Q1 2023 update ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ Q1 2023 market & portfolio update Hi there, It’s been an eventful start to the year, with the fall of Silicon Valley Bank and the ripples it caused throughout the banking sector and the economy. Inflation is still high but starting to come down, and while the economy does seem to be slowing, it remains resilient. As for the markets, they’re just trying to price it all in. I’ll get to the numbers from last quarter in a second. First I want to address a question that we’re hearing from a lot of our clients these days: if I’m holding onto cash, when should I get back into the markets? Timing the market is very hard, but there are a couple general trends to keep in mind. One is that, as the interest rate hiking cycle nears its end (as market pricing suggests it will), cash starts to become less attractive compared to risky assets like stocks and bonds. The second important thing to know is that historically, investors have gotten the best returns in the period immediately following a bear market (like the one we’re in now), before any economic recovery even starts.* This doesn’t mean markets couldn’t fall from here – they certainly could, particularly if the economy falls into a recession. But for investors who’ve been holding onto cash and waiting for markets to improve, it would be smart to have a plan for getting back in (we can help with that). Q1 recap Stock markets continued the rally that began in October, and are up about 7% since the beginning of the year. Our classic managed portfolios are up about 5.5% (growth), 4.5% (balanced) and 4% (conservative), with gains being driven in particular by global stocks from developed markets outside of North America (+8%), while Canadian stocks and Emerging Markets stocks lagged but still contributed positive gains. Bonds and gold (+8%) also rallied in the quarter.** Our Socially Responsible Investing portfolios gained about 1% more than the classic portfolios due to higher international stock market exposure. Looking ahead Markets are trying to price in many different factors right now — and they’re signalling a wide range of outcomes. Bond pricing is anticipating rate cuts, which would signal economic weakness, while stocks and credit spreads are showing more economic strength. We believe the best bet for long-term performance is to hold a diversified portfolio – like our Managed Investing portfolios – that includes assets that perform both in weaker economic conditions (like gold and bonds) and when growth is strong (like equities). Those who invest this way, and who continue to save and invest throughout market cycles, tend to be best positioned to meet their long-term goals. Open a managed account If you’d like to learn more about how we think about building your portfolio, we have a reference available here. As always, if you have any questions about your investments or financial plan, we’re here. Please get in touch. All the best, Ben Reeves Chief Investment Officer Your opinion matters I’ve been sending these updates more frequently lately, and I’d love to know if you’re finding them useful. Yes, useful Could be better Not for me Wealthsimple, 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Privacy Policy Unsubscribe Replies to this email address are not monitored. Have questions? Visit our Help Centre or submit a request to our Client Support team. *Source: Goldman Sachs **Developed stocks ex-North America are the total returns of the MSCI EAFE index for the first quarter. Gold is the return of GLDM, a gold ETF, in the first quarter. Data sourced from Bloomberg. All information and commentary provided is for illustration purposes only and is not investment advice or recommendations. All investments involve risk. To get more info on our products, investment decisions, fee schedules, user testimonials, promos & more visit wsim.co/disclaimers. Indicated performance data are historical for the period indicated. Rates of return do not take into account any fees or tax payable. Past performance may not be repeated. Managed accounts are offered by Wealthsimple Inc., a registered portfolio manager in each province and territory of Canada. Self-directed investing is offered by Wealthsimple Investments Inc. (WSII). WSII is a member of the Canadian Investment Regulatory Organization (CIRO). Customer accounts held at WSII are protected by Canadian Investor Protection Fund (CIPF) within specified limits in the event WSII becomes insolvent. A brochure describing the nature and limits of coverage is available upon request or at CIPF. © 2024 Wealthsimple Technologies Inc.