Investment UPDATE - RBC Global Asset Management
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28263 (01/2019)
Investment UPDATE
Winter 2019 Edition
In this issue
§§Adjusting to life’s financial changes
§§New ways to help you save and plan
§§One-minute market update
Adjusting to life’s financial changes
A comprehensive financial plan is designed to help you meet both your short- and long-term goals, and evolve with your
needs over time. It can be difficult, however, to stick to your current plan when markets turn volatile or life takes an
unexpected turn. But it’s at times like those that a personalized plan best serves its purpose.
Many investors may think that a financial plan only focuses
on long-term, predictable goals such as saving for a child’s UNIVERSITY
university education or retirement. But shorter-term goals,
such as building up an emergency fund for unexpected
expenses or saving for a down payment on a house, should
be factored in as well. And when it comes to building a
portfolio, a well-structured approach to balancing short-term
with long-term goals can help you stay invested, and keep
your plan on track through all market, and life stages.
Balancing your short- and long-term goals
One option for managing short-, medium- and long-term needs is to divide your portfolio into different investment ‘buckets’
to allow you to plan for different time horizons and goals. An approach like this can help insulate a portion of your portfolio from
market volatility to ensure your short-term financial needs can be met. In addition, your long-term investments can remain
Short-term Medium-term Long-term
invested longer to provide the portfolio growth you may need.
goal goal goal
Short-term Medium-term Long-term
goal goal goal
Emergency fund, Home down payment,
Sample goal Retirement, Education savings
vacation sabbatical
Time horizon 1-3 years 4-9 years 10+ years
For illustrative purposes only
Solutions to suit your needs The value of advice
Whether you need cash on hand for short-term requirements, Financial goals can – and often do – evolve over time.
long-term portfolio growth, or something in between, RBC® Unexpected events and changing priorities are also a part of
offers a comprehensive lineup of investment solutions. This life. That’s why having the right plan is so important.
includes High-Interest Savings Accounts, GICs and a broad At RBC, it’s easier than ever to get personalized advice. In
range of mutual funds from RBC Global Asset Management. addition to helping you choose the right solutions, your RBC
And, with digital tools like NOMI Find & SaveTM, we can also advisor and our new online service – MyAdvisor® – are there for
help you automatically maximize your savings. you, to help you build your customized plan, prepare for the
You can work with your RBC advisor to find the right solutions unexpected and monitor your progress as you work towards
for each of your buckets – to help meet any timeline and goal, your financial goals.
and help keep your plan on track. To learn more, contact your RBC Advisor today.
2 Investment Update I Winter 2019
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Saving made easy – and it’s free
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Always stay up-to-date
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To get started, download the RBC Mobile1 app and turn on NOMI † †
Find & Save, or visit rbc.com/nomifindandsave for more information.
1
RBC Mobile is operated by Royal Bank of Canada, RBC Direct Investing Inc. and RBC Dominion Securities Inc.
See all your financial possibilities in one view
with MyAdvisor
Managing money doesn’t have to be stressful and you don’t “I am feeling good, because I needed a reality touch
have to be an expert to make sense of it all. Exclusively for RBC between where I am and where I need to be to accomplish
clients, MyAdvisor is a no-cost, online service that provides a my objectives. MyAdvisor was able to provide a clear picture
great combination of tailored investment advice whenever you and plan to get there, and as a result I increased my
need it and an online tool that can capture all your savings and investment without hesitation.”
investments in one place, even those outside of RBC. We can
help you: Jaime Q., MyAdvisor client
Build a personalized savings plan that you can access and
update anytime
Stay up to date with your finances to make sure you’re on
track to meet your goals
Conveniently connect with an RBC advisor by phone, video
chat or in person
To get started, sign into RBC Online Banking or
connect with an RBC Advisor today.
Investment Update I Winter 2019 31
min. ONE-MINUTE For the full Winter 2019 Global Investment Outlook,
please visit rbcgam.com/gio.
MARKET UPDATE
ECONOMY FIXED INCOME EQUITY MARKETS
After enjoying solid and accelerating global
§§ §§Central banks have been tightening monetary Equities have experienced steep declines in
§§
growth in 2017 and the first half of 2018, policy in response to diminishing economic most regions in 2018, especially in emerging
momentum has waned and we expect this slack and above-average inflation. markets.
trend to continue into 2019. Our models suggest North American 10-year
§§ While valuation risk has been reduced, rising
§§
Protectionism, European politics, rising
§§ sovereign-bond yields are near equilibrium, interest rates and firming inflation may limit
interest rates, firming inflation and troubles but that unsustainably low yields in other gains in stocks. Moreover, earnings growth is
besetting specific emerging-market countries regions represent significant valuation risk. expected to slow as tailwinds from tax cuts
are among the risks to our outlook. We continue to believe that yields will rise
§§ fade, economic growth decelerates and profit
We budget for slower growth moving forward
§§ over the long term, driven by an increase in margins come under pressure.
as financial conditions have worsened and real interest rates to historical norms, but
Stocks still offer superior return potential
§§
the boost from the U.S. fiscal stimulus slowing economic growth could limit how far
versus bonds under reasonable assumptions,
program begins to fade. yields rise in the shorter term.
as long as earnings continue to grow as
We have lowered our global growth
§§ Our recommended asset mix for global,
§§ analysts expect.
expectations slightly, but they are still near balanced investors remains underweight
the upper end of the range of the past seven bonds as even a modest rise in rates will be We remain overweight equities in our
§§
years. a headwind for fixed-income investments. recommended asset mix for global, balanced
However, recognizing that bonds can provide investors, but our tactical weight is well below
a cushion in an economic downturn, we took our peak exposure from earlier in the cycle.
advantage of the increase in yields earlier this
quarter to add to our fixed-income allocation.
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Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees
and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be
repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers.
Investment advice is provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc. (RBC GAM), Royal Bank of Canada, Royal Trust Corporation
of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.
Investment and economic outlook information contained in this report has been compiled by RBC GAM from various sources and reflects our view on
December 31, 2018. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM,
its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions.
All opinions and estimates contained in this report constitute our judgment as of the indicated date of the information, are subject to change without notice and
are provided in good faith but without legal responsibility. Interest rates and market conditions are subject to change.
The material in this newsletter is intended as a general source of information only, and should not be construed as offering specific tax, legal, financial or investment
advice. Every effort has been made to ensure that the material is correct at time of publication, but we cannot guarantee its accuracy or completeness. Interest rates,
market conditions, tax rulings and other investment factors are subject to rapid change. You should consult with your tax advisor, accountant and/or legal advisor
before taking any action based upon the information contained in this newsletter.
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