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A View From Here February 2012

February 17, 2012 • Print This Article

"Be patient and persistent. Good things come in spurts - usually when least expected - and fidgety investors fare badly." - Charles Ellis

Whoa!
Just as we were digesting 2011, along comes January 2012 and produces one of, if not the best performance months ever for our investments. Most portfolios increased well into the double digits and are at, or within a narrow range of all-time highs. Not bad when you consider the prevailing feeling about the world-wide economy. The strength in our investments has been primarily driven by the augmentation of existing positions and new commitments made in the previous 6-months.

Patience
We have consciously been biased toward the Canadian technology sector over the past two years where we have found suppressed valuations, war chests of cash and double digit earnings growth. Despite this reality, their share prices have been ignored by market participants mostly due to lackluster share price momentum in the sector. It is interesting to note that there have been over ten buyouts in the space over the past year, which indicates to me that the smartest minds which represent the industry players are taking advantage of the low valuations. This observation is now being recognized in the public markets as technology analysts have been telling me that many institutional clients are warming to the idea that these companies are worthy inductees to their portfolios.

That is why having a Variant Perception of each investment is important. If corporations whose favorable business conditions are not given their due by market participants, then we want to know why. If our research reveals that this anomaly is a mistaken or apathetic view, then we begin to take an investment position and look to add to it into strength of the underlying business as it is revealed over time. Our goal is to ultimately profit when things change and the business becomes recognized…which often occurs in a relatively short period of time.

TSFA & RRSP
We remain focused on RRSP's and Tax Free Savings Accounts (TFSA) in 2012. You can put another $5,000 in Your TSFA in 2012. The total amount you can put in a TSFA is $20,000 (provided you were at least 18 years of age in 2009). TFSA's are popular as there are no taxes on withdrawals of cash.

Even so, RRSP's offer advantages that TFSA's lack. One is that you get a tax deduction on contributions to your RRSP. Provided you pay a lower tax rate in retirement than during your working years, you'll cut your tax bill. A second advantage with RRSP's is that you're unlikely to withdraw the money until you retire - since it will add to your taxable income. This lets your RRSP compound. TFSAs, by contrast are more likely to get raided and stop compounding. It's best to make use of both, but don't give up on RRSPs. We see it as your life insurance….money that you will use in your lifetime.

Hennick Wealth
As you might have seen from our email tags, we have rebranded our practice under the name of Hennick Wealth - Your Future is Worth More, with a new website where you can access archived newsletters and see client testimonials, stock quotes and financial quotes. We would encourage you to let us put up a testimonial by simply emailing it to us. It will remain anonymous. Our website is www.adamhennick.com

We have engaged in a social media campaign and you can follow us on Twitter, Tumblr as well as Linkedin and Facebook where we post a blog on a weekly basis. We encourage you to join and follow us.

Performance
We have culminated the performance numbers until the end of January 2012 for your accounts and are happy to forward you copy. Please contact myself or Afsi and we will forward it to you.

Lastly, we are looking to expand our practice and if you are interested in consolidating your other investments with us, we would be happy to speak to you about it, or if you know of anyone who wants experienced investment advice, please let them know! We appreciate it!

Have a great family day weekend...

All Good Things!

Adam

Filed under: Uncategorized

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital Corporation ("MRCC"). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member-Canadian Investor Protection Fund / member-fonds canadien de protection des épargnants.

Mackie Research Capital Corporation (MRCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRCC website please understand that it is independent from MRCC and that MRCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRCC.

 

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