Volume 6 • 2019 • Issue 8

41 Issue 8 | 2019 | S upporting Y our P ractice A dip into negative territory is not likely in the cards for North America, but with an election next year, President Trump has been lobbying for lower rates, even to zero. A recession could leave central banks with little choice but to head in that direction. What Does the New Normal Mean for Your Investments? • Fixed income will continue to play an important defensive role in your portfolio, but you need to be realistic about future returns. • People holding cash in bank accounts get next to nothing in interest. • Equities are cyclical and have performed above expectations for the past decade. With the potential of a recession on the horizon, this may not be an optimal time to shift assets toward equities. • Low interest rates are pushing up housing prices, with potential bubbles happening in many major cities around the world, including here in Canada. Where is the Good News? • Bond funds have seen increased returns because these funds hold higher yielding securities. CDSPI’s bond funds have done particularly well. They have seen an average return of 5.74% over the past year and they are all in the top quartile for five-year performance. 5 CDSPI’s new Core Plus Bond Fund has been especially popular. It combines a base of high-quality bonds with plus strategies that include mortgages, high yield bonds, and emerging market debt for added return. • There is also the opportunity to take advantage of historically low interest rates to refinance debts. In today’s low-rate environment, you need to pay increased attention to your investment choices. Talk to an Investment Planning Advisor 6 to discuss how CDSPI can help you navigate the low interest ecosystem. An Investment Planning Advisor from CDSPI Advisory Services Inc. is always available to answer your investment questions. Just send an email to investment@cdspi.com or give us a call at 1.800.561.9401 . Tom Kawasaki, CFP ® Investment Planning Advisor, CDSPI Advisory Services Inc. Visit cdspi.com to learn more. CDSPI is a not-for-profit organization whose mission is to provide a broad and meaningful range of customized financial solutions to the dental community, covering every facet of their lives. Sources 1. A Decade of Low Interest Rates is Changing Everything , BNN Bloomberg, July 2019 2. How Negative Interest Rates Work , Investopedia, July 2019 3. The Unstoppable Surge in Negative Yields Reaches $17 Trillion , Bloomberg, August 2019 4. Zero-bound , Investopedia, July 2019 5. As of September 30, 2019 6. Advisory services are provided by licensed advisors at CDSPI Advisory Services Inc. Restrictions may apply to advisory services in certain jurisdictions. Segregated funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained in this article is of a general nature only and should not be considered as personal investment or financial advice. For specific advice about your situation, please consult with your financial advisor. Any investment and economic outlook information contained in this article has been compiled by CDSPI from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by CDSPI, its affiliates or any other person as to its accuracy, completeness or correctness. CDSPI and its affiliates assume no responsibility for any errors or omissions.