For the first time in history, the governments shut down the economies across the world and only allowed business that they deemed essential services to stay open. While everyone was sent home, the markets were deemed as an essential service and stayed open over this pandemic time frame. We have also been

introduced to new social norms which involve social distancing, wearing masks, following direc-tions on grocery store floors, and not touching anything in a store unless you are going to purchase it or use it.

Since the markets remained open during this time, we saw at the end of the first quarter where markets hit the lows, and after all is said and done, the peak to trough decline for the markets was approximately 40%. From those lows we saw indexes begin to rebound as governments around the world began to step in and provide stimulus in many dif-ferent forms to their economies. With two weeks of shut down in Quarter 1 the analyst shrugged off all earnings misses, including the revised earnings, and the markets began its unprecedented recovery. Also, a large majority of companies pulled guidance for 2020 due to the pandemic and the unknown length of the government shut downs.

In our portfolios, we continued to make moves, and one of the

moves we have made in the last half of March where we sold PYF and ZPW out of all our portfolios and replaced it with TD bank. Both ZPW and PYF went down approximately half of what the market did, while TD pulled back close to what the market did during the down turn. When look-ing at TD bank the capitalization of TD bank was strong, had strong cash flow to continue pay their dividend, and would be able to survive the global shut down. We believed that if the market were to rebound, we would get more upside with TD Bank than the two exchange traded funds. The price we were able to get in at TD was paying a 6% dividend yield and because of that we were comfortable to continue to hold it if the market was to continue to go down.

Going forward, the second quarter’s earnings are going to go down as one of the worst earn-ings periods in history. However, this information is not a secret, and I believe that the market is going to disregard the results and

continue to concentrate on how the economies are doing while opening up. While the market is a forward-looking mechanism, we are going to have to wait for third quarter results to really see how companies are doing. The same goes for the economy as it should be in those results when we get a true first figures of the new social distancing economy. We still re-main cautious in all our portfolios and our asset class diversification continues to provide protection to the portfolio as we managed to avoid 63% of the stock market decline during this time.

Stay safe

PWMPILLARS

NEWSLETTER • JULY TO SEPTEMBER 2020

PWM Quarterly UpdateYour Personal Portfolio Managers: Kevin Haakensen, CFA & Kevin Hegedus, CIMHollisWealth, a division of Industrial Alliance Securities Inc., PWM Private Wealth Counsel Insurance Advisors, Hollis Insurance*

“Life will give you whatever ex-perience is most helpful for the evolution of your consciousness.” – Eckhart Tolle

SEAN MESHKE, CFA, Portfolio Manager

PWM Private Wealth Counsel, HollisWealth, a division of

Industrial Alliance Securities Inc.,

Insurance Advisor, Hollis Insurance*

ADMIN UPDATEPAGE 2-3

INSURANCE UPDATEPAGE 6

AWARDSPAGE 3

PLANNING WITHDRAWLS PAGE 5

PWM PILLARS

ONLINE TRANSFERSAmong the options for depositing or contrib-uting money to your investment accounts with PWM is the ability to transfer money to your account digitally via online banking. For those who are familiar with this process, it can be a very convenient way to ensure your funds get to us, without the hassle of mailing a cheque. This is the process you would follow:

1. Log into your online banking account;2. Go to Add Payee or Add Bill;3. Search for HollisWealth;4. Select the version of HollisWealth – Indus-

trial Alliance Securities that is available to you. NOTE: do NOT use HollisWealth Advisory Services as this is a different branch of the company, and will result in a delay in seeing your funds arrive in your account!). Please be aware that the naming ideology for this selection is at the discretion of each banking institution, and we are unfortunately not able to ensure that they are consistent when adding this payee name. We are also not privy to what each bank chooses to use;

5. Add your account number with no dashes;6. Enter the dollar amount you wish to trans-

fer; and

7. Let your advisor know so we can watch for it. PLEASE ensure that this last step is taken care of, as we have no way of being made aware of when your funds are posted to your account other than looking for it. If we do not know to look, it may take a full realignment cycle before smaller balances are able to be invested and working for you!

ANNUAL ADMINISTRATION FEESTrustee services are a mandatory function of all registered plans. Trustees operate inde-pendently from organizations issuing or selling investments typically and provide on-going tax reporting between you and CRA. Your June Statement will provide information on your payment options. The best way of paying the fee is directly from your plan as it is effec-tively a tax saving because you pay in dollars that have not been taxed. Your payment is not treated as a withdrawal when paid within the plan. Payment will be processed in June 2020. You can also pay via cheque, or via online banking by adding us as a payee, if you do so before that date. Both of these methods will be considered a contribution to your plan, in addition to paying your fees.

RESP WITHDRAWALSJust a reminder to our valued clients of the requirements for withdrawing RESP funds from an existing account:

Proof of enrolment, which may be in the form of an invoice, a letter of enrolment (NOT a letter of acceptance), or a schedule of cours-es. It must contain the beneficiary name, the name of the institution, the semester they are enrolled in and the status of the course (full-time or part-time). Please note, any proofs of enrolment submitted without these particulars will be rejected by our head office and will result in a delay in the funds getting out to you!

Remember also that you will need to allow time for the necessary sells in the account to settle before funds may be sent out. Please note that the RESP contribution deadline is December 31 of each calendar year, though room can be carried forward into future years if not used.

ADMINISTRATION/HOUSEKEEPING NOTES

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TFSA CONTRIBUTIONSCanadian residents who are 18 years of age and over are permitted to contribute up to $5,000 each year from 2009 to 2012 inclusive, $5,500 for each of 2013 and 2014, $10,000 for 2015, $5,500 for each of 2016, 2017 and 2018, and $6,000 in 2019 and 2020 to a TFSA. Any income earned inside the TFSA is completely tax-free. If you have made withdrawals from your TFSA in 2020, you will need to wait until 2021 to deposit those funds back into your TFSA in order to avoid any penalties for re-de-positing the funds too soon.

** Please note: Available room is carried for-ward should you not contribute the maximum.

You should always verify how much you have contributed to your TFSA before making additional contributions through CRA directly, as they alone have access to all of the TFSA information filed by SIN. This will avoid penal-ties from CRA for over contribution, which can be substantial.

REGISTERED RETIREMENT SAVINGS PLANS(RRSPS)The deadline for RRSP contributions may seem a long way off right now, as you can still make RRSPcontributions for the 2020 tax year in the first

sixty days of 2021. This is just a friendly re-minder, now that tax season is over, to take a look at your contribution room, and determine how much (if any) you wish to contribute for the 2020 tax year.

“Earn you success based on the service to others, not at the expense of others.” – H. Jackson Brown, Jr.

First off, Kevin Haakensen, Portfolio Manager has been named as a Finalist for The BlackRock Award for Portfolio/Discretionary Manager of the Year by Wealth Professional. This is a very prestigious award and even being nominated is no small feat. Typically, the award ceremony is in late June, but has been postponed to late September.

Secondly, Riley Sittler, Investment Advisor was named as a Top 4 Finalist for the PlanPlus Global Awards program. This organization anonymously reviews financial plans created by advisors across the world, and Riley’s plan was selected in the Top 4 in Canada. Congratulations Riley!

Lastly, we are honoured to have been named as the Consumer Choice Award winner in the Financial Planning Consultants category for the 10th consecutive year. With the ongoing closures and restrictions of events, there will be no Celebration this year, but we are honoured nonetheless.

RECENT AWARDS & RECOGNITIONIn the first portion of 2020, our team has been recognized in a few different ways.

PWM PILLARS 3

April Seitz, Investment Advisor, and her husband Jordon, welcomed their first child, their daughter Payton on April 13, 2019. April went on maternity leave in April 2019 and returned to work in January 2020.

Holley Frost, Associate Investment Advisor, has been away from the office since November 2019 on maternity leave as her and her husband Brayden, welcomed their first child, their son Hunter David Oakley on November 19, 2019. Holley has been enjoying her maternity leave and is happy spending time with her family!

Chris Kostyk, CPA, Investment Advisor and his wife Kendra welcomed Harper Adelaide on July 29, 2019. Ironically, their son Oliver was also born on July 29, 2 years prior!

Harper and Oliver

PWM PILLARS

Payton

PWM Team Update

Hunter

Leslie Wong, Associate Investment Advisor, celebrated his marriage to his new wife Gillian Barker on May 15, 2019. The ceremony was held next to Kinbane Castle in Northern Ireland giving them an amazing backdrop!

Our team here at PWM Private Wealth Counsel is composed of people at all stages of life and we thought we would share some updates on some important events in their lives!

Katy Chudskov, Executive Assistant, also celebrated a marriage in the past year to her now husband Fred Chudskov here in Saskatoon at the Greenbryre Golf & Country Club on June 8, 2019. Sadly, their honeymoon plans were cancelled due to recent global events, but her and Fred are planning for their European vacation in the future.

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PWM PILLARS

In 2007, just before the last global financial crisis, finance professor, writer and former stock trader Nassim Nicholas Taleb popularized the notion of “black swans”, extremely rare events with catastrophic consequences that are virtually impossible to predict and that don’t normally find their way into analysts’ projections.

The COVID-19 pandemic is, of course, a textbook example of a black swan and we’ll be living through its effects for the foreseeable future.

But while black swans are unpredictable, developing a well-constructed, dynamic financial portfolio with checks, balances and contingencies that can mitigate crises like this is really where an advisor is worth his or her weight in gold. That’s particularly true if you’re a retiree or about to retire and planning to live off your hard-earned investments – or even if you’re simply saving for a down-payment on a cottage, a renovation or a big-ticket item and expect to make withdrawals from your investment savings in the short term.

Here are a few lines of attack you and your advisor should consider if you need to draw money in this difficult market period:

WEDGES AND MORE WEDGESIn a nutshell, a cash wedge is a strategy for keeping a portion of your portfolio in cash and high interest savings – to provide comfort during high volatility. Your wedge depends on your spending habits and the level of wealth and assets in your portfolio. (A good rule of thumb is to have at least two years of safe withdrawal sources as a wedge.)

But, while cash is an important component of any portfolio – it can be beneficial to have some “dry powder” during certain phases of the market cycle – in a market upturn or in the low-interest environment we’ve had for a decade holding large cash reserves can create a drag on your portfolio.

That’s why we’re fans of an alternative to the standard wedge strategy: the not-very-creatively-named “alternative wedge”, which

involves holding assets other than traditional bonds and equities, so-called alternative assets.

ALL ABOUT ALTERNATIVESThe basic rationale for alternative investments is as a hedge to short stocks – where going short means earning positive returns as a stock value declines or markets are retreating. For instance, we own four strategies in this space throughout the portfolios we manage, the largest of which held up almost 5% on the stock market lows reached on March 23, compared to major markets, which were down around 35% on that date.

Now, you may be thinking: but how do alternatives perform when the market heads back up?

This really hits home why, when adding defense into a portfolio, it’s important to own a variety of these assets as opposed to no- or low-return cash. While it’s true alternatives won’t capture 100% of a market’s upside, they can net out 60%+ and, with the strong capital protection in large market drawdowns and potential for decent returns when markets are heading north, that risk/reward tradeoff through a market cycle is very favourable.

Back to wedges and withdrawals, this all underscores why an alternative wedge can provide a healthy portion of “spendable” money when markets are acting erratically – like now. Hedging and alternative investments reduce the harm to a portfolio that can result when an investor needs to withdraw cash and is forced to sell good quality stocks that are down, say, 35%.

ONE MORE ALTERNATIVEPrivate debt is another alternative worth considering. This specialized investment, which includes funds that may supply loans against business equity, property and other assets, is a great complement to traditional fixed-income and offers the potential for high yields.

It’s one area, however, where there cannot be too much due diligence – for some so-called diamonds in the rough, we find many

don’t have proper risk controls in place. Nevertheless, up to 20% of our portfolios include private debt. In terms of cash distributions, it’s worth noting that many private debt assets can only be sold monthly and take up to 90 days to receive the cash, so good planning is crucial.

SUSTAINABLE CASH FLOWSSpeaking of withdrawing cash, one of the other best ways to reduce pressure on portfolio draws in times like this is to make sure your portfolio is set up with sustainable cash flows. If the majority of a monthly payment can be met with cash generation from your holdings it means you’ll need to sell fewer assets at reduced values.

With dividend-paying equities, exchange traded funds (ETFs) and even private debt, as long as you (or your advisor) is doing good homework, buying quality companies with negligible bankruptcy risk and sustainable dividends is the key in this space. I can’t stress enough the importance of not chasing high-dividend payers – these companies too often get into financial trouble and slash or eliminate their dividends at exactly the time you need it as an investor.

Finally, structured notes – which consist of underlying assets and benchmarks like market indices, equities, fixed-income products and foreign exchange rates – are another vehicle that offers potentially attractive distributions even if your principal is tied up for several years.

While I’ve mentioned a lot of ways you can continue withdrawing cash during volatile times like the one we’re living through, leaving cash available is also a good idea. It can provide your financial advisor or portfolio manager with the flexibility to make additional investments in good quality stocks other investors had to sell when they threw the baby out with the bathwater during recent market dives. These quality stocks are often good long-term buys with potentially outsized returns.

Planning for Withdrawals While Preparing for the UnpredictableKevin Haakensen, Portfolio Manager, PWM Private Wealth Counsel, HollisWealth®

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Insurers are implementing special processes for your new business and in-force policies in response to COVID-19

FOCUS ON NON FACE-TO-FACE APPOINTMENTS IS KEY.The main insurance carriers in Canada offer the ability to complete insurance application without having to meet face to face with clients. This combined with the various electronic/web-based applications, allows for insurance application to be completed during our time of isolation.

The insurance companies are also changing the need to collect fluids and have a paramedical nurse visit the client. Tele-Interviews are being used to collect the medical information required.

Most companies have the ability for e-signatures and other forms to be transmitted electronically.

PREMIUM PAYMENTS Most annual insurance premiums can be made through one’s online banking.

Some clients are choosing to change to monthly premium payments this year to spread the cost out.

Another key move recently is that many insurance companies are allowing for premiums to be deferred for up to 90 days

for anyone who is in financial difficulty due to COVID19. The key word is “defer”; premiums will still need to be paid but it allows for basic needs to be paid for in the short term.

Some Examples:

DESJARDINS - Life, DI and CI – 90 day premium deferral if financially impacted by COVID-19

EMPIRE LIFE - Grace Period extended to 60 days from 30 days

IA FINANCIAL - clients can contact our customer service to request a 90-day premium deferral

MANULIFE - Grace Period extended to 90 days from 30 days

SUN LIFE - Clients can request to defer individual life and health insurance premiums for 90 days

Even in these incredibly worrying times, it is important to move forward with the plans for the future, including our insurance. The insurance is an integral part of this plan and is there to protect against unforeseen obstacles.

Be assured the team at PWM Private Wealth Counsel are here to help you in any way we can. Even though we are self isolating, technology is allowing us to continue to stay in touch. We are using screen sharing software and the telephone to conduct meetings.

Need a hand, please call us (306) 975-9500.

What are the Canadian Insurers providing to help advisors and clients?

“We spend precious hours fearing the inevitable. It would be wise to use that time adoring our families, cherishing our friends and living our lives.” – Maya Angelou

As the world around us continues to adjust, so have we at PWM Private Wealth Counsel. In any given year, we will host 2-3 educational seminars on a variety of topics to keep any interested investors informed about the ever-changing economy and the strategies used by PWM Private Wealth Counsel to navigate through.

We are happy to announce that we are now going to be offering a series of webinars that you can register for with the first one being presented by Kevin Haakensen,

Portfolio Manager. The first webinar is entitled “It’s Never Too Late to Rebuild your Retirement Portfolio?” and will be available on July 7 with a 10am start time. If you happen to be unavailable, there will be additional airings available on our website. All you need to do is simply register and receive the information for logging on via email.

We also have our Life After Harvest webinars available on lifeafterharvest.com, so feel free to review those as well.

WEBINARS!

PWM PILLARS

To learn more about how insurance can both provide protection, and help you build assets for your retirement or estate plan call Stewart at 306-975-9500. or visit www.pwmprivatewealth.com.

STEWART GILLOTT, Insurance Advisor, Hollis Insurance*

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For more information, visit https://lp.pwmprivatewealth.com/webinar-register/

This information has been prepared by Kevin Hegedus and Kevin Haakensen who are Portfolio Managers for HollisWealth® and does not necessarily reflect the opinion of HollisWealth. The information contained in this newletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors.

HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

*Insurance products are provided through Hollis Insurance. Only those services offered through HollisWealth, a division of Industrial Alliance Securities Inc. are covered by the Canadian Investor Protection Fund.

* HollisWealth does not provide any income tax preparation services and does not supervise or review any income tax returns.

SASKATOON 205-210 Wellman Crescent

(306) 975-9500 or

1-800-652-7472

PRINCE ALBERT 25-11th Street East

Swift Current Unit 14-600, Chaplin Street

Visit our website at www.pwmprivatewealth.com

OUTSTANDING INTERNET PRESENCETHE B2B BANK AWARD FOR MULTI-SERVICE ADVISOR OF THE YEAR

WINNER

*Awarded by Wealth Professional magazine

BE SURE TO FOLLOW US!

Don’t forget to check out our Money$ense Video Blog and Meshke’s Minute, which can both be found via www.pwmprivatewealth.com

Tune into the Money Sense Radio Show Saturday 11am and Sunday 5 pm.

7PWM PILLARS

Holley Frost, Associate Investment Advisor, HollisWealth, a division of Industrial Alliance Securities Inc. and Insurance Advisor, Hollis Insurance*

Leslie Wong, Associate Investment Advisor, HollisWealth, a division of Industrial Alliance Securities Inc. and Insurance Advisor, Hollis Insurance*

Riley Sittler, Investment Advisor, HollisWealth, a division of Industrial Alliance Securities Inc. and Insurance Advisor, Hollis Insurance*