all our investments in the same funds.
The Nikkei at the start was 8,000 when we started to invest there two years ago and was now approaching 18,000 points. At the same time, the Health Care Funds continued to grow at 33.4%.
So we made 27.5% for the year.
2015
We continued to stay in the same funds again as we followed the current trend. One of the things I learned from all those years of reading Financial Books was following the trends, which of course, tied into my Demographics strategy so well. A catchy phrase was, ” the trend is your friend, don’t fight the trend.
So while demographics directed us then, connecting the dots told me something negative was about to happen.
We were due a correction as we were up for 30 straight months without a healthy correction. I knew the Sept/Oct weak spot was coming up, and the new Feds general, Janet Yellen, wanted to make a statement for herself by raising interest rates. She was scheduled to do this in September.
Everything pointed to a correction to start in Sept. So we locked in our gains for the year in August and moved our funds to safety. We were up 16% at this time.
After the interest rate went up, we knew that November and December were the start of the buying season, and markets would be over the negativity of the interest rate hikes in September.
So we jumped back into the markets. 60% went into Health care funds which had returns of 51.49%, 33%, and 30% over the last three years. Demographics pointed out that with an ageing population, the demand for health care was not going to slow down.
We also invested 20% into Nasdaq and 20% into Asian Pacific funds, which helped us achieve a return of 22.5% by the end of the year.
This brought up our 9-year average return to 22% since 2006. This was also when I started writing articles again. As I stated previously, I understood the markets much better. When you include the 2008 financial crisis, the numbers are more impressive.
2016
This was the beginning of a turbulent time in America as the Presidential Race turned ugly, and we all know markets hate uncertainty. Plus, at the same time, Europe was dealing with Brexit ( Which was Great Britain leaving the European Union). These two incidents took away all the positive returns for the year that had built up previously.
Both Trump and Hillary Clinton attacked Obama’s healthcare plan. She wanted to change it, and he wanted to get rid of it. So the health care fund took a quick dive dropping 20%.
I have trained my clients that 90% of all corrections are caused by politics and only 10% by speculation. Once you correct the politics that caused the markets to drop, the markets will rebound. Warren Buffett always said, “take the emotions out of investing, and you will do better.” Especially if you have this knowledge.
The situation continued for the rest of the year as we waited for the turnaround and a slingshot. We ended up being down 16.5% in Health care Funds, but I was not alarmed since we made 124.49% in the three previous years. I knew Health Care demands were not slowing down. Our other two funds were positive and lowered our losses for the year to -9.5%.
2017
It started great as the new President Donald Trump kept his promise to sign the Keystone pipeline agreement, creating jobs and becoming less dependent on OPEC countries.
In the meantime, I switched funds from health Care funds to 80% Nasdaq and 20% Asian Pacific funds and India.
Our return for the Nasdaq was 27.24%, China 49% and India 28.2%. Trump’s economic policies had a major effect on the world’s economies.
December 3rd, 2018
Four issues causing the market’s grief were rising interest rates coming too fast. Trump was outspoken about how the feds were not helping the economy. They finally got the message, but the damage was already done.
The second was Brexit; those were minor compared to the other two.
The big one was the midterm elections.
The final one was the Tariffs on China that were about to increase to 25% from 10%. So we moved some funds back into Health care and our Dividend fund to spread out the risk and hopefully catch a racehorse on the way up.
Our return was a minus 3.88%
2019
Last November was the start of the Russian spy campaign, and the democrats won the mid-term elections in Congress. Soon as they got into power, their only plan was to take down President Trump.
Interest rates started to go up. The trade deal with China was put on hold, and then Brexit was causing issues in the EU. The mainstream media jumped in and started preaching we were headed into a market crash since the last one was back in 2008, and we were overdue.
What did I say?
I said the markets would soar and make close to 30% as they were not considering that the China trade deal was only being delayed and not cancelled.
Interest rates had peaked and not going to go up any further.
The Russian investigation was Fabricated by the Dems, who were proven to be the ones that did the actual spying.
But the big reason for my view of a massive return for the year was the Tax cuts to corporations.
That would reduce the cost of doing business. Those companies would not only create a better bottom line for themselves but create jobs, and this would also attract repatriation on companies coming back to the US like Apple, which was going to build a big factory in China but decided to build it in the US instead, creating more jobs in the U.S. Many other companies would do the same. The great repatriation had begone.
Here are the results of the funds as of December 31st, 2019, which we advised our clients to invest in.
Global Health Care Funds = 16.37%,
U.S Nasdaq = 35.23%,
Global Dividend Fund = 22.85%,
Asain Pacfic fund = 26.12%.
our total return was 29%
Since we had anywhere between 60-80-% in the Nasdaq depending on the client’s choices, we were close to my prediction. Main street media was wrong again.
2020
My prediction in March at the beginning of the lockdowns became a reality. We regained 100% of what the market had lost, 29.5% in April.
I did, however, say we would recover all our losses in 2 months, which only took three weeks.
The mass media was at it again, saying we were at the beginning of a new Financial Crisis, and so did the big Banks and other financial experts. Because of this, I spent $1,000 and placed a full-page article in the YORK MEDIA GROUP of magazines.
The second part, and by far the most important, is the slingshot that would be created by the stimulus package needed to offset the lockdowns.
So after we recovered our 29.5%, the Nasdaq went on to make a further 41%.
I even compared this to our slingshot in 2009, when we made 84%.
So many readers were ready to panic when the market dropped like a stone in March. The total recovery from top to bottom was 70.5%. Not quite 2009, but close enough.
Again if you need proof of that prediction, go to YORK MEDIA GROUP and ask them for a copy of their April 2020. Magazine.
A unique opportunity I saw with Canada Life proved to be a better choice for my clients. Canada life finally came out with a science and Technology fund for the first time.
As the Nasdaq had made an average return of 21% over the previous seven years, All the Canada Life agents were frustrated that they did not have this type of fund until November 2019.
I immediately remembered when I worked for Prudential Insurance in the 1990s and Recommended that they come out with U.S. and Global based funds so we could invest outside Canada when Quebec wanted to separate (you see that prediction above). Our results were outstanding back then, and I saw the same thing happening again.
So we suggested these funds, which made 52% from November 2019 to December 2020. That is an 11% difference because I “connected the dots.” The compound rate of return on this difference can be a significant bonus at retirement.
This fund did not slow down, as the total return from November 2019 to November 2021 was 72%
Again I want to remind readers that I no longer sell Insurance or investment products; I only advise as a consultant, which I am allowed to do as I spent 35 years in the Financial service industry.
