Foresight - Summer 2026

“May you live in interesting times” is an English expression popularly misattributed as an ancient Chinese curse. While its interpretation could fall on either side of the “glass half full/half empty” metaphor, historically its interpretation falls on the negative side  - a curse - meant as an era of turmoil, tumult, upheaval and strife. Digging deeper historically, its origin is likely in the early 20th Century, not ancient, and from the West, not Asia.

Today’s world story-lines provide ample fodder to fall into this “curse”. Investors always are drawn into the inner game of oneself to speculate upon the state of the world and the impact upon their investment portfolio. Since the dawn of time, humanity has been fascinated by predicting the future… most famously historically with the Oracle at Delphi and the Greek expression “gnothi seauton”…”know thyself”.

Through four decades, we have endorsed the “steady hand”. We have shared Nick Murray’s “Apocalypse du Jour”, which pointed out that there is always something out on the horizon that one can pin a negative stance. For three decades, we have shared the wisdom of Dimson, Staunton and Marsh from the UK with their publication “Triumph of Optimists” (on our website-Fall 2023 edition), which analyzed in great detail the world (literally) of investing over the last 120 years.

Inside the issue, we will offer you eight different time insights into the stewardship of your portfolio...ranging from a few days to monthly to quarterly to annually to three years to your investing history and, finally, to decades and a century.

Our Website

We recently created a Topics Library, which will allow you to access past Foresight articles on topics that interest you today.

We recently also added an article to our website at “Library, Annual Report Q&A” which helps you to better understand your Trivest Annual Report.

The next step forward…..

We are very pleased to introduce the fourth member to our team. Cassidy Karin Foley, BCom (Hons) graduated this Spring from the UBC Sauder School of Business. She interned with us last summer. Cassidy grew up in West Vancouver and lives in the community. She will be an “analyst”, en route to a future portfolio manager designation through future academic pursuits and training. We look forward to you meeting her.

INVESTING UPDATE: PART ONE

“Recovery” and “Give Back” returns and hibernation

We prepare rolling 12-month returns throughout the year, as each client has their own fiscal reporting period. This regularly provides us throughout the calendar year with hard number-crunching return data. We aggregate each month’s reports to calculate the average return for each rolling 12 month period. This “average” statistic has an *asterix beside it to the extent that each portfolio has its own risk profile in the asset allocation between fixed income and equity markets. That said, almost all of our portfolios carry a 50/50 or 40/60 allocation respectively, so the difference is not huge.

In each annual report, we provide return data for 1 year, 3 year, 5 year, 10 year and since-inception.

In the Fall of 2023, we introduced an important concept, given the market conditions of that time. The term we phrased was a “recovery” return, which is a huge return you make one year...making you proud and happy. However, the previous year was awful, and you lost money. Over the two years combined, you probably made zero. While that was at least “break even”, it also means that it was two years in your investing life that did not advance your wealth, which impacts your long term inception return.

In the present investing world, we now are seeing the opposite of that..not one, not two but three years in a row of large returns….resulting in….

Recent three-year ANNUAL compound returns to:

January 2026	February 2026	March 2026
11.07%	14.08%	10.6%

In the Spring issue, we introduced a second term for this phenomenon...a “give back” return (Note Staunton et al use the term “drawdown”). Here we draw the metaphor of a hibernating species. We filled up with a “layer of fat” in these three years, earning beyond a long term return, which we  may need to draw from in the “ winter” of a coming future downturn.

INVESTING UPDATE: PART TWO

Long history and small impacts

The inception return is the most important to an investor, but it doesn’t carry much impact until it has been a long duration. We have been delivering return data since we opened in 1994; ergo, most of our client inception data is long enough to be instructive.

One of the beauties of a long inception compound return is that it gives peace of mind to downplay the perturbations of current returns...and in both directions!

For instance, a client’s 28 year annual compound return was 7.28%. The next year the portfolio lost .6 of 1%, only dropping her 29 year return to 7.0%; then a 9.55% return the very next year brought the 30 year compound return back to 7.08%. The last 16 years for this client have seen the annual compound return from a low of 7% to a high of 7.57%.

INVESTING UPDATE: PART THREE

Pick your favourite day….carefully!

In the Summer 2021 Foresight issue, we cited data from JP Morgan of being in or out of the market…..Imagine you stepped aside and missed the market’s 10 best days in 20 years. “This would reduce your 20 year return by more than half”. If you missed the best 30 days in 20 years, “your 20 year return would be negative”. “Worse still… 7 of those 30 best days showed up within weeks of the worst 20 days”!    

INVESTING UPDATE: PART FOUR

Why you have an Asset Allocation Plan

Five years ago, we started a data base to help us—and you—to understand how returns are made in a portfolio. You specify two components in your Asset Allocation Plan: fixed income (“D”) and the world’s stock markets (“E”). Each month, we drill down into a sample portfolio to peel apart the contribution of these two components in annual returns of income and price change.

The equity component overwhelmingly drives the returns. Note that the six-month period from June 2022, when both components had negative returns.

INVESTING UPDATE: PART FIVE

100+ years of perspective

We first covered Staunton et al’s Triumph of Optimists in the Winter 2010 edition. It is worthwhile to refer back to that. One insightful table shows two things: the non-cumulative geometric nominal returns in Canada by decade through 1900-2000; followed by the cumulative nominal returns across decades...ultimately for the entire century. Observations: even just smoothing out any single decade of returns reduces volatility, ranging across the ten decades from 1.1% to 14.9%, and the entire accumulating ten decades only ranged from 7.5% to 9.5%. Within those decades, history included the likes of WW1, the Great Depression, WWII, Korean War, Viet Nam War, the Sixties upheaval, Cuban Missile Crisis and Glasnost, to name a few.     

INVESTING UPDATE: PART SIX

Our Micro Monthly Calls To Action

We review every account every month, using proprietary portfolio metrics that we have developed over the years. This process was explained in our Foresight newsletter of Fall 2024 (see website). The collection of monthly metrics gives us hints/suggestions for strategic actions. While there may be common threads across our whole portfolio, the individual calls are unique, for example in recent months:

• Sold materials and base metals and bought fixed income

• Sold same but bought REITs, healthcare and Europe

• Sold banks and bought fixed income and Europe

• Sold global telecoms and bought fixed income and healthcare 

• Sold gold and bought fixed income and technology

• Sold gold and bought fixed income

 INVESTING UPDATE: PART SEVEN

Quarterly ups and downs

We have been tracking quarterly market data for nineteen years on a beta file. This provides some perspective on shorter term market insights:

· Returns were positive 75% of the time · The average positive return was 2.42% · The average negative return was –1.35% · The biggest positive return was 7.20% · The biggest negative return was –4.49%

· Longest run of positive quarters was 16 · Longest run of negative quarters was 3 · Unrealized gains occurred 2/3rds of the time · Highest unrealized gains was 6.22% · Highest unrealized losses was –7.51% · Foreign exchange gains/losses were equal

 Of interest, over those 19 years the proportionate contributions of cash income (from dividends and interest) versus appreciation were almost equal in driving portfolio return.

 INVESTING UPDATE: PART EIGHT

Monthly movements in the equity markets

Each month since July 2024, we undertake an analysis of approximately 50 portfolios to dissect the equity component between Canadian and global markets as to monthly price movement (ie excluding dividends).

Note that the Canadian and global markets typically move in the same direction each month, but differ in amplitude. Further, during the above time period, the Global equity markets (S&P Global 1200) generated a total return of 39.3% and the Canadian equity markets (TSX 60) generated a total return of 60.0%.

The data in Parts 1, 2, 4 ,6 ,7 and 8 are drawn from specific live client files, which may not directly reflect your own portfolio holdings. However, our portfolios are built around core holdings, and strategic asset allocations tend to be within a 10% band.

NBIN VISION/26 Conference

Mike attended the 2026 NBIN VISION/26 Conference in Toronto, joining 300+ owners and leaders of wealth management firms to discuss the future of wealth management in Canada. Key themes included technology-driven improvements to our advisory services, market growth opportunities, and strategies for navigating evolving economic conditions. He returned with valuable insights to help support continued innovation and client service excellence at AFT.

Paperwork

National Securities Regulators required “re-papering” the relationships between investor and investment manager. This spanned four documents and approx. 60 pages. We have been working on this since January and brought it to completion at the end of May. We tried to keep this burden largely on us but required some participation from you. We apologize for the imposition and thank you for your assistance and patience.