S1E2: Fourth Quarter Letter 2021

Foreign. Disclaimers here this podcast is brought to you by Ginsler 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 if you have one, before acting on any information we discuss today. Nothing in this podcast is intended to be a solicitation and past performance is not guarantee future returns. Nailed it again. Let's get going. Welcome back to the Gensler Wealth Unlimited Podcast. Today we are getting a review of our 2021 Fourth Quarter Letter to clients that we sent out in January of 2022. We talk about uncertainty how to build a Goldilocks portfolio in digital asset activity Let'. Foreign. 2021 fourth quarter client update January 2022 to Gensler Wells clients, the new Omicron variant was certainly an unwelcome and perhaps unexpected holiday development. I do hope the holiday season found you and your loved ones happy and healthy. Uncertainty is the only thing I know with certainty. That's a quote in this letter. With the arrival of the end of the calendar year comes the requisite financial and market forecasts for the new year. On Dec. 30, 2021, the Globe and Mail ran two articles, one directly on top of the other. The first, written by my dear friend David Rosenberg entitled here's what Investors should expect in 2022, details the potential for a 30% equity market correction. The second, written by BMO Capital Markets Chief Investment Strategist, was titled why the Bull Market Will be Alive and well in 2022. Its content is self evident by its title, which of the above will prove prescient? I don't know. Nor can I identify the best forecasts from the many other experts who have weighed in. So instead of trying to be right at Gensler wealth, we aim to be prudent because the only thing I know with certainty is that there are uncertain roads ahead. We build your portfolios by incorporating a variety of investment strategies with the collective goals of both reasonable performance and commensurately reasonable downside protection. To be clear, the other thing of which we are fairly certain is that over the longer term, equities will remain the best performing asset class and will always be an important and sizable component of most clients investment portfolios. However, the cost of achieving higher returns through equities is always their accompanying volatility. So how do we strive for equity like returns while aiming to protect capital? Among others, we do so in a number of ways. 1. Investing in exchange traded funds for extremely low cost, broad market exposure, no capital protection component here 2 selecting equity managers that use a variety of strategies to hedge market exposure and reduce volatility 3. Utilizing equity managers with strategies that focus on dividends and income 4 allocating capital to hedge funds that aim to take a market neutral approach to investing and five Finding managers with unique and often non or less correlated investment strategies. As an example of the last approach, we have recently begun allocating capital to a specialized SPAC special purpose acquisition Corporations arbitrage strategy. We believe this strategy is unique in that it has a track record of delivering equity like returns with principal protection qualities, low downside volatility and low correlation to equity and fixed income markets. In fact, to date 99% of the fund's closed positions are have resulted in positive realized returns. We believe this strategy's long term target return is between 8 to 10%. As an added benefit due to our scale, all Gensler wealth clients, regardless of the size of their allocation, are able to invest in the fund's lowest fee class. In a recent Globe and Mail piece entitled How SPACs can tone down your risk, Larry McDonald writes on this type of strategy and I quote buying and selling pre acquisition SPACs can be a virtually riskless way to earn positive returns in bull and bear markets. Our job, as always, is to find the managers with the experience to execute well how to Build a Goldilocks Portfolio this past quarter a new client asked us to build a portfolio for his family with the following characteristics limited direct equity exposure, high single digit target returns, tax efficient and downside protections. While we thought of calling this portfolio the Unicorn Portfolio, given the difficulty in finding such a magical collection of investments, we ultimately named this portfolio the Goldilocks Portfolio. By mixing a few asset classes that is not too much, not too little, just right with the goal of achieving the client's objectives. The resulting portfolio blends an income oriented equity strategy with hedging capabilities, the SPAC strategy mentioned above, a venture debt strategy closed to most outside investors, a market neutral hedge fund also closed to most outside investors and a long short public real estate focused investment strategy. We utilize the families registered that's Non taxable accounts to hold the income producing securities while keeping capital gains oriented holdings and taxable accounts. Through a combination of asset allocation, security selection and asset location decisions, we believe we have built a portfolio that meets the client's needs. We will be reaching out to all clients as part of our normal portfolio review process and we'll be happy to discuss this Goldilocks portfolio in more detail. Incidentally, this past quarter we reviewed upwards of 40 or so additional investment strategies and ultimately made allocations to two new strategies, both of which we have known and followed for many years. The bar remains high Digital Asset Activity we remind you that digital asset exposure generally only comprises a very small single digit proportion of our clients or where applicable, investment portfolios. However, we continue to spend a disproportionate amount of our time and energy on the space. We remain bullish on the long term outlook for digital assets broadly and the underlying technology more specifically. This was a particularly active quarter for Gensler wealth in the following ways. 1. We worked with Digital Asset Council of Financial Professionals to bring its certificate program to Canadian advisors at a special Gensler wealth discounted price. We believe it is incumbent on financial advisors to truly understand this space. This goes for the media as well. By the way, prior to making client recommendations, I was also featured on Digital Asset Council of Financial Professionals TV DACFP TV where I discussed Gensler Wealth's approach to digital asset investing. There's links to all these on our website, by the way. 2. We spent an extraordinary amount of time performing due diligence on a Singapore based digital asset fund manager due to the 12 hour time difference. This included many late night zooms with the company when we say we search the world for investment strategies for our clients, we really mean it. The core strategy that we have begun allocating to returned 295% for the year through November 2021. While we do not expect this level of return to be repeated, we are confident that we have found a group that are truly experts in this space. Number three. Finally, we were pleased to get clients access to participate in a highly oversubscribed private investment in Signum bank ag, the world's first fully regulated digital asset bank, alongside other major international investors. You can read the announcement and company press release by finding this letter on our website www.genslerwealth.com Digital asset investing is not appropriate for all clients, but we are always available to discuss the asset class with you as we begin 2022. I'm hopeful that the end of the COVID pandemic is in sight as we learn to live with whatever variant or variation of the virus remains. From a financial perspective, I'm hopeful that world economies will remain resilient. Most of all, I'm hoping that you and your families are and will remain happy and healthy. But in these uncertain times, hope is not a strategy. We will remain unrelentingly focused on managing your wealth and investments carefully and prudently because unfortunately, we can't forecast the future. Thank you for your trust, support and confidence. We are available 247 should you need us. Sincerely, me, Brian Gensler that was our Client Quarterly letter for the fourth quarter of 2021, released in January of this year, and little did we know how much the world would change just shortly thereafter. Stay tuned for more thoughts from Gensler. We.

This has been a Gensler Wealth Audio production. The unlimited podcast is hosted and produced by Brian Gensler and edited and mixed by Katherine Donville. Always remember that past performance is not indicative of future returns. If you're interested in hearing more from us, please like subscribe and give us a five star rating and follow us on all social media. We can be foundslerwealth See you next time.