Tycuda Group September 2019 Report

Monthly Investment Report

At the Tycuda Group we strive to keep our clients up to date and educated on current market conditions, our investment strategies, stock highlights, and anything else we think you might enjoy. In our monthly investment report, you will find all this information bundled in a single package, delivered right to your inbox. If there are any topics you want us to cover or have interest in please don’t hesitate to send us and email or give us a call!

September In Review I’m reminded at this time of turmoil of the famous quote from Peter Lynch. Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves. Unlike last year, both stock and bond markets have surged. While stocks are down this month, they are still up meaningfully on the year and are within single digits of their recent record high. Bond prices were driven higher by the continued downward trend in global yields (bond prices and yields move in opposite directions). Yet many investors still worry about a potential recession. One popular recession indicator is the “inverted yield curve,” when short-term bond yields are higher than long-term bond yields. In the past, the U.S. Federal Reserve kept hiking interest rates after inversion, which likely played a part in causing subsequent recessions. We don’t expect them to make the same mistake. In fact, the markets have priced in three more interest rate cuts to the end of the year.

September Click HERE to access the 01 Tycuda Performance Investment Report webpage.

Click HERE to access 02 you Leede Jones Gable client login.

03 Fear and Greed Index

Let’s Get Political & Educated… The 2019 Canadian federal election (formally the 43rd Canadian general election) is scheduled to take place on October 21, 2019, to elect members of the House of Commons to the 43rd Canadian Parliament. Parliament was dissolved by Governor General on September 11, 2019 on the advice of Prime Minister . The 40-day campaign will see the incumbent Liberals attempt to retain their majority that they won in the 2015 election. Two of the three major parties will contest this election under new leaders: the Conservative Party, led by , and the under .

What’s Going on Around Us? 50 years ago, in 1949 what was making headlines: • The People’s Republic of China, the Federal Republic of Germany and the German Democratic Republic (East Germany) are founded. Indonesia gains independence from the Netherlands. The civil war in Greece ends. The Geneva Convention is agreed. • NATO is established

• The Soviet Union detonates its first atomic bomb.

• Apartheid becomes official policy in South Africa. • The first non-stop circumnavigation of the world by an aircraft occurs. • Lego, 45 rpm records, Porsche cars and the Xerox photocopier are introduced. 2019 – Quite a different world. • Unconventional politics in the US, U.K. Italy and many other countries.

• Trade wars.

What is up with Canada? Despite Q2 GDP coming in strong at 3.7% annualized (vs 3.0% consensus), it was mostly due to a temporary increase in exports. Consumer spending continues to slow which further confirms that Canada’s economic momentum is starting to give way heading into the second half of the year. Wage growth remains high and the labour force shrank two consecutive months in June and July. Inflation is around 2%, and consumers are being helped due to falling energy prices. For most of the year, the general expectation has been that the Bank of Canada would keep rates on hold for 2019. The beginning of August saw U.S.-China trade tensions increasing, likely triggering the probability of a 25-basis point rate cut by year-end climb from 25% to 73%. The Canadian economy is more sensitive to external factors than the US.

In the US Trump Impeachment Heats Up A new source of uncertainty has emerged that could have a significant impact on markets. Sept 24th House Speaker Nancy Pelosi launched a formal impeachment investigation against President Trump over dealings with the Ukraine. President Trump has promised to release a full unredacted transcript of the phone call in question, so it remains to be seen if this potential political crisis will blow over or escalate further. Potential impeachment could impact investing in two ways. First, the political uncertainty created by past impeachment drives has negatively impacted markets. There was a 40% decline in US markets around the time of the 1973-74 impeachment drive against President Nixon (who resigned), and a 20% selloff in US markets around the time of the 1998 impeachment drive against President Clinton (who remained in office). Second, dealing with an impeachment investigation could distract the White House and/or limit its ability to make progress on other issues such as trade talks with China which could hurt the economy.

Stocks/Trades of Interest: Security Approximate Buy $ Sell $ Approximate Comments Hold Period Gain/Loss % BRC (Brady 7 Months $46.89 Still 13% Brady (NYSE:BRC) is a manufacturer of Corp) Holding complete solutions that identify and protect people, products and places. Brady’s products help customers increase safety, security, productivity and performance and include high- performance labels, signs, safety devices, printing systems and software. BRC is held

in our Tactical US Composite. DGR.B 1 Year 5 $24.23 Still 16.5% DGR.B is a U.S. Dividend Growth Index (WisdomTree Months Holding ETF. DGR.B is held in our Tactical CDN

U.S. Quality Composites. Dividend Growth

Index ETF) AQN 7 Months $14.70 Still 25% Algonquin Power & Utilities Corp. is a (Algonquin Holding growing renewable energy and regulated

Power & utility company with assets across North Utilities America. AQN is held in our Tactical CDN Corp.) Composites.

Chart of the Month:

1-year chart of XBB, IShares Core Canadian Universe Bond Index ETF (White line) Vs. TSX, S&P/TSX Composite Index (Blue line) Vs. SPX, S&P 500 Index (Red line)

Source: Quotestream Professional 4.0

What’s the Tycuda Group Up To? Getting our winter gear out and getting ready for the cold, both in the weather and the markets. Our bond

strategy is a key tool our clients use to minimize volatility and essentially come in from the cold the stock markets can create. Our bond strategy has done exceptionally well over the years and we have been long- term supporters of PIMCO. This link is a short discussion with Dan Ivascyn, Chief Investment Officer with PIMCO. Dan discusses investing in a low-yield world and where he sees opportunities.

Interesting Podcasts and Articles– worth your attention • What I Learned From Losing $200 Million. The 2008 financial crisis taught me about the illusion of

control, and how to give it up. This is a great read. Bob Henderson was a derivative trader, but his experience on how he survived the loss can be applied, at least psychologically, to all of us and has infinite value, even beyond financial wealth. • The Four Tools of Discipline. Life is full of problems. We can moan about them, or we can solve them - Scott Peck • Two kinds of 9 to 5 job. When we see passionate people at work (at a chess tournament, a brainstorming session, writing a play or counseling), we have trouble imagining doing it for six hours in a row, never

mind eight.

Disclaimer: All information and charts used for this report, including Featured Canadian Dividends, Featured American Dividends and Featured Commodities Driven Dividends, are courtesy of QuoteStream, Bloomberg, Google Finance, Yahoo! Finance and Morningstar, Inc. Prices and other numbers associated in this newsletter are accurate as of the date of publication. The comments and opinions expressed herein reflect the personal views of Miles Clyne. They may differ from the opinions of Leede Jones Gable Inc. and should not be considered representative of the research beliefs, opinions or recommendations of Leede Jones Gable Inc.

The information included in this document, including any opinion, is based on various sources believed to be reliable, but its accuracy and completeness is not guaranteed and Leede Jones Gable Inc. does not assume any liability in providing it. The information provided is current as of the date appearing on the document and Leede Jones Gable Inc. does not assume any obligation to update the information or give a description of further developments relating to the securities or material discussed. It is for information only, is subject to change at any time, and does not constitute an offer or solicitation to buy or sell any securities referred to. The information presented here and any financial service being offered is directed only at persons who are residents of a Canadian province or territory where Leede Jones Gable Inc. is licensed. Leede Jones Gable Inc. is not permitted to recommend buying, selling or holding securities of any issuer to which it is related, and in the course of a distribution, to which it is connected, unless it makes a complete statement of its relationship, if any. Leede Jones Gable Inc. is not permitted to recommend buying of any secondary market securities of an issuer for whom it is actively engaged as an underwriter of a new issue. Leede Jones Gable Inc., their affiliates, directors, officers, and employees may buy, sell, or hold a position in securities of a company mentioned herein, its affiliates or subsidiaries, and may also perform financial advisory services, investment banking or other services for, or have lending or other credit relationships with the same. Directors, officers or employees of Leede Jones Gable Inc. may serve as directors of any company mentioned herein, its affiliates or subsidiaries. © Leede Jones Gable Inc. 2018. Member CIPF and IIROC.