Do Valuations Matter? 

February 4, 2024

One could certainly question the importance of valuations in this market. If you were bold enough to buy Nvidia a year ago, ignoring the 60x price-to-earnings (forward earnings), you made money. Microsoft, too, sits at 33x and continues to go up even though its forecast earnings growth is only about 15%. Or which pharmaceutical company would you like to own, the one trading at 50x earnings or 12x? Surprisingly, the right answer was the 50x Lily and not the 12x Pfizer. Solving for a pandemic is nice, but solving for fat is much more lucrative. 

For the S&P 500, the quartile of companies that were trading with the lowest valuation at the start of 2023 enjoyed an average return of 8.9%. Not bad. But the companies with the highest valuations returned 17.7%. It’s not just within U.S. equities that it may appear valuation doesn’t matter. Emerging markets have been trading at very low valuations for years and have consistently lagged developed markets. Based on the Bloomberg Developed (DM) and Emerging (EM) markets indices, the spread is wide at about 18x vs 12x. Also of interest is that EM earnings are expected to grow at 28% compared to 18% in DM over the next couple of years. Or the TSX at 14x compared to 20x for the S&P, a long-standing valuation spread, yet the more expensive S&P keeps winning. 

Now, comparing one market’s valuations to another is like comparing apples and oranges. The composition of the market and different sector weights can often explain much divergence in valuations. For instance, the S&P currently has a 30% weight in technology, often a higher multiple sector. That compares to under 10% for the TSX. The S&P has more consumer staples, more health care, less energy, and less financials compared to the TSX. Staples and health typically carry higher valuations than the more cyclical energy and financials. 

Yet valuations do matter. The chart below uses S&P 500 data back to 1950 and calculates the average performance for the S&P 500 based on starting point valuations. It is rather clear that higher valuations equate to lower returns going forward, on average. And that is the crux: averages can hide a lot of data. Sure, the average return from a starting point in the most expensive quartile bucket is rather close to zero, yet the one-year return ranges from +39% to -38%. That is rather wide. The 3-year return ranges from -17% to +18%. So, even though valuations are high, anything can happen. 

Worth noting, the range of performance outcomes when the starting point is cheap (less than 11.4x), are rather compelling. The 3-year annualized worse case was flat, and the best case was +26%. Today, though, we are not in the bargain basement; we are in the valuation luxury penthouse. 

Pushing the S&P 500 up to the penthouse of valuations is the Mag 7 or Enormous 8, or whichever funny label you prefer for the megacaps sitting atop the index. The concentration in the S&P 500 is at or near historically high levels, which is also pushing the valuation to the upper levels. To give an idea, the chart below shows the relative valuations of the S&P 500 (traditional market capitalization-weighted version) and the Equal Weight S&P 500 index. It is those megacaps making the S&P 500 expensive; the broader market is not nearly as elevated. 

The Enormous 8 could very easily become more enormous in 2024, which would once again drive the most expensive part of the market higher. The average PE across the Enormous 8 is currently 36x forward earnings, but as we learned in 2023, a high starting valuation doesn’t guarantee anything as, in the short term, anything is possible. However, given concentration and given valuations, the odds are likely tilted in the other direction. Don’t lose sight of valuations; in the long run, they are one of the best indicators of performance and can offer a margin of safety. 

— Craig Basinger is the Chief Market Strategist at Purpose Investments 

Source: Charts are sourced to Bloomberg L.P. and Purpose Investments Inc. 

The contents of this publication were researched, written and produced by Purpose Investments Inc. and are used by Echelon Wealth Partners Inc. for information purposes only. 

This report is authored by Craig Basinger, Chief Market Strategist, Purpose Investments Inc. 

Disclaimers 

Echelon Wealth Partners Inc. 

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them. 

Purpose Investments Inc. 

Purpose Investments Inc. is a registered securities entity. Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. 

Forward Looking Statements 

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. Neither Purpose Investments nor Echelon Partners warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. These estimates and expectations involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. 

Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. 

The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This is not an official publication or research report of either Echelon Partners or Purpose Investments, and this is not to be used as a solicitation in any jurisdiction. 

This document is not for public distribution, is for informational purposes only, and is not being delivered to you in the context of an offering of any securities, nor is it a recommendation or solicitation to buy, hold or sell any security.

Dividends on sale 

September 18, 2023

Investing isn’t easy. The markets rarely behave the way most think they should and seem to often behave to make the most people wrong. The financial media is filled with tales of fat tails – either things that went exceptionally well or extremely poorly. Pulling on those emotional strings to participate or capitulate, even when most investors’ experience is squarely in the more boring middle. And when profits are made by putting your hard-earned dollars in harm’s way, the government tends to show up to share in the party. 

It’s no wonder Canadian investors lean pretty heavily on dividends or the dividend factor. They’re historically less volatile, with good returns and some preferential tax treatment for Canadian qualified dividends. And while the previous paragraph may sound a bit down, don’t forget the eighth wonder of the world – compounding. As Albert Einstein famously said, ‘compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.’ 

Wise words. Steady returns and smaller drawdowns can create a lot of wealth over time. 

There is one more reason to explain Canadians’ admiration for dividends, an often painful experience when deviating elsewhere in Canada. The chart below is kind of fun, and we do apologize if we missed a company along the way. This is a historical look at all the companies that, at one time or another, had a larger market capitalization than Royal Bank. Not implying Royal is a proxy for dividends, but it’s still kind of a fun chart. There are many tough experiences among the names on this list, and you can add other groups, too, like gold, marijuana, etc. These all proved lessons that tended to keep investors focused on dividends. 

Of course, the good news is dividends have worked really well over the past 20+ years. Using the DJ Canada Select Dividend index as a proxy, dividends have outperformed the TSX rather handily over the years. And done so with less volatility, a happy combination. 

We would never suggest investors ignore the past, but it appears some changes are afoot. Perhaps the biggest being yields. One of the positive impulses for the dividend factor over the past 20+ years has been the long grind lower in bond yields. As yields fell, investors looked elsewhere for a nice income stream, resulting in a steady inflow for dividend payers. It also encouraged more and more companies to adopt an investor-friendly dividend policy. 

There’s no denying rising yields over the past two years have changed this tailwind to a headwind. The simple fact is if you can receive a 3.7% yield on a government bond compared to a paltry 1.5% a few years back, the yield on a dividend-paying stock must also move higher. It is not a 1:1 comparison because of different credit risks between governments and corporations, different taxation of income vs. dividends, coupons are guaranteed while dividends are not but often increase with time, etc. Still, higher yielding on competing asset classes is a headwind for dividend-paying companies, just as it was a tailwind when yields were falling. 

To complicate things a little more, it isn’t as simple as looking at today’s yields but also where the market thinks yields are going. For instance, the broader TSX and the DJ Canadian Dividend index were roughly neck and neck in 2023 until a couple of months ago. So what happened? Well, the consensus started coming around to stronger overall economic growth and recession talk slowed. This increased the likelihood that yields will remain higher for longer, and guess what that means? The yield on dividend companies must be higher as well. The dividend yield goes up as the price of the stock going down. 

Today, about 20% of the TSX constituents carry a yield of over 5%. That is up from 8% two years ago. To put it bluntly, higher bond yields have resulted in price declines for many dividend payers, which has helped lift dividend yields. 

So, dividend-paying companies are now paying more to remain competitive with higher bond yields. There is also an added bonus: valuations among dividend payers are historically low. The dividend space in Canada is currently trading at about 10x forward consensus estimates, about two points lower than the long-term average. One could argue that given the current dividend yield and valuations, this part of the market is certainly pricing in higher yields. 

Final Thoughts 

So what comes next? If a recession or economic slowdown is looming, well, that is good news for dividends vs. the broader market. A recession would likely result in bond yields coming back down, somewhat at least. That would change the recent headwind back to a tailwind. And given the long-term defensiveness of the dividend factor, it’s probably not a bad thing if there is trouble ahead. Of course, yields could remain high or even rise (not our expectations, but possible). While that would be a headwind, the current dividend yields and valuations certainly provide a buffer. 

— Craig Basinger is the Chief Market Strategist at Purpose Investments 

Source: Charts are sourced to Bloomberg L.P. and Purpose Investments Inc. 

The contents of this publication were researched, written and produced by Purpose Investments Inc. and are used by Echelon Wealth Partners Inc. for information purposes only. 

This report is authored by Craig Basinger, Chief Market Strategist, Purpose Investments Inc. 

Disclaimers 

Echelon Wealth Partners Inc. 

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them. 

Purpose Investments Inc. 

Purpose Investments Inc. is a registered securities entity. Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. 

Forward Looking Statements 

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. Neither Purpose Investments nor Echelon Partners warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. These estimates and expectations involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. 

Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. 

The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This is not an official publication or research report of either Echelon Partners or Purpose Investments, and this is not to be used as a solicitation in any jurisdiction. 

This document is not for public distribution, is for informational purposes only, and is not being delivered to you in the context of an offering of any securities, nor is it a recommendation or solicitation to buy, hold or sell any security.

Two Tales of the Same Market 

June 5, 2023

Global equities, as measured by the Bloomberg World Equity Index, are up 9% so far in 2023. So, is it safe to give the all-clear with a soft landing and markets go higher? The market advance certainly supports the bulls, as does continued strong employment and recovery signs in housing. On the other side are the bears, highlighting the narrow breadth and weakness in many forward-looking economic signs pointing to recession risk. This is normal. Often during economic turning points, the cross currents in data reach very high levels. Confounding this is lingering inflation, which boosts topline sales growth and can mask the signs of deteriorating business activity. 

In fact, it is also common to see material equity market advances in and around economic turning points. The following chart montage measures the S&P 500 one year before and after recession onset. The percentage is measured from the pre-recession high. It is rather common to see decent market advances before a recession hits and sometimes even rallies after it starts, before things typically get worse. Of course, knowing when a recession has started is also something that only becomes clear many months or quarters after the face. Kind of hard to tell in real-time. 

Authors from Purpose Investments: Craig Basinger Chief Market Strategist Derek Benedet Portfolio Manager Brett Gustafson Portfolio Analyst 

Now if you believe the current environment is some sort of cross between 1973 (inflation+nifty 50) and 2000 (tech bubble), those years should be focused on a little more. We would point out that a +10% rally for the S&P 500 in the second quarter of 2001 was led by a +38% advance in the Information Technology sector. That did not end well. Sound potentially familiar? The S&P 500 Information Technology sector is up +35% year-to-date in 2023, with the S&P +10%. 

The crux of this is not to get too excited or complacent just because we have enjoyed a good rise in stock prices so far in 2023. But the real question remains – is there a recession coming soon? 

Recession/No Recession Cross-currents 

As our readers hopefully know, we are in the higher recession probability camp. Hence our moderate underweight in equities with moderate overweights in bonds and cash [see portfolio positioning below]. We are back to a neutral duration on bonds and less credit. Not super defensive, but it’s certainly tilted that way. Our multi-asset balanced model is +3.7% year-to-date and is defensive with some up-market capture. Ideally, we plan to become even more defensive as/if recession evidence builds. Which, of course, raises the most important question – what if we are wrong? 

With names such as ‘pre-mortem’ or ‘bull vs bear case,’ the objective is clear – actively engage and try to see the other side’s opinion. With our defensive tilt, we believe a recession is a higher probability than no recession. Here is an attempt to convey both sides: 

Recession Risk No Recession anytime soon 
Rate hikes – the track record of central banks managing a soft landing is poor. Given the number of hikes globally, even less likely. It takes 9+ months for rate hikes to fully impact the economy, which means pain is mostly on the horizon. Plus QT. 
Leading indicators – or manufacturing surveys, or recession probability models, or the yield curve inversion all point to a likely recession in the near term. 
Buffers depleting – Savings during the pandemic are dwindling fast, given inflation and higher interest costs. Even with a decent labour market, this could start to change the behaviours of consumers. 
Labour IT IS A LAGGING INDICATORS, don’t take solace in the fact that it is holding in. Temp employment is falling, often a leading indicator of total payrolls. 
Commodities – Dr. Copper and its other commodity friends are certainly signalling weaker demand ahead. Even with the tight supply of many commodities, prices have been declining. 
Inflation migration – Inflation was very positive for corporate earnings, boosting the top line while companies managed to slow cost inflation. Costs appear to be catching up now, and this is hitting margins. 
Earnings – Starting to see negative earnings growth; if the economy slows and/or costs keep rising, this will get worse. Wages are up, interest expense is up, and the cost to do anything is up. 
Valuations – Global equities are trading 15.6x, roughly in line with longer-term averages. This means valuations are not pricing in much bad news or even higher yields available in cash/bonds. 
Just normalizing, not recession – Manufacturing ran beyond full speed to catch up with shortages/bottlenecks from the pandemic. Coming off this high was always going to ‘look’ like a recession. 
Labour – Strong employment gains continue and remain broad-based. Hard to see an imminent recession. 
Consumer strength – credit card spending remains strong, delinquencies low. The U.S. and European consumers have very strong balance sheets, sturdy enough to weather higher inflation and rates. 
Housing – Rising rates in 2022 caused a slowdown in housing, but since rates have generally stabilized, a rebound of activity is on. The U.S. economy rarely moves in the opposite direction to housing. 
Hard vs Soft data – Much of the weak economic data is survey or other ‘soft’ data. The hard data remains much more upbeat. Better to believe in what people do (hard data) than what they say (soft data). 
Valuations The TSX is 12.8x, Europe around the same, which means it’s the U.S. at 18.5x, which is making things look expensive. But the S&P is skewed by a few names, and so is its valuation. 26% of the index is trading below 12.5x, up a lot from only 18% a year and a half ago. 
China & Europe – China reopening and Europe avoiding an energy crisis have really set the stage for better growth on the global front. 
Bearishness – Investors are bearish, portfolio managers are bearish, and speculators are bearish. The market often proves the maximum number of people wrong. 

Hopefully, this highlights some of the cross-currents the market and investors are currently battling. It is no ‘slam dunk’ in either direction. That being said, we believe the left column carries more weight or a higher probability. Also worth considering is not just which side has the greater likelihood of being correct but the magnitude of the impact. If the bulls are right, given S&P 4,200 and TSX 20k, the upside may be limited. If the bears are right, but clearly early, the downside impact may be larger. 

For now, we will keep our foot off the gas and hover over the brake. 

Market Message 

Since the beginning of the year, we’ve increasingly become incrementally more defensive in our positioning. Perhaps our framework is wrong. After all, the S&P 500 is up 10% so far this year and is up 17% off of the lows from last October. International markets have performed even better, with the MSCI EAFE Index up over 25% off the lows last year. Thankfully we have been overweight international. Canada has lagged, but this, too, corresponds with the theme that last year’s worst markets are this year’s best-performing. Tech certainly fits into this theme, with the NASDAQ up a stunning 25% YTD. It’s worth noting that the NASDAQ is still 18% below its all-time high, and the S&P 500 is 12% below its high-water mark. 

Is this a bear market rally or the beginning of a new bull? Unfortunately, it’s impossible to give a concrete answer without the benefit of a rearview mirror. The broad market narrative is signalling this could be the beginning of the next bull, with the S&P above all major moving averages. We don’t believe it’s a coincidence that the rally has stagnated right at the 50% retracement from last year’s fall. We saw similar bounces to exactly the 50% retracement level in both 2001 and 2008. 

The four horsemen (actually six) 

This is one of the thinnest rallies that we’ve really ever seen. In the late 1990’s tech bull, the “four horsemen of the apocalypse” were repurposed as the four horsemen of the Internet – EMC, Cisco, Oracle and Sun Microsystems. At times during that bull, these names represented most of the market’s advance. They were changing the world and how we communicate. Not owning them meant you lagged the market cap-weighted index. Sadly, Oracle is the only one of the four to ever exceed its 2000 peak, a feat achieved fourteen years later in 2014. Once again, we have a market that is ridiculously narrow. The S&P 500 is up 10% this year, with six companies representing almost all of the gains!! Are these the six horsemen of AI…. 

Digging further into market breadth, or lack thereof, we will highlight the performance difference between the S&P 500 Equal Weight vs Market Cap. Last year’s outperformance for equal weight has been erased, with the market cap index now just narrowly outperforming since the beginning of 2022. So far this year, equal weight is losing by the widest margin for a calendar year since Bloomberg’s data began in 1990. Returns being driven by the largest companies in an index aren’t unusual, but this does look extreme. Markets are not suggesting broad strength, it’s idiosyncratic, and this is why we don’t believe it’s really giving us an all-clear signal despite briefly breaking out of the 4,200 range. 

We believe it’s time to fight the momentum trade. Even the world’s largest momentum ETF seems to be late to the party once again. Its semi-annual rebalance will see its tech weight move up from just 3.2% to 20.6%. Energy and Health Care allocations will be slashed, and the Fund will once again be tilted heavily toward tech and other growth sectors. The very exposures that drove tremendous underperformance to the S&P 500 last year. Ignoring the confines of the calendar, we wanted to see just how unprecedented the past five months have been in terms of the historical five-month performance difference between the Technology sector and the equal weight index. The 33.8% difference is massive and historically rare over any 5-month period going back to 1990. The only two similar periods were a brief stint in 2020 and in the late 90s. In both periods, we believe it’s noteworthy that the relative performance then dropped in subsequent months. 

With the debt ceiling nearly behind us, investors can turn their attention more fully to central banks and the potential for further hikes. AI’s prominence in corporate updates has helped defy the gravity of rising rates which typically have an outsized impact on the tech sector and other rate sensitives. This relationship is currently broken, but we would expect that the AI boom is merely a mirage, like a bountiful oasis in the desert. We are not doubting the potential of AI, but we are doubting the near-term impact. It evokes a sense of hope and promise but conceals the underlying challenges facing not only the sector by the market as a whole. 

Other concerning relationships 

Key sectors such as discretionary stocks, transports, and banks have continued to struggle. These economically sensitive stocks are finding few buyers even at current depressed levels. The relationship between discretionary stocks and consumer staples is a useful indicator to read into risk sentiment within the market. In the chart below is the ratio of the equal-weighted sectors against each other to remove the outsized impact of Tesla and Amazon. Though Discretionary stocks have rebounded somewhat relative to Staples, most of this happened in January and has been all but absent the past few months. 

Dow Theory is a classical technical tenant, and it suggests that the movements of the stock market can be analyzed by examining the interaction between the Dow Jones Industrial Average and the Dow Jones Transportation Average. According to the theory, confirmation of a bullish trend occurs when both the DJIA and DJTA move in the same direction. Both were strongly in line in 2022 but had been diverging of late, with Transports recently making new lows for the year. 

Looking ahead, we should assume there will be volatility and twists and turns in the months ahead. For now, given the underlying market signals and lack of breadth, we suggest continued defensive positioning in equity markets. The market will start to fully discount potential earnings recession and further economic weakness. We remain underweight sectors that are more cyclically sensitive and would suggest fading the tech advance. 

Tech innovations such as the PC, internet and wireless proliferation have changed all our lives over the past few decades. But history shows that markets can get ahead of themselves, and it takes time to see who ultimately wins. This year’s tech blowout is not without precedent; however, these periods of outperformance have historically been followed by relative underperformance. The lack of broad participation shows that investor sentiment and confidence are concentrated in only a select few stocks, making the market more susceptible to volatility and potential downside risks. 

Market Cycle 

Market cycle indicators remained stable from last month with no changes. Off the bottoms, thanks to some improving economic data in housing. Manufacturing remains weak while global and fundamentals are mixed. Welcome to continued cross currents in the data, again a regular occurrence around potential turning points. 

Portfolio Positioning 

No changes to our portfolio positioning this past month. We remain with a moderate underweight in equities and a moderate overweight in cash and bonds. Full underweight in emerging markets and moderate overweight in international has worked well of late. The moderate underweight in U.S. equities, not so much. 

We continue to find decent value in the more conservative parts of the bond market, given the rise in yields. Again, our fear of duration has fallen as a potential recession is our base case. And among alternatives, we continue to lean on volatility or defense strategies with real assets. 

The Final Word 

We don’t know if there will be a recession or how the market may react one way or the other. But we do know there is more evidence of slowing than accelerating. Today, this does not appear to be reflected in equity prices and probably not in bond prices either, given credit spreads. The data will likely remain mixed, offering support to make either a bullish or bearish argument. Given the impact of either scenario and the probabilities in our analysis, we remain defensively tilted. 

“It’s tough to make predictions, especially about the future” – Yogi Berra 

— Craig Basinger is the Chief Market Strategist at Purpose Investments 

— Derek Benedet is a Portfolio Manager at Purpose Investments 

— Brett Gustafson is an Analyst at Purpose Investments 

Source: Charts are sourced to Bloomberg L.P. and Purpose Investments Inc. 

The contents of this publication were researched, written and produced by Purpose Investments Inc. and are used by Echelon Wealth Partners Inc. for information purposes only. 

This report is authored by Craig Basinger, Greg Taylor and Derek Benedet Purpose Investments Inc. 

Disclaimers 

Echelon Wealth Partners Inc. 

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them. 

Purpose Investments Inc. 

Purpose Investments Inc. is a registered securities entity. Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. 

Forward Looking Statements 

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. Neither Purpose Investments nor Echelon Partners warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. These estimates and expectations involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. 

Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. 

The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This is not an official publication or research report of either Echelon Partners or Purpose Investments, and this is not to be used as a solicitation in any jurisdiction. 

This document is not for public distribution, is for informational purposes only, and is not being delivered to you in the context of an offering of any securities, nor is it a recommendation or solicitation to buy, hold or sell any security.