Week Ending Friday, December 11, 2020 www.mackaygroup.com 1-800-561-4468 MacKay Group Wealth Management. Our mission is to provide our clients superior investment advice, products and service. Serving clients and friends at RBC Dominion Securities Inc. – a member of RBC Financial Group since 1983.

HOW I SEE IT – by Bruce MacKay remain accommodative- data releases have been Santa Claus Rally/IPO mania/ RBCGAM 2021 better than expected and economies are showing Stable equity markets this week - December impressive resilience - growth may stumble a bit in historically is a stable month - tax loss selling is 4Q but vaccine should clear path to normalization - behind us - this sets us up for a Santa Claus rally. analysts now forecast S&P 500 earnings growth of 20% into 2021 and for profits to reclaim their pre- Positives: AAII investor bullish sentiment holding COVID-19 peak sometime next year economy- at 48%- good confidence indicator. Lots of US IPOs reclaiming its prior peek over the next 1 to 2 years this month - NASDAQ expects robust Q1 too - and approaching its long-term growth trajectory in DoorDash and Airbnb this week possibly - 2023 –economy still supported by significant fiscal Robinhood soon. Pent-up demand from institutional and monetary stimulus.” investors - increasing their investments in equities. Recessions are caused by Fed being too tight - Negatives: Green shoots of opening of economy are definitely not tight now. V shaped bounce off the temporarily going dormant. What are "rent in bottom - US GDP up 33.1% annualized real growth arrears” - US renters could owe $70 billion in Q3 - likely 5% growth in Q4 - the economy is still (Bloomberg) - what do office, retail and industrial smaller than it was a year ago - it will take years for tenants owe? ‘s budget watchdog is a full recovery as small business needs to come questioning the rationale behind Prime Minister back. Big tech has allowed much the economy to plan to roll out as much as C$100 billion stimulus of operate virtually. Don’t expect double dip in the next three years seeing the economy won’t need economy- that’s what stock market is telling us. Jobs all that spending. IPO surge - many new US IPOs will take years to fully recover - US forecast of 6.3 see first day of trading stock prices double - is there million new jobs in 2021 & unemployment rate of too much speculation? Its rotation of markets that’s 5% for the end of next year. “FED is dead set on driving share prices - are we seeing euphoria leaving short term rates near zero for 2021 - doubt trading? ECB’s ' LAGARDE “warns of significant inflation will rise above its 2% target and will contraction from second wave - pandemic still poses change their mind” (Brian Wesbury). Expect long- a serious economic risk - affects confidence. term rates to head slightly higher to 1.4% on 10 year - steepens yield curve - good for banks. It’s about housing -US has been building too few homes Investment Strategy: “When the future first arrives through the past decade - Covid-19 increases we often don’t recognize it.” Bruce demand - expect prices to continue to climb in US - perhaps Canada two. COVID-19 - is there light at Stock of the Days this week include: T, ADBE, the end of the tunnel - 2021 is likely to be much DOL, DELL, SHOP. better than 2020. RBCGM just released “Global Investment Outlook - New Year 2021 - highlights include; vaccine development draw normalization Have a nice weekend. Be well. Bruce close - raising equity allocation & sourced from bonds. Little threat of inflation- central banks

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THIS WEEK’S NOTES & QUOTES - News and Opinions Worth Repeating

'Not Amazon' website seeks to boost local businesses across Canada Growing website has listings for more than 2,000 businesses in , Halifax, Calgary and Vancouver A Toronto woman is hoping to shift online shopping habits to local businesses during the holiday season by making the experience as convenient as Amazon. "I feel small business is what makes Toronto a great city, and to let them fall by the wayside during a pandemic would be the worst," said Ali Haberstroh. On Nov. 22, the day before Toronto went into a second partial lockdown, the social media manager built a spreadsheet with categories and links to local shops to remind herself to shop locally. https://www.cbc.ca/news/canada/toronto/amazon-local-businesses-1.5836283

Ottawa to hike federal carbon tax to $170 a tonne by 2030 The price of gas at the pump will increase by at least 37.57 cents a litre as a result Prime Minister Justin Trudeau today released the government's strategy to dramatically reduce greenhouse gas emissions by 2030 — and its centrepiece is a gradual hike in the federal carbon tax on fuels to $170 a tonne by that year. Beyond the carbon tax hike, the government is promising $15 billion in new spending on climate initiatives over the next 10 years — money earmarked for improvements to the country's electric vehicle charging infrastructure, rebates and tax write-offs for zero-emissions vehicles and funding for home retrofits, among dozens of other proposed policies. The carbon tax will increase significantly from its current level — the tax is just $30 a tonne this year — as part of a push to meet and surpass Canada's ambitious goal of reducing greenhouse gas (GHG) emissions by 30 per cent below 2005 levels by 2030. https://www.cbc.ca/news/politics/carbon-tax-hike-new-climate-plan-1.5837709

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New whale species discovered off Mexico Researchers believe they have found a previously unknown species of beaked whale in waters off Mexico's western coast. If confirmed, the new species would mark a significant discovery among giant mammals. The team of researchers came upon three unusual specimens while tracking a different, rare species of typically shy beaked whales on Nov. 17 near Mexico's remote San Benito Islands, about 500 kilometres south of the U.S. border. "These animals popped to the surface right next to the boat," said Jay Barlow, a marine mammal biologist at the Scripps Institution of Oceanography in San Diego. https://www.cbc.ca/news/technology/new-whale-species-1.5835576

Airbnb valuation tops US$100B in trading debut surge Airbnb Inc. shares more than doubled in their trading debut, propelling the home-rental company to about a US$100 billion valuation and one of the biggest first-day rallies on record. The shares closed Thursday at US$144.71 up 113 per cent from the US$68 initial public offering price. The listing came 10 months after the COVID-19 pandemic upended travel and 24 hours after DoorDash Inc. soared in its public debut. Airbnb joined DoorDash in what is quickly becoming a euphoric moment for new listings in America’s equity markets, egged on by retail investors embracing companies poised to thrive as vaccines promise a loosening of pandemic restrictions. While soaring valuations for IPOs give many market veterans pause, Airbnb is at least earning money, unlike 80 per cent of firms that have sold new shares in 2020. The company just reported its most profitable quarter ever. https://www.bnnbloomberg.ca/airbnb-valuation-tops-us-100b-in-trading-debut-surge-1.1534301

Facebook breakup would demolish Zuckerberg social media empire The U.S. Federal Trade Commission took a major step toward the possible breakup of Facebook Inc. by formally filing an antitrust lawsuit against the technology giant, accusing it of abusing its monopoly powers in social networking to stifle competition. The FTC and a coalition of states also suing the company zeroed in on Facebook’s acquisition of photo-sharing app Instagram for US$715 million in 2012, and the US$22 billion deal for messaging service WhatsApp two years later. The deals, which sailed past regulators when they were proposed, were meant to “squelch” competitive threats, the commission wrote in its complaint Wednesday. Now, the FTC wants Facebook to divest the two businesses -- an idea that poses an existential threat to the empire built by Chief Executive Officer Mark Zuckerberg. https://www.bnnbloomberg.ca/facebook-breakup-would-demolish-zuckerberg-social-media-empire-1.1534363

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CANADIAN MARKETS

I. Canadian Fixed Income Benchmark Canada Government Bonds IV. News we recommend on our CDN Holdings Market prices as of market close on Dec 4, 2020

Transcontinental Inc. (TCL) Giddy Up: Packaging Momentum, Healthy Printing Profitability, a Replenished Balance Sheet Ranking: Outperform (RBCCM). Price C$20.23 – Target C$23.00

Air Canada (AC) So what's going on with stock?

Ranking: Outperform (RBCCM). MG Canadian Fixed Income Top Holdings Price C$26.43 - Target C$30.00  Government & Corporate Bonds  Convertible Debentures Inc. (DOL)  High Yield Open End & Closed End Funds Let it snow! Getting into the Holiday spirit  Rate Reset/Fixed Floater Preferreds with strong Q3 results, target to $66  Perpetual Preferreds Ranking: Outperform (RBCCM). Price C$54.46 Target C$66.00 II. RBC DS WINTER CDN 2021 Equity Focus List RBC CM Focus List: , Dollarama Inc., Magna Please contact our office if you would like a copy of any of International Inc., Restaurant Brands, Alimentation the above research reports. Couche-Tard Inc., Pembina, , TC Energy Corp, Bank of , Brookfield Asset Mgmt, Canadian Imperial Bank of Commerce, Research Publications (available upon request) Element Fleet Mgmt Corp, Intact Financial Corp, National Bank, , TD Bank,  Global Insight- 2020 Outlook Canadian National Railway, Canadian Pacific  RBC Strategy CDN Focus List: WINTER 2021 Railway Ltd, GFL Environmental Inc., Thomson  RBC CM FEW Portfolio – WINTER 2021 Reuters, Toromont Industries Ltd., Waste Connections Inc., Inc. CCL Industries, Ltd, Corp, First Capital REIT, Fortis Inc.

III. Veritas V- list: (December 2020) Air Canada, CGI Inc., Canadian Natural Resources Ltd., Capital Power Corp., Ceridian HCM Holdings, Cable Inc., Dollarama, Inc., George Weston Ltd., Granite REIT, Hydro One Ltd., Kilam Apartment REIT, Financial Corp., Maple Leaf Foods Inc., Metro Inc., Rogers Communication Inc., SNC Lavalin Group, SPDR Gold Shares, TC Energy Corp., TFI International Inc., TransAlta Corp.

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INTERNATIONAL MARKETS IV. RBC DS ADR Focus List: China Unicorn, Vodafone, WPP Plc, Honda, I. US Fixed Income Anheuser-Butsch, Diageo, Unilever, China Benchmark USA Government Bonds Petroleum…, Eni S.p.A., Royal Dutch Shell, AerCap

Holdings, Barclays, HSBC, ING, Prudential PLC, Westpac Banking, AstraZeneca, Fresenius, Sanofi, ABB Ltd, Accenture, Alibaba Group, NICE Ltd, SAP SE, BHP Group.

V. News We Recommend on our Intl Holdings Market prices as of market close on Dec 10, 2020

Adobe Inc. (ADBE) F4Q21 Earnings and FAM: This Time Baby, ADBE is Bulletproof MG US Fixed Income Top Holdings include Ranking: Outperform  Government & Corporate Bonds Price U$476.87- Target U$575.00  High Yield Open & Closed Funds  Rate Reset/Fixed Floater Preferreds Sonos, Inc. (SONO)  IShares Mortgage Plus Index (REM) Yield 8.7% Survey says? Sonos momentum poised to continue through the holidays II. RBC DS US Equity Focus List Nov 2020: Ranking: Outperform Alphabet, Walt Disney Company, Facebook, Price U$21.00- Target U$26.00 Amazon.com, Home Depot, McDonalds Corp, Costco Corporation, JP Morgan, US Bancorp, CVS Health Corp, J&J, Mereck & Co, Thermo, Please contact our office if you would like a copy of any of Honeywell, Lockheed Martin, Adobe, Apple, Cisco, the above research reports. Mastercard Inc, Microsoft, Crown Castle

III. RBC DS Global Equity Focus List – WINTER Research Publications (available upon request) 2021: Alphabet, Walt Disney Company, Telus, Amazon.com, Home Depot, Restaurant Brands,  Global Insight- 2020 Outlook Alimentation Couche-Tard, Costco, Pembina  RBC GAM – Global Investment Outlook Pipeline, Suncor, TC Energy, Brookfield Asset  RBC CM – Top 30 Global Ideas for 2020 Management, Intact Financial, Royal Bank, TD Bank, US Bancorp, J&J, Merck & Co. Inc, Thermo Fisher, United Health, , Toromont, Waste Connections, Apple Inc Constellation Software, Mastercard, Microsoft Corp, CCL Industries, Crown Castle.

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MUTUAL FUNDS Closed/Open– Top Holdings Canadian Fixed Income Canadian Equity – iShares TSX Large Cap 60, Canso Credit Income iShares Canada Equity Income, iShares Canadian Dynamic Strategic Yield Dividend, iShares Canadian Select Dividend, iShares TSX Small Cap, iShares TSX Composite Canadian Equity Fidelity – Global Innovation/CDN Large Canadian Sectors – iShares TSX Financials, iShares Cap/Growth /Special Opp TSX REITs, BMO Equal Weight Utilities, iShares Mackenzie – Ivey CDN / Cundhill TSX Info Tech, iShares TSX Energy, iShares TSX Middlefield – CDN Dividend Growers/REIT Plus Materials Franklin Templeton – Bissett CDN Div/CDN Equity RBC –CDN Div/CDN Equity/ O’Shaughnnessy US – Fixed Income Dynamic – Strategic Yield US Bonds – XIG, TLT, US Preferred Shares - PFF US Fixed income Franklin High Yield US Equity – S&P 500, Dow Jones Index, Nasdaq Fidelity American High Yield 100, S&P 500 Dividend Index, iShares Dow Jones Select Dividend Index, Vanguard Dividend US Equity Appreciation Index, iShares High Dividend Equity Fidelity – American Eq/Small Cap American/Euro Fund, iShares Russell 2000 Index, S&P 500 Value Mackenzie – US Mid-Cap Index, S&P 500 Growth Index, S&P Small Cap 600 Middlefield – US Div Growers / American Core Index Franklin Templeton - Growth RBC - NA Value US Sectors – SPDR Financial Index, iShares Real Dynamic – Strategic Yield Estate, iShares, SPDR Utilities Index, iShares Telecom Index, SPDR Consumer Discretion, iShares GLOBAL Equity US Healthcare, IShares Nasdaq Biotech, iShares Fidelity – Global Div/Monthly Income Industrials Index, NASDAQ Index, Vanguard Mackenzie – Ivey Foreign Energy Index, DJ Basic Materials Index, iShares Middlefield - Health Care/Global Div Growers Homebuilders Index Franklin Templeton - Growth / Intl RBC – Global Fund / Int. Div G GLOBAL Equity Dynamic – Global Value China ETF, Europe ETF, Germany ETF, India ETF, iShares Emerging Mkts, iShares International ETFS – Top Holdings Dividend Canada – Fixed Income Bonds - XBB, XCB, XGB Unique ETFs Preferred Shares – CPD, PSF.UN Horizons Robotics & Automation, ETFMG Prime Cyber Security, Blockchain Technologies, Active AI Global Equity, Marijuana Life Sciences, Healthcare Leaders Income, Tech Achievers Growth & Income

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I

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FAVOURITE CHARTS

Dow Jones Industrial Average – 1789 to Date

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MACKAY GROUP WEALTH MANAGEMENT PORTFOLIO MANAGEMENT PROGRAMS Introduction Serving over 300 families and friends Our team manages clients’ portfolios on an since 1981. We provide the investment solutions you individual basis. Portfolios are custom designed to need to achieve specific goals, whether investing for meet your personal objectives. Investment yourself, family, your business or your organization. disciplines used include asset allocation, geographic Our Team Helping to provide comprehensive & sector diversification and risk management to wealth management is an extensive team of maximize your portfolio returns. Programs include: professionals, including Portfolio Managers, 1. Private Investment Management - PIM our Financial Planners, Estate Planning Specialists, premium level of discretionary wealth management. Consultants, Tax Strategists and Research Analysts. Highlights include: Freedom, custom portfolio, THE MG WEALTH MANAGEMENT APPROACH segregated securities, IP statement, asset mix for life 1: Learning about each other stage, model portfolio tracking, growth and income 2: Developing your personalized IP investment plan. needs, risk tolerance, top & bottom up management. 3: Putting your plan into 2.Professional Discretionary Investment Portfolios. 4: Integrating complementary wealth services A+ Investment Program: is our institutional level 5: Taking care of your lifelong needs platform with 40+ Investment Manager choices.

6: Monitoring and reporting results Global money managers including Beutel Goodman, Portfolio Management Highlights: Franklin Bissett, Guardian, Jarislowsky Fraser, RBC 1. Learning about each other. Questionnaire on GAM, Caldwell, Brandes, & Franklin Templeton. investment needs, objectives, and risk. 3.Professional Non-Discretionary Management - 2. Investment Policy Statement. The IPS statement Advisor our premium level of non-discretionary expresses your personal investment objectives in a investment wealth management. Highlights include: document to guide the content of your portfolio, Discussion on each investments, custom portfolios, including making decisions, reporting on progress IP statement, asset mix, growth & income needs, and regularly reviewing your objectives. risk tolerance, top & down management. 3. Action Plan. Detailed proposal to get us started. Management fees are tax deductible for non- 4. Reviewing all our Wealth Management services registered accounts. including a financial plan and estate plan. 4.Traditional Transactional based accounts. 5. Taking care of lifelong needs, including creating Available for special situation accounts. detailed income projections. Advantages of Annual Management Fee Program. 6. Monitoring and reporting results. Ongoing  Premium money market and bond rates portfolio analysis, reviews and prompt service.  mutual funds with lower management fees  Investment Policy Statement (IPS)  Hedging through use of option strategies  Portfolio Valuation Report  Easier tax planning – tax loss switches o Asset Allocation, Income Projection, Rate of  Stop loss + Re-entry without extra fees Return, Capital Gains/Loss to average into and out of stock positions  Tax reporting, T5 and T3 etc. (See kit)  No transaction commission places the focus  RBC CM Quarterly Strategy, MG Weekly on merits of investing instead of its cost. Newsletter, Focus List and Stock of the Day  Fee % deceases as value increases ACCOUNTS & SERVICES WE OFFER INVESTMENT VEHICLES WE USE: Investment Account, Options, Equity Credit Line, Allocation includes CDN, US, and International Corporate, Holding Co., Charitable Foundation, Tax Fixed Income Equity Income & Growth Free Savings Account (TFSA), Registered Education MM, GICs Small Cap. Savings Plan (RESP), Registered Retirement Savings Bonds, Converts Medium Cap. Plan (RRSP), Registered Retirement Income Fund Preferreds Large Cap. (RRIF), Individual Pension Plan (IPP), DS Family High Income Balanced Trust Acct, Registered Charity Gift of Stock Acct, ETFs & Mutual Funds (open and closed) Annual Tax-Assisted Flow-Through Share Program

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COMPREHENSIVE WEALTH MANAGEMENT STRATEGIES

1. Financial Planning Ted Chan – our Financial Planning Consultant provides solutions for simple or complex financial planning:  Comprehensive financial plan  Taxation of the corporation at death and  Addressing all aspects of your financial affairs more.  Including cash and debt management Also:  Tax and investment planning  Business planning  Risk management  Estate planning  Retirement and estate planning  Children’s education and inheritance  Business succession  Family trusts for disabled dependents  Withdraws from corporation tax- effectively  Retirement planning

2. Insurance Planning Andrew Sipes – As estate planning specialists, they will focus on:  Personal and corporate insurance solutions to increase your net worth and reduce the impact of taxation.  He can also ensure your wealth is transferred to your heirs in accordance with your wishes. Insurance Strategies include:  Whole life  Keyperson Insurance  Critical Illness  Term life  Corporate Estate Bond  Insured Annuity  Long Term Care  Insured Retirement Plan (IRP)

3. Wills & Estate Planning Ariel-Charles Guigui – Our Will and Estate Consultant offering information on structuring your estate in an efficient and tax-effective manner, providing you with a report outlining various estate planning issues:  To explore in further detail with your own  Reduce the taxes and expenses of an estate lawyer or accountant  Simplify and speed the transition of assets to the  Valid & Current Wills for All in Family next generation  Use of living trusts  Ensure that your beneficiaries are protected.  Planned Gifting  Different types of Power of Attorney

4. Tax Planning Prashant Patel – A number of solutions that can simplify the tax planning process including;  Tax-efficient charitable giving  2015 Home Buyer’s Plan Withdrawals  Family income splitting strategies  Consider Paying Yourself a Bonus  Eligible Retiring Allowance  Sale of Private Business Shares  LIRA Conversion to LIF/RLIF  US Estate Tax Planning for Canadians

5. RBC Estate & Trust Services, Royal Trust Karen Snowden-Staecey – provides individuals, families and businesses with valuable estate, trust and incapacity services:  Assistance in the preservation, management and transfer of wealth between generations by providing solutions to implement clients’ estate and trust plans  Financial security and peace of mind to elder Canadians who require assistance in the management of their affairs as they grow older  Professional and impartial expertise in delivering estate and trust services o Strong history and legacy in managing fiduciary businesses o Professionals who have technical and practical experience o Compassion and understanding of the client’s family’s experience

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THE MACKAY GROUP NEWS

Bruce's Comments Is it time for a Financial Review and Checkup? Our Mission Tax rates are increasing, financial solutions are “To provide our clients superior investment advice, evolving and RBC's suite of services has expanded products and service at RBC Wealth management to meet our clients' needs. We'll review your Dominion Securities since 1981.” investment portfolios and introduce you to our expanded team of Wealth Management Bruce MacKay, HBComm, CIM professionals and the full range of services we offer. Portfolio Manager, Investment Advisor,

Vice President and Director Andrew's Portfolio Managements Comments Andrew Slivinsky, CIM, PFP, Senior Associate Advisor Proper portfolio construction is the key to meeting Kristine MacKay, MBA, Associate Wealth Advisor your financial goals. The variety of investment Christopher Nicolaides, CIM, DMS Associate Advisor choices can be daunting. Let our team help simplify Melissa Crawford, Associate Advisor the approach, narrow your focus, mitigate tax, and Madeleine Howard, Associate plan for financial success throughout retirement.

Kristi's Business Development & Wealth Estate + Financial Planning Advisors Management Comments Ted Chan, Financial Planner Would you like a Financial Plan, Will & Estate Ariel-Charles Guigui, Will and Estate Consultant Consultation and Insurance review? We can also Prashant Patel, Tax Consultant provide you RBC banking, private banking Andrew Sipes, Estate Planning Specialist Karen Snowdon-Steacy, Senior Trust Advisor and mortgage lending assistance. MacKay Group Wealth Management Melissa's Administration Comments www.mackaygroup.com Is your account information up to date – including Brookfield Place investment objectives & risk parameters, beneficiary 181 Bay Street, Suite 2200 information, dividend reinvestment plan, monthly Toronto Ontario, M5J 2T3 payment plan and banking information? Telephone: 416-842-7120

Christopher’s Portfolio Management Comments MacKay Group & RBC Foundation I will work with you to manage your accounts, We have contributed $550,000+ over the years. provide recommendations, identify opportunities Charities we support in 2019 - Jewish National and assist with client service to ensure all your Fund, Canadian Wildlife Federation, Canadian Civil needs are met. Liberties, Toronto Public Library Foundation, ABC Life Literacy, Canadian Canoe Museum, Erin Oak Madeleine’s Admin. and Research Comments Kids, Trillium Hospital Foundation, CAMMAC, Have you topped up your TFSA? RSP? RESP? I will Kids Cops & Computers, Ontario Track III, Camp work with you to make sure you are maximizing Winston & The Barth Foundation. your portfolio. I assist Bruce on our research too. We are especially proud of our daily stock of the day research.

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Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts and prospectus before investing. Mutual fund securities are not covered by the Canadian Deposit Insurance Corporation or by any other government insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Past performance may not be repeated. This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This commentary is based on information that is believed to be accurate at the time of writing, and is subject to change. All opinions and estimates contained in this report constitute RBC Dominion Securities Inc.'s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Interest rates, market conditions and other investment factors are subject to change. Past performance may not be repeated. The information provided is intended only to illustrate certain historical returns and is not intended to reflect future values or returns. Securities or investment strategies mentioned in this newsletter may not be suitable for all investors or portfolios. The information contained in this newsletter is not intended as a recommendation directed to a particular investor or class of investors and is not intended as a recommendation in view of the particular circumstances of a specific investor, class of investors or a specific portfolio. You should not take any action with respect to any securities or investment strategy mentioned in this newsletter without first consulting your own investment advisor in order to ascertain whether the securities or investment strategy mentioned are suitable in your particular circumstances. This information is not a substitute for obtaining professional advice from your Investment Advisor. The commentary, opinions and conclusions, if any, included in this newsletter represent the personal and subjective view of the investment advisor [named above] who is not employed as an analyst and do not purport to represent the views of RBC Dominion Securities Inc. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The returns and performance information presented here does not reflect actual client portfolio or composite returns. The performance information presented in this report is based on a hypothetical model portfolio, and is intended to help illustrate the general performance of the investment strategy while removing the variability that results from implementation at a particular client level. The model portfolio reflects the actual investment recommendations (buys, sells) of the strategy as they were communicated historically; however, a number of implementation assumptions (which may include but are not limited to the timing and diligence with which the portfolio is rebalanced, the execution price for securities transactions, and any trading and account related costs, fees, or commissions) have been made when calculating the model returns that may be difficult or impossible for any investor to exactly replicate the model portfolio. For this reason, there is no expectation that the model returns will perfectly replicate the actual performance of any client following the same guided portfolio strategy. Specifically, the following assumptions have been made when calculating model portfolio returns: the portfolio is rebalanced monthly and any time a change to portfolio holdings is made; market close prices are used for all valuations; and returns are gross of all account fees and transaction costs. Insurance products are offered through RBC Wealth Management Financial Services Inc. (“RBC WMFS”), a subsidiary of RBC Dominion Securities Inc.* RBC WMFS is licensed as a financial services firm in the province of . RBC Dominion Securities Inc., RBC WMFS and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. and RBC WMFS are member companies of RBC Wealth Management, a business segment of Royal Bank of Canada. ® / TM Trademark(s) of Royal Bank of Canada. Used under licence. © 2018 RBC Dominion Securities Inc. All rights reserved.

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