PM discusses his standouts from another eventful year
The first was staying in the market – which wasn’t easy given the advice clients were hearing from others to be careful, which made them want to pull back.
“It was very hard this year to just stay invested and continue to own equity, continue to own growth, and be on the beta side of that trade, and not just go all cash as defensive at many points,” Tetrault told Wealth Professional's podcast WP Talk.
The S&P 500 climbed from 3600 to 4600, so it would have been easy to get out to protect capital and wait for a pullback. But, he held firmly to their strategy, reminding clients about their earnings growth.
“I think that a big success this year was staying fully invested and fully participating in that market rally,” said Tetrault, “and just making sure to get the clients on board with being invested in equities and bringing over their cash to invest it. As a result, the clients have done really well.”
Tetrault’s second highlight was taking “a rather decent position in crypto for our clients about a year ago”.
He chose an Ethereum ETF for his maximum growth clients who had a higher risk tolerance and were willing to withstand the volatility. He put from 2% to 5% of their portfolio in crypto, and it’s grown up to ten-fold.
“I figured there was going to be a real demand, so I was simply playing a hunch to own that asset class, especially for higher risk individuals, and it turned out great,” he said.
While Tetrault doesn’t believe crypto will replace currency, he does think there’s an opportunity for more adoption since the retail demand for crypto hasn’t peaked yet. He also thinks more advisors are talking to their clients with more risk tolerance about it.
Oil and gas
Tetrault also added Canadian oil and gas sector exposure to his clients’ portfolios over the last year.
“It was something that we were a little late on, but we were still very, very, very early in the game,” he said.
“We didn’t know the Canadian oil and gas stocks would rally this much,” he said. “If you bought some of these Canadian names, either the small cap or mid-caps, or even just some of these Canadian oil and gas mutual funds, you’ve done quite well, and I’m happy that we made that play.
“Now, obviously, some of our clients don’t want oil and gas exposure at all, and we don’t have it in their portfolio, but anyone who’s agnostic to the sector has gotten a benefit.”