Subject: SRC Sponsor: Steinberg Wealth 2021 Performance and "Golf Dues"
Dear SRC Members,
Happy new year to all of you, and I wish you and your friends and families the very best in 2022. May we all be better putters.
Despite Covid variants, political dysfunction, supply-chain bottlenecks, and other headwinds facing a recovering global economy, 2021 was a strong year in domestic and global markets. Our goal is always to deliver strong results while taking less risk – something we accomplished across all three of our core strategies last year.
Steinberg Wealth 2021 Calendar Year Performance (gross of fees):
Canadian Dividend Growth Strategy: +25.9%
We are running an extremely high quality Canadian Strategy focused on sustainable dividends, and rock solid balance sheets. There are no oil producers in the portfolio. Today, we are getting a 3.7% dividend yield which will rise over time, as each company in the portfolio has a long history of free cash flow generation and rising dividends.
Global Value Equity Strategy: +14.1%
We own a high quality, well-diversified Global portfolio which includes the best business we can find (outside of Canada) trading for less than we believe them to be worth. The portfolio is trading at 16x P/E (far less than the P/E of the S&P 500 at present) resulting in a strong combination of balance sheet strength and value.
High Yield Bond Strategy: +5.7%
Unlike regular bonds (TD, CIBC, Bell, etc.), high yield bonds historically do well in rate-rising environments. Regular bonds were negative for the 2021 calendar year, and this will only get worse if rates rise. The only fixed income asset class where we see value today is in high yield bonds.
Full Performance can be found on our website: https://steinbergwealth.com/performance/
Membership Dues and Management Fees
While annual dues vary widely across Ontario, one thing is for certain – Golfers have to pay them. I have written on this subject before, however, we tend to save the average client over $10,000+ a year in management fees. For larger clients, the savings can be anywhere from $30,000 to $60,000 a year in fees … or more!
Whether we can save you $10K, $30K or $50K+ per year in fees, that (combined with strong performance) represents a tremendous amount of value creation over a decade or longer.
From the fee savings alone, many of you would be golfing for free each year.
Rising Rate Environment and Inflation
What worked well for the past five years is unlikely to do the same in a rate-rising and inflationary environment. Investors should be taking this opportunity to regroup, rebalance, diversify, and de-risk their portfolio – especially those who have heavy concentrations in regular bonds, balanced mutual funds, and mega-cap tech. “A foot in every camp” and more equal weighing across sectors should prove a far better approach for the next five years.
Portfolio Review or Retirement Analysis
For those interested in a complimentary portfolio review or retirement analysis, please call or email me anytime to set up a meeting.
Liam Card, CIM
Sr. Vice President and Portfolio Manager
Lorne Steinberg Wealth Management, Inc.
34 King St. East, Suite 701
O: (416) 485-4747
C: (416) 460-4992