Performance figures for each account are calculated using time weighted rate of returns on a daily basis. The Composite returns are calculated based on the asset-weighted monthly composite constituents based on beginning of month asset mix and include the reinvestment of all earnings as of the payment date. Composite returns are as follows:

Return to the New Normal, Part 1: Tempest in a Trumpet

By John Nicola, Chairman and CEO 

“In God we trust, all others bring data.”

W Edwards Deming


“It is a capital mistake to theorize before one has data.”

Sherlock Holmes

It was less than a month ago, on March 24th President Trump exhorted anyone who would listen that the U.S. would be able to go back to work by Easter and then tweeted in caps:

Trump has rarely allowed facts get in the way of a good narrative. But in this case, leaders in politics, business, education, and the arts all ask a version of the question his tweet implies; how and when can we return to work, school or life as it was?

As I was thinking of how to answer this question, I realized the question itself likely cannot be answered, yet.  And when we begin to examine the situation, it’s fascinating to consider how changes to society will in turn impact financial planning and investment strategy.

To that end, my thoughts on this idea of returning to “normal” will split into two parts.  In this first part, I want to focus on what changes we are seeing in society and, specifically, the business landscape; then, in part two, we will delve into the impact on personal planning and investment portfolios.

In terms of where we are now, from everything I read, several observations and questions come to mind.

Firstly, we do not have the data we need to answer even the most basic questions, such as how many people are currently infected? Without that how can we know the mortality rate? A recent article written by Andrew Bogan for The Wall Street Journal suggests that a study done by Stanford in Santa Clara county (where he lives) indicates the actual infection rate is between 50-85 times that reported rate. If that is correct, the mortality rate there would be between 0.1% and 0.2% as opposed to 3-4%. Other studies in Italy, Denmark, Germany, and New York would appear to support this information. Of course, we are long way from having the level of testing to properly answer even this most basic of question: how many people are or have been infected with COVID-19?

A Hypothetical Exercise:

Imagine our government said that as of tomorrow you could go back to a fully booked restaurant, see a movie in a theatre, go to a hockey game, or fly on a plane with few empty seats – what would you choose to do?

Just because the government allows for businesses to reopen does not mean that people will return as customers unless they know they are safe. Does that mean we need a vaccine for COVID-19 before we can return to “normal”? There have been a number of articles written recently stating even though some shops and auto dealers have now reopened in China it has yet to translate into consumer spending at anything close to former levels.

Now imagine the question above was asked, but this time the following was also true:

  • By far, the majority of all residents had been tested for COVID and in most cases had developed antibodies
  • Health experts determine that the mortality rate is not 3-4%, but closer to 0.2%, and 75% of all deaths occurred in those over 70 years old.
  • Effective anti-viral treatments are readily available and a number of vaccine trials look promising

Our position very much depends on what we know. Which brings us back to data and information. Ignorance breeds fear.

There is a massive search going on to create a vaccine for COVID-19. According to Economist magazine there are 86 candidate vaccines being tested.  In fact, our very own Ethan Asthaneh, an advisor and one of the hosts of our Wealth Exchange podcast, interviewed two virologists currently as part of the race to find a vaccine.  However, history suggests that there is often a very long time between discovery of a virus and a working vaccine. Consider the chart below with data from the World Health Organization and Centers for Disease Control and Prevention in the U.S.

Getting effective vaccines for some viruses can be measured in decades not months.

At first this would be seen as more than a little depressing unless we realize that, notwithstanding a number of viruses with no vaccines, we have been able to function as a society and economy. Each virus is, of course, different, with varying rates of infectiousness and mortality rate. However, we are used to adapting without cures.

Will we need to develop an effective vaccine for COVID-19 before we reengage with work, family, and leisure as we did before? If the answer is ‘yes’ then a return to normal would need to be measured in years and not months.

Is return to normal even a desirable result?

If one can save the time and expense of commuting by working remotely (even if only part of the time), is that a more preferable model?

The American Psychological Association’s magazine published an article about the significant benefits of remote work several months prior to COVID-19. Remote work is not suitable for all businesses or all workers, but what difference might it make to traffic, pollution, stress levels, and productivity if 20% of work could be done at distance?

More than a few of our clients have told us they prefer being able to have at least some of their meetings with us online and virtual. Scheduling can be easier for them and dress codes more relaxed.

In Reality…

Recently, a company called Bond Capital surveyed their business owner clients with the following questions and received the responses below.

We (Bond Capital) conducted an informal survey of some companies…we asked questions about the new remote work environment:

  • At a high level, do you think your business is running more efficiently? Are your teams and individuals more productive?
  • Are there business units/teams that are more efficient and happier? Are there business units / teams that are less efficient and sadder?
  • What services are you using more – video conferencing/ messengers / other? What are the upside surprises of remote work?
  • How are you maintaining your company culture through remote work? What are the downside surprises/challenges of remote work?
  • Assuming your business fundamentals are running as previously planned in 3-6 months, how might you change the way your business is run given what you are learning from remote working?

Here’s what we (Bond Capital) have learned from the first 1½ months of remote work:

  • It’s still early – the novelty may wear off and things may begin to break, but, so far so good.
  • At the margin, productivity is the same or higher.
  • Video calls, when not overused, are efficient / productive and they tend to start / end on time (or early).
  • Messenger and& video-based information sharing/editing is very effective.
  • People outside of headquarters feel more included.
  • It’s easier to bring outsiders in for quick video discussions.
  • Time flexibility / commute time elimination / family meal sharing are big wins for workers.
  • Pre-existing management bottlenecks – around individual performance or organizational design – are only amplified in a distributed environment.
  • Biggest productivity and balance challenges come from parents with pre- or school-aged children that had other support systems during the working day prior to the implementation of work-from-home mandates. In addition, there’s work to be done in understanding potential psychological and physical stress and other challenges related to remote work, especially in the current ‘shelter-in-place’ environment.
  • Companies that focus on effective written communication and documentation (dubbed the ‘Amazon way’) where plans are shared in written form for editing – either synchronous/asynchronous – have had an easier time shifting to distributed work. Many observe this form of communication can lead to more insightful input and decision making.
  • ‘Creating the office’ online can be successful – including regularly scheduled meetings plus active social experiences like work-related classes and training plus outlets like live-streamed workouts.

Top-of-mind issues with large-scale remote work include questions of how to:So, the conclusion they drew from the survey was that while most companies already had teams working remotely, most believe that after the experience of forced remote work, they will shift to more distributed work.

  • Ensure creativity is captured and productivity is maintained
  • Determine which teams are optimized by working together in-person all the time/some of the time/rarely
  • Maintain engagement and culture(s), recruit/train/develop/retain people, and manage human resources
  • Manage technology/security with rising numbers of remote workers
  • Think about recruiting if physical proximity to headquarters/office is less relevant
  • Organize/utilize office space(s)
  • Evolve business travel and entertainment


Into the Future

In essence, remote work and video meetings are going to be part of many companies’ business models going forward. It may be early, but we can speculate about who the winners and losers might be if this becomes a significant part of our economy.

By itself, remote work is not likely to be a panacea for everything that ails us, but it could have a material impact on a number of markets and may end up being a major catalyst in the challenges we face with climate change.

And as we consider where else these benefits and pain points will affect us, we should address these questions:

  • How does this impact my own financial and estate planning?
  • Do I need to change the focus of my asset allocation model?
  • What does this imply for the future of equities, real estate, and interest rates?
  • Do I need a SWOT analysis on my investment portfolio (strengths, weaknesses, opportunities, and threats)?

In part two of this newsletter we will look at these questions in detail.

Adaptability and the Way Forward

Every crisis tends to create a combination of fear and pain to begin with. Over time some people and organizations begin to adapt to a new reality that the crisis has caused. Our model for work and leisure change. Some aspects of our lives will reduce permanently, and some may disappear entirely, but new ways of experiencing work, family, friends, travel, sports etc. will also evolve.

Those who envision and accept those changes, as Darwin wrote almost 200 years ago, will come out on top.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change, that lives within the means available and works co-operatively against common threats.”

– Charles Darwin


This newsletter started with an observation that we are facing an extraordinary crisis and we have insufficient data to evaluate properly its’ long-term impacts on our lives.

As we move forward together as a society into whatever “normal” becomes, we will continue to better understand the threat we face, and, undoubtedly, the more accurate information we have, the better our decisions and outcomes will be.


This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required provincial securities’ commissions.