E41: Second Quarter Letter 2024 - Financial Literacy Edition

Foreign. This podcast is brought to you by Gensler Wealth. The information discussed today is meant to be general in nature and not tailored to your specific investing circumstances. This means that you should talk to your regular Gensler wealth advisor or your own advisor before acting on any information we discuss today. Nothing in this podcast is intended to be a solicitation and past performance does not guarantee future returns. While I know school is out for summer, I apologize in advance as this episode will take you back to school for some financial literacy education. Today on the Unlimited Podcast I read my second quarter 2024 letter to clients. We talk financial literacy, the concept of needs and wants, and even get some Coldplay lyrics. Let's go Sam hi everybody. Welcome to the Unlimited podcast. This is what I do four times a year, which is read my quarterly letter to our clients for those who want to listen rather than spend the time reading the letter directly, which I think is perfectly wonderful. So we're going to start with the 2024 second quarter client update. We call it the Financial Literacy Edition and I'll say at the beginning so I won't say at the end. There's some charts, there's some photos and stuff in here and there's also a whole bunch of footnotes. Everything's available on our website genzler wealth.com insights or ginslerwealth.com you'll find it. Take a peek around while you're there. Actually some fun stuff. And here we go to Gensler Wells clients A few weeks ago I experienced what all financial advisor parents dream of. I came home to find my Youngest Daughter's Grade 8 Financial Literacy Test on the dining room table. She had earned a mark of 95%. I couldn't be prouder and thought about ordering Gensler wealth business cards for her right away. And again there's some I said I wasn't going to do this, but there is a little picture of Penny's financial literacy test and her grade and a couple questions there. You should go check it out and read it. Well, I might have gotten ahead of myself. Later that day my wife and kids were going to Walmart to pick up a few things they needed. Recalling the financial literacy test topic of needs versus Wants, I reminded Penny that while she is shopping to truly focus on buying what she needs rather than everything she wants when she is in there, Penny looked at me stone faced and said, I need what I want. Well, I guess I won't be ordering those business cards just yet. The stock everybody wants. As we hit the mid year mark of 2024, the US stock market as represented by the S&P 500 Total Return Index has continued its positive run up just over 15%. This is a fantastic six month return, more than a typical investor would need to prudently grow their wealth. And in brackets here, to be clear, this is a simplified example. As you know, your Kinsler wealth portfolios are far more diversified than having exposure to a single stock market. Our Canadian equity market as represented by the s and P TSX 60 Total Return Index has returned a fine but relatively underwhelming 4.9% so far this year. And there's a chart in here that shows the US equity market performance of up 15%. However, the stock everyone wants is Nvidia, which is up over 150% in 2024 and which briefly became the most valuable company in the world with a market value above $3 trillion. In fact, it is important to note that Nvidia alone is responsible for approximately 30% of the S&P 500's gain so far this year. And then we have the chart of the S&P 500 versus Nvidia and that 15% of the S&P 500 so far this year looks basically like a little straight line compared to Nvidia's up 150%. Nvidia is a fantastic company that is powering the current artificial intelligence revolution. Most of our clients will have exposure to Nvidia through the broad market equity holdings in your portfolios. But we always caution investors having too much exposure to a single equity or any investment for that matter. Needs Based Financial and Investment Management this is because our role as your financial and investment advisor is to approach the management of your wealth from the lens of needs as opposed to wants. Our clients do not need 150% six month returns, nor do they want the corresponding risk that comes from striving for that level of return. In fact, most of our largest families ignore individual stock or stock market performance and focus instead on the performance of their diversified portfolios which target steady growth at a rate meaningful to their specific circumstances and needs. This is because they understand that meaningful wealth is typically created by operating and growing businesses or professions they control rather than by picking the day's hottest stock. And staying wealthy happens through prudent investing and prudent management of their financial and tax affairs. School's out for summer when you try your best but you don't succeed when you get what you want but not what you need. Coldplay song called Fix you Speaking of tax affairs, the Coldplay lyrics above sum up our current liberal government's approach to fiscal management, the prime example being the recent increase to the capital gains inclusion rate. As you know, we spent a significant amount of time this past quarter reviewing these changes and taking action in your portfolios with the goal of reducing the overall tax liabilities that these changes could create. Listen to the unlimited podcast episode Federal Budget Breakdown featuring tax expert Ali Spinner to get a refresher on what changed. While the government wants the wealthiest Canadians to pay just a bit more, as it did in 2016-2017-2019-2021 and 2023, what it actually needs are taxation and other policies to encourage investment and productivity. No less an authority than bank of Canada Governor Tiff Macklem said just last week, and there's a link in the letter to the article Figuring out how to make Canada a better place to invest is critical. Increasing taxes on the fruits born from investment surely won't accomplish this. While school is now out for summer, perhaps our country's leaders could brush up on their financial literacy education as well. What Gensler Wealth Needs this past quarter, Gensler wealth was pleased to be named by Wealth Professional, a publisher focused on the Canadian wealth management industry, as an Excellence Awardee in the category of Holistic Advisory Team of the Year and a five star wealth management firm. A listing of some of the best wealth management firms in Canada. Most firms want industry accolades, but we prioritize your satisfaction above all. At Gensler wealth, our main focus is ensuring you are happy with the service we provide. While industry recognition is nice, our greatest need is knowing that we've done a great job for you. Have a wonderful summer. We hope you get to enjoy both what you need and what you want. Thank you for your trust, support and confidence. We are available 24. 7 should you need us. Sincerely, me, Brian Gensler, President and CEO well, that's the 2024 Q2 letter. We've got a couple really exciting podcasts coming up. I won't reveal what they are just yet, just in case schedules change, but look out for a big heavy hitter in the private equity space in Canada. We'll hopefully learn some life lessons and another fun one coming up later this summer or early fall. Thank you. As always, keep listening and we'll see you soon. Bye bye.

The Unlimited Podcast is hosted and produced by Brian Ginsler and is edited and mixed by myself, David McMillan. This podcast is not to be taken as investment advice. If you like what you heard, don't forget to rate the podcast and follow us on social media inslerwealth thanks for listening and see you next time.

Sam.