REVIEW & COMMENTARY
1st QUARTER - 2021

Unhappy COVID Anniversary

Just over a year ago Canada recorded its first COVID related death. More than a year later, COVID ‘exhaustion’ is becoming a new, equally threatening variant, as citizens and their political leaders struggle to deal with the pandemic. Governments reverse course far too frequently and Ontario appears to be ready to enact their second State of Emergency.

With almost 20% of American adults fully vaccinated, the light at the end of the proverbial tunnel is starting to brighten. The relative toll has been significant with almost 560,000 US deaths and close to 31 million cases. The Biden administration is well beyond lip service combating COVID and is rolling out vaccines at an inspiring pace. On the other hand, Canada’s inoculation pace lags every G8 country. Ontario proudly boasts its COVID rules, namely lockdowns, as among the most stringent worldwide. While this is positive in one light, the economic strain increases. Ontario is presently in its third wave and stricter regulations are imminent. It is easy to criticize and undermine government action however there seems to be one simple rule that, if followed, may have been far more effective at dealing with this problem; harshly punish those who violate the rules. There are far too many examples of low compliance by big (primarily international) box stores, and flagrant disregard by a relatively small group of individuals. While the following percentages are not scientific but more for general illustrative purposes, 95% of the population is being punished for the 5% of those who shamelessly disregard the community at large.

Over the past quarter, investors returned to more traditional sectors. Energy was the leading sector in the past quarter. Financials, also had double digit quarterly gains providing decent back to back quarterly returns for the first time in a while. Even the Real Estate sector had another decent quarter. More cyclical names attracted increased attention as the prospect for a return to more normal levels of economic activity improved. This, in turn, pressured bond yields higher as the fixed income markets posted a quarterly loss.

With the third wave and new variants to combat, it is hard to predict what lies ahead in the second quarter however, we do take comfort that the markets are embracing a more traditional style of investing. Many ‘traditional’ companies, among them BCE, Enbridge, CN Rail to name a few, have increased their dividends recently. Importantly, financial regulators appear to be willing to lift the restrictions on the companies they oversee which should lead to potential stock buy backs and, important to us, dividend increases for many of the companies in the sector.

As vaccinations continue to be rolled out to the general population, we believe the financial and economic light at the end of the tunnel will continue to brighten and feel increasingly comfortable with our predictions from the beginning of the year.

Stodgell Investment Management Ltd.


For a printable copy of this quarterly review, please CLICK HERE. The report is presented in Adobe Acrobat format.

PAST QUARTERLY LETTERS:

Past quarterly letters are available in Acrobat format by clicking the links below.

Fourth Quarter 2020

Second Quarter 2020

Fourth Quarter 2019

Second Quarter 2019

Fourth Quarter 2018

Second Quarter 2018

Fourth Quarter 2017

Second Quarter 2017

Fourth Quarter 2016

Second Quarter 2016

First Quarter 2016

Third Quarter 2015

First Quarter 2015

Third Quarter 2014

First Quarter 2014

Third Quarter 2013

First Quarter 2013

Third Quarter 2012

First Quarter 2012

Third Quarter 2011

Fourth Quarter 2010

First Quarter 2010

Third Quarter 2009

First Quarter 2009

November 2008

Second Quarter 2008

Fourth Quarter 2007

Second Quarter 2007

Fourth Quarter 2006

Second Quarter 2006

First Quarter 2006

Third Quarter 2005

First Quarter 2005

Third Quarter 2004

First Quarter 2004

Third Quarter 2003

First Quarter 2003

First Quarter 2021

Third Quarter 2020

First Quarter 2020

Third Quarter 2019

First Quarter 2019

Third Quarter 2018

First Quarter 2018

Third Quarter 2017

First Quarter 2017

Third Quarter 2016

Fourth Quarter 2015

Second Quarter 2015

Fourth Quarter 2014

Second Quarter 2014

Fourth Quarter 2013

Second Quarter 2013

Fourth Quarter 2012

Second Quarter 2012

Fourth Quarter 2011

Second Quarter 2011

First Quarter 2011

Third Quarter 2010

Second Quarter 2010

Fourth Quarter 2009

Second Quarter 2009

Fourth Quarter 2008

Third Quarter 2008

First Quarter 2008

Third Quarter 2007

First Quarter 2007

Third Quarter 2006

Fourth Quarter 2005

Second Quarter 2005

Fourth Quarter 2004

Second Quarter 2004

Fourth Quarter 2003

Second Quarter 2003

Fourth Quarter 2002

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