ORLANDO — The first quarter was a scary ride for most investors but those who stuck to a conventional ’60-40′ portfolio of stocks and bonds escaped relatively unscathed.
Having endured an energy price shock after Russia invaded Ukraine, rising interest rates and U.S. bond market plunge, and wild divergent swings in stocks and commodities, investors will be glad to see the back of the first quarter.
But the benchmark, long-term ’60-40′ equity/fixed income investment portfolio held up reasonably well. That’s because most of the pain came on the smaller bond side of the portfolio, and because the remarkable rebound on the larger stocks side late in the quarter significantly reduced overall losses.
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According to Barry Gilbert at LPL Financial in Boston, a simple portfolio weighted 60% the S&P 500 and 40% the Bloomberg aggregate U.S. bond index lost around 4% in the January-March period.
That was ‘only’ the 19th worst performance out of 185 quarters going back to 1976, when the aggregate bond index was launched. There have been 47 ‘down’ quarters in total, the worst of all in late 2008 when losses topped 11%.
The average decline of these ‘down’ quarters is around 4%, roughly where the portfolio will close the current quarter.
“The first quarter was a big shock for investors. But if you’re looking at 60-40, it’s not good, but it’s not horrible,” Gilbert said. “We’ve been a little bit spoiled by the long bull market in bonds and sometimes people forget that bonds have risk too.”
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Gilbert notes that the aggregate index comprising Treasuries, investment grade corporate and mortgage-backed bonds is down around 6%, on track for the third worst quarter since 1976. S&P 500 total returns are down around 2.5%
Other cuts of the U.S. bond market show the first quarter was equally bleak historically. The Bank of America Treasuries index lost 6% and the corporate bond index lost 9%, both the worst in at least 25 years.
Joe LaVorgna, chief U.S. economist at Natixis, notes that an index of the two-year Treasury note as measured by its weekly total return compared with a year earlier had its biggest fall ever, even worse than the bond market routs of the early 1980s and 1994.
Yields have shot up enough, and it may be time to buy.
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“A person of courage would get long the long end. The market is pricing in a lot of Fed tightening, probably too much. The slope of the curve gives me confidence that the front end will rally at some point. Perhaps sooner rather than later,” he said.
SHAFTS OF LIGHT
If the 60-40 investor is feeling any relief right now it is thanks to the rebound in stocks. As recently as March 15 the S&P 500 was down 14% year-to-date and on March 14 the Nasdaq confirmed a bear market, down 20% from its November peak.
The S&P 500 is back to within 5% of the all-time high it struck on January 4.
It was a similar picture globally. The MSCI World will end the quarter down around 4%, its worst performance since the pandemic crash two years ago. But it was also down 14% two weeks ago, and of the 47 negative quarters since the late 1980s, there have been 21 larger declines.
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Valuations have come down and are closer to – although still above – long-term averages, and history suggests that stocks typically rebound after the 10-year U.S. Treasury yield falls below the two-year yield, as briefly occurred on Tuesday.
Recession risks are undoubtedly rising and inverted curves across the rates and bond markets confirm that. But imminent contraction is not in the cards, giving investors scope to push equities higher.
“Overall we find too much negativity rather than too much complacency in markets, and stay with a pro risk stance in our model portfolio,” JP Morgan strategists wrote on Wednesday.
Analysts at UBS note that since 1965 the S&P 500 has returned an average of 8% in the 12 months following an inversion of the 2s/10s part of the U.S. yield curve.
Strategists at Truist IAG calculate that the average return is 11%, based on the previous seven inversions going back to 1978.
(The opinions expressed here are those of the author, a columnist for Reuters.)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
