NEWSLETTER

In our High Growth portfolios, we added a 3% - 5% position in the Forge First Long/Short strategy. For people who are unaware of this strategy, in short, it will buy and sell equity positions. It tends to have a value-oriented bias to the strategy. Because it sells stocks this strategy has the ability to be able to perform in poor markets. With markets showing increased volatility, adding positions like this should reduce the risk as well as the overall volatility for those portfolios.Within all of our portfolios we continue to hold on to the extra cash from our Eaton Vance sale as we have a few positions we are looking to get into pending the markets quieting down from geopolitical uncertainty.While the markets have shown some sluggish performance, we are optimistic that the 2019 year will be much better. We wish you all a Happy Holiday and New Year, and will see you all in 2019!

JANUARY - MARCH 2019

THE PORTFOLIO MANAGERS CORNERYour Personal Portfolio Managers: Kevin Haakensen, CFA & Kevin Hegedus, CIMHollisWealth, a division of Industrial Alliance Securities Inc., PWM Private Wealth Counsel Insurance Advisors, Hollis Insurance

Trade Wars! Trade Wars! Trade Wars! It seems as though all we hear on the news today concerns the US and China, and whether a deal will be reached or not. One day things seem to be going badly, and the next day seemingly well; in the end it is creating a lot of uncertainty in the markets right now. This uncertainty has led the markets to correct for the second time this year, which is unusual. I do believe the US and China will reach a deal; I’m just not sure when. 2018’s Q3 saw 78% of the S&P500 companies beat earnings’ estimates, as well as 62% of companies beat on sales. This shows the US economy is still producing strong results. The S&P500 is also trading at approximately 15.4X a price earnings multiple, which is in line with historical averages. Combined with other economic indicators, this has us believing we are experiencing a normal, temporary pullback before we see the markets rise higher again. 1

During this time our portfolios have been experiencing a lot less of the volatility than what the markets have been exhibiting. The alternative assets within our portfolio are the positions that continue to do well this year, and help to offset the losses that markets are experiencing with both stocks and bonds.

Sean Meshke, CFA, Portfolio ManagerHollisWealth, a division of Industrial Alliance Securities Inc., PWM Private Wealth Counsel.Insurance Advisor, Hollis Insurance

“A dream written down with a date becomes a goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true.” - Greg S. Reid

REMINDER: Our Saskatoon office is now located at 205-210 Wellman Crescent in Stonebridge. We are looking forward to serving you at our new location!

1 http://lipperalpha.financial.thomsonreuters.com/2018/12/sp-500-17q1-earnings-dashboard/

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Every now and again when the market experiences hiccups, we may need a few gentle reminders. We all know corrections are inevitable, but many people don’t realize how often they happen. Even when over the course of the year the market produces positive returns there can be some pretty dramatic swings. When things move, they seem to move

very quickly and dramatically, and can cause emotional behaviours. If we look at historical numbers for the S&P 500 going back to the 1920’s, the number of 5% corrections is north of 200.

If you look at the average time between those corrections, it has been 3.5 months. The first thing we have to understand as investors, is that this is going to happen. For every 2 steps forward there could be one step backward. A study conducted by US research firm Dalbar, called “The Quantitative Analysis of Investor Behavior” shows an alarming theme. Returns of the average mutual fund investor vs the S&P 500 Index between 1987 to 2016 were 3.98% vs the relative Index at 10.16%. A difference of over 6% per year. If you compound that, the difference in portfolios is huge. The report goes on to discuss a number of psychological reasons for this, which I won’t get into here, but rather would like to focus on what we do differently at PWM that can help to lessen this volatility. 1. Discipline When it comes to investing, the most important thing we can do for ourselves is to have discipline and a system in place. This way, if you are holding an investment that has gone down, you know whether you should keep it or sell. Having an unbiased advisor in your corner can pay off when making these decisions.

SuRvIvING vOLATILITy By Kevin Hegedus, CFP®, CIM, Portfolio Manager

May this holiday season end the present year on a cheerful note and make way for a fresh and prosperous new year. During the holiday season more than ever, our thoughts turn gratefully to those who have made our progress possible. And in this spirit we say, simply but sincerely ...

Thank you and best wishes for the holiday season

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2. Know Your Risk Tolerance and Have a PlanMany people when they first come to us are surprised at the amount of risk they are actually taking on in their portfolios. I have said numerous times over the years how important it is to have a written plan in place that uses realistic assumptions. That way, if it is determined that your risk tolerance is low or maybe you have more money than you will need and don’t need or want to take on risk, use a lower return when doing your planning. If you can’t or don’t want to stomach equities, don’t use a 7% rate of return in your plan, use 4% or 5% as an example, then see if you run out of money before retirement.3. Consider Alternative InvestmentsAt PWM we believe that the typical balanced portfolio in which you’re holding, as an example, 60% of your money in stocks and 40% in bonds, and then increasing the bond exposure as you age, will not work nearly as well in the next 10 years as it has in the past 10-20 years. We encourage investors to look at adding alternative strategies to their portfolios that may not only enhance returns but may also reduce risk and diversify It into assets that are not directly correlated to the stock or bond market. Some of these strategies include:a) Using a Hedge Fund that employs a long-short strategy. When thinking about investing in a stock, most investors would like to buy something for $10 and sell it for $12; that’s called being long. But you could also make money if that same stock went from $10 to $8; this is called shorting. So how does this work? Well, let’s assume a stock is trading at $50 per share. We have done our research, and we feel that when they report their earnings next week, they are going to miss their target. Typically, when this happens, the stock will trade down in value. How can we profit from this? Well, we could go to our broker and ask to borrow 1000 shares of ABC stock to be sold. Because we borrowed those shares, we have to give them back in the future. Let’s assume a week goes by, the company misses their earning target, and the shares drop to $45 dollars. In this scenario we would buy back the shares at $45 dollars, and return the shares to the broker, resulting in a $5 profit on 1000 shares, for a total of $5000 dollars. Over the last few years, as stocks have become more expensive, and we have moved higher in a market cycle, we have increased our exposure to this type of strategy that will either protect our client’s portfolios or make a profit in a market downturn. There can be some potential downside to shorting a stock. As experts we employ thoughtful decisions in using this strategy prudently.b) Reducing Bond Exposure. We believe that bonds may not be as lucrative as they have been in the past, if interest rates continue to rise. One option is to hold Private Debt; this is exactly what it sounds like. It’s privately-negotiated loans that, as investors, we are able to participate in. One example of this is called

Factoring, which is a financial transaction and a type of debtor finance in which a company will sell its accounts receivables to a third party at a discount. They could do this for a number of reasons - maybe to be able to meet their current financial obligations or, more often, because of an opportunity. As investors, we are participating in buying the receivables at a discount and collecting at full value a few months later.Another way to reduce bond exposure is by holding Private Equity. Again, this is exactly what it sounds like - investing in private companies vs publicly traded companies. There are many companies that used to be public that have delisted and become private again. A public company may go private for a number of reasons. In some cases, an acquisition can create significant financial gain for shareholders and CEOs, but also the reduced regulatory and reporting requirements can free up time and money so they can more effectively focus on the long-term goals of the company; a good thing for us as shareholders. As investors, there is another important reason to have some of your portfolio structured this way. In many cases, it can be more of a ‘ground floor’ opportunity with better potential gains; In addition, privately-held companies are valued differently, meaning less often than every 15 seconds, like many public companies. You have true diversification, because you are not directly correlated to the stock market. If the TSX drops by 20% next week, it is likely that unrelated sectors, such as energy corporations and a financial institution as an example, are going down in value. That’s because, as the index drops it can, and has many times, pulled down many of the companies that it is made up of. But if you own shares in a private company, it is not subjected to the day-to-day movements of the market. Because it is not valued every day like a public company, it helps to smooth out the ups and downs of your overall portfolio. To give you an example, I will reference two negative years for the TSX since 2010: the first was 2011 and the second 2015 - both down more than 8%. In those same years, our private equity fund produced positive returns of approximately 15% and 11%. This is not always the case, but an example of how private equity outperformed publicly-traded stocks.At PWM we believe that these are exciting times with numerous opportunities for wealth creation. Investments that were once available only to the ultra-wealthy are now available to non-accredited investors. By working with an advisor with a Portfolio Manager designation, it opens up the door to many opportunities. We believe everyone owes it to themselves to become more educated on how alternatives can potentially enhance returns in their portfolios while reducing risk. While volatility can be stressful, knowing how to manage it, and making thoughtful decisions regarding your portfolio management, can go a long way toward smoothing the journey.

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THE RObb NASH PROjECT CROSS COuNTRy TOuROn November 28th and 29th our team at PWM, with many others, helped to bring the Robb Nash Cross Country tour to 24 schools and groups in Saskatoon and as far out as Davidson, Outlook, Biggar, Wakaw, Humboldt, LaLoche, and many more communities! Approximately 3000 Saskatchewan youth were reached and many breakthroughs were made! It was a bucket-filling day and we are so grateful to have been a part of it.

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WELCOME TO OuR TEAM: Kurtis Brunsch

Kurtis Brunsch, Branch AdministratorKurtis has been working in public practice for twenty years dealing with private enterprises in both the agricultural and industry sector as well as extensive knowledge in corporate and personal tax preparation. He took a break from public practice and spent several years in industry but realized during

this tenure that his true passion was with preparation of financial statements and as a result decided to return to public practice. Kurtis received his CPA designation in 1994 and took a position working with Deloitte LLP (Deloitte) in the private non-audit section where he worked on both review engagements and notice to readers. While employed with Deloitte he discovered he had a passion for public accounting and in order to advance his career and with encouragement from Partners of the firm, decided to article with Deloitte in order to attain his Chartered Accountant (CA) designation which he received in 2006. Having attained his designation, he eventually rose to the position of Audit Manager in the Private Sector. While working with Deloitte he was seconded out to an industrial client where he gained experience working in the industrial sector. Therefore, he

decided to venture into industry and during his time as a controller at a private industrial company he realized his true passion was in public accounting so decided to return to public practice. Throughout his career he has extensive experience working with both audit and non-audit clients as well as preparation and review of corporate and personal income taxes. Kurtis’ philosophy on life is to have a healthy mind and body so he exercises on a daily basis. He enjoys going out to watch movies as well as spending quality time with family and friends. He has a special bond with two nieces and spends a considerable amount of time in their company. He enjoys his daily workouts as well as listening to music and singing and he has recently developed an interest in writing songs.

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LIFE AFTER HARVEST

A TRANSITION PLANNING SOLUTION FOR THE FAMILY FARM

We will walk you through how to:

• Enjoy a financially-protected retirement• Increase the value of your farm• Maintain the success of your operations• Minimize the stress of operating

a business

• Reduce your income taxes• Create a transition plan that works

for you• Preserve your family harmony

We appreciate that not every farm family is the same. That’s why our team of highly accredited advisors works with you – at every stage in life – to ensure the success of your farm and your family from one generation to the next.

HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Insurance products provided through Hollis Insurance Inc. PWM Private Wealth Counsel is a personal trade name of Kevin Hegedus and Kevin Haakensen.

lifeafterharvest.com

SASKATOON, SK JANUARY 22

WARMAN, SK JANUARY 23

PRINCE ALBERT, SK JANUARY 30

HUMBOLDT, SK FEBRUARY 5

MELFORT, SK FEBRUARY 6

All workshops will begin at 7pm. Contact us for details on the venue in your area!

UPCOMING WORKSHOP DATES

306.975.9500Space is Limited - Register Today

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TAx SLIPS FOR 2018 As in previous years, please ensure to watch for your tax slips as they are mailed to you, both from our head office at Industrial Alliance Securities Inc., and from the respective mutual fund companies individually. For the latter, we do not receive copies, so for any duplicates requested, we will need direction from you regarding which companies and which slips you believe you are missing! We will also, once again, be requesting that you sign a release form for any third-party requests for duplicates and information (i.e., from your accountant). In addition, there is a standard 48 hour turnaround on tax slip requests, as we do receive many of these calls during our tax season. This does not mean it will take 48 hours – but that the request will be completed within that timeframe to allow for us to do a thorough check. If you must obtain your slips immediately, please log in to your myPortfolio+ account, where you will be able to print them off at your leisure.

IMPORTANT INFORMATION FROM yOuR ADMINISTRATIvE TEAM

Holley Frost Associate Investment Advisor HollisWealth, a division of Industrial Alliance Securities Inc. Insurance Advisor, Hollis Insurance

Leslie Wong Associate Investment Advisor HollisWealth, a division of Industrial Alliance Securities Inc.Insurance AdvisorHollis Insurance

April Seitz Investment Advisor HollisWealth, a division of Industrial Alliance Securities Inc.

With back-loaded funds, where redemption fees still apply, we are able to redeem 10% per year of your DSC funds and not be charged a redemption fee. As an added service to our clients, what we do is simply flip the free units into the same fund but on a front-end (FE), zero commission basis. By doing this every year, we can minimize the amount of fees in your

Please take the time to read all communications from our office, including emails and letters. It is not always possible to contact everyone quickly when an opportunity presents itself, so we are asking you to assist us in getting timely information to you. If we do not already have your email address, please call in with it to generate further contact options!

TFSA CONTRIbuTIONSIt’s still early in the year, but a friendly reminder that your TFSA room for 2019 has been increased to $6,000, bringing your total lifetime contribution potential to $63,500. For those of you who left us with instructions in 2018 to do your 2019 contributions, they will be done in the month of January 2019. Any income earned inside the TFSA is completely tax-free. If you are unable to make your contribution in any given year, you can make it up in a future year, but you gain the most advantage by making your TFSA contributions as soon as possible, in order to enjoy the tax-free growth of your investment. If you have made withdrawals from your TFSA in 2019, you will need to wait until 2020 to deposit those funds back into your TFSA in order to avoid any penalties for re-depositing the funds too soon. ** Please note: Available room is carried forward should you not contribute the maximum. You should always verify how much you have contributed to your TFSA before making additional contributions. This will avoid penalties from CRA for over contribution. You can do this by logging into your my CRA account online. **

10% DSC TO FE SWITCH REMINDER portfolio in the event of a redemption. This also gives you a lot more flexibility in investment options in your portfolio. There is no cost or tax consequence to doing this. **Please note: The 10% DSC to FE switches will be processed at the beginning of 2019. You will receive confirmation slips on this via mail.

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It is not a secret that the financial industry has seen many changes over the years, primarily focusing on ensuring our clients receive the best care possible, while ensuring that processes and fees are more transparent than ever. We uphold these standards, and do our best to maintain very accurate information about our clients on file so that we can always be in a position to provide the most appropriate advice tailored to your specific needs. In order to do this, we have to collect certain information, and update certain documents

client Meetings with your Advisor throughout the course of the years. In light of this, we ask that when booking an appointment, our valued clients make every effort to attend with all parties involved in investing. This makes it easier on everyone when it comes to collecting information and signing documents, as well as reducing follow up times when items are sent home. It also saves you from having to send back documents, and allows you to ask any questions you may have about them during the meeting.

Organization isn’t about perfection; it’s about efficiency, reducing stress and clutter, saving time and money and improving your overall quality of life”. -

- Christina Scalise

THE IMPORTANCE OF A RISk MANAGEMENT CHECk-uPLife and living benefits insurance, similar to investment programs and wills, require reviewing as your financial and family life progresses. Rate changes and changes to your personal situation are important to make note of, as they indicate that it may be time to review your insurance needs. A “Risk Management Check-up” will ensure that everything is in order and that you and your loved ones are protected. If you aren’t sure if a Risk Management Check-up is needed at this time, have a look at the following checklist. If any of these scenarios apply to you, it may be a good time to set up a time to review your needs with Stewart Gillott, Insurance Advisor, Hollis Insurance.

Since your life and living benefits insurance needs were last reviewed and/or updated, have you:

• Had a child or added a dependant?• Purchased a home or property? • Purchased or sold a business or farm?• Surplus capital that is being eroded by taxation?• Changed your occupation or entered into a new business venture?• Retired or Semi-retired or have plans to do so in the near future?• Had or have an upcoming insurance premium rate change?• Had a change in health that may affect insurance premiums?• Stopped smoking? • Reviewed your beneficiary designations?• Received an inheritance?• Acquired any new insurance outside of our office – group, disability, etc.?As an integral part of the PWM Pillars process, our Risk Management Solutions provide significant benefits to our clients. To learn more or schedule your complimentary review, call Stewart Gillott, Insurance Advisor, Hollis Insurance at 306-975-9500. or visit www.pwmprivatewealth.com.

Take the Time to Talk to Your Older Children About Investing

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MILLENNIALS AND INvESTINGDynamic Funds - Snapshots

Many millennials aren’t investing. Perhaps, you aren’t investing. In fact, 68% of millennials aged 30 say they don’t own any stock or stock mutual funds according to a Bank Rate’s Money Pulse Survey. One of the reasons for the reluctance according to the survey is your wariness to invest. Millennials, they say, came of age during an extremely difficult time to invest because your cohort spans the years 1980 to 2000. That means the oldest of you was just 28 when the financial crisis hit in 2008 which has made many wary to invest in the markets. That’s a shame because investment returns have been generally good over the past several years. Returns that may have come in handy for the years ahead as a number of headwinds may make it tougher for millennials saving for retirement. Tax reform, depopulation and historically low interest rates are some of the obstacles adding urgency to the need to start investing. Here’s how.Start nowThe earlier you start saving, the better the result thanks to the magic of compound growth. Compound growth is a key aspect of investing. With compound growth, you earn interest on the money you save and, on the interest, that money earns. You earn interest on interest. As long as you don’t withdraw any funds, over time, even a small amount can add up to big money. Let’s take a look at three compound growth scenarios:• You put $25 a week ($1,300 a year) into an investment that earns 3% a year for 40 years. At the end of that time, you will have $100,489, thanks to the magic of compounding

• If you invest $50 a week in an investment earning 3% a year for 40 years, you will have $200,977• If you invest $100 a week at 3% a year for 40 years, it will grow to $401,955.This mechanism is flexible and can be approached from the other direction as well. For example: if you started at age 20, how much would you need to save each year to have $1 million at age 60, assuming a 3% return? Answer: $13,000. So, you see, saving – even a modest amount – can result in substantial savings over time.Invest regularlyIt’s important to view investing as a process not a one-time event. By choosing a pre-determined time to invest – weekly, bi-weekly or monthly – you not only take the guesswork out of when to invest but you ‘pay yourself first’ as well. By setting up an automatic investment plan, you also protect yourself against buying too much of any investment when prices are high while ensuring you buy more when prices are low.Invest for the long termTraders trade, investors invest. There’s a big difference between the two. Traders may hold stocks for days, hours or even minutes. That’s not investing. And certainly not for the long term. Saving for retirement is perhaps the most oft cited reason for investing and for most of us that means long term.

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Don’t forget to check out our Money$ense Video Blog and Meshke’s Minute, which can both be found via www.pwmprivatewealth.comAs always, and to stay on top of both these new features as well as the Money Sense Radio Show, be sure to follow us on Facebook, Twitter, and LinkedIn.

OUTSTANDING INTERNET PRESENCETHE B2B BANK AWARD FOR MULTI-SERVICE ADVISOR OF THE YEAR

WINNER

Saskatoon 205-210 Wellman Crescent in Stonebridge. (306) 975-9500 or 1-800-652-7472

Prince Albert 25-11th Street East

Swift Current Unit 14-600 Chaplin Street

Visit our website at: www.pwmprivatewealth.com

This information has been prepared by Kevin Hegedus and Kevin Haakensen who are Portfolio Managers for HollisWealth® and does not necessarily reflect the opinion of HollisWealth. The information contained in this newletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors.

HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

Insurance products provided through Hollis Insurance.

HollisWealth does not provide any income tax preparation services and does not supervise or review any income tax returns.

Be sure to follow us on Facebook & Twitter@prairiewealthwww.facebook.com/pwmprivatewealth/