On Monday, January 10, 2011, Scotia Capital Portfolio Strategist Vincent Delisle gave a special “Squawk Box” presentation of his outlook for 2011.

Attached is a video link that will allow you to view the full presentation.

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Video link of Scotia Capital Strategist Vincent Delisle’s 2011 Outlook presentation

Finally spring is approaching and we can say good riddance to winter garb, all that snow, and dark winter days!! It also means we’re getting closer to the end rather than the beginning of this terrible stock market downturn and economic malaise. It’s a matter of time before markets and the economy recover, and I have no doubt they will – I just don’t know when, nor does anyone.

It has been very difficult for all of us to see the depressed state of our financial assets and real estate holdings. Over the past several months, I’ve had numerous conversations with clients and heard many emotions expressed. Some of these include sadness, cynicism, anger, stress, anxiety, and uncertainty. It’s been difficult for me too to have these conversations. As you know, my investment approach is balanced, diversified, and conservative. To see quality investments drop the way they have has been disheartening. I’m sorry we’ve all had to experience this situation. However, markets will always go up and down and there are some lessons to take away from this current bout of market volatility:

* Have a Financial Plan that includes both short-term and long-term financial goals and stick to it. Just because market conditions change doesn’t mean that one’s long-term strategy needs to change.
* Consider what would happen if tomorrow you couldn’t work, walk, or speak or a loved one became seriously ill. Plan ahead and develop a “comprehensive” Financial Plan.
* For short-term goals (e.g., withdrawing income from a Registered account or for an upcoming purchase), protect yourself from market downturns by holding guaranteed assets (e.g., GIC, Money market) that have a maturity date that matches the date the cash is needed.
* Have emergency savings equivalent to at least three months’ gross income, more if you have job insecurity or uncertainty.
* Long-term investors need to learn to take advantage of inevitable market downturns by overcoming their fear and investing more money or arranging a regular monthly contribution to take advantage of dips. Learn to view these downturns as opportunities to buy assets “on sale”.
* The key to wealth accumulation: spend less than you earn and control debt, not just today but everyday.

Finally, all too often volatile capital markets cause us to forget about ourselves. The stress and uncertainty of the markets can take their toll on us. I encourage you to take time to maintain your personal health and well-being.

Vincent Delisle, CFA, Portfolio Strategist, Scotia Capital

Robert Follis Director – Corporate Bond Research – Scotia Capital

Robert Follis Director – Corporate Bond Research – Scotia Capital

Robert Follis Director – Corporate Bond Research – Scotia Capital

Jittery markets can upset even the most confident investors. This year’s extreme volatility has been a case in point. We know that a long-term, focused strategy is the best protection against a difficult market cycle. The chart below produced by Russell Investments illustrates the importance of maintaining a long-term perspective during this time of market volatility.

Dating back to 1924, the graph shows that positive “bull” market returns outnumber the negative “bear” markets we’ve experienced and, you can see that history shows “bear markets” are generally of shorter duration. We’re currently experiencing a bear market and while we don’t know how long it will last, I can say with confidence that it will be followed by an up-market that will be stronger and will likely last longer!

From BenStein.com
Now for a few words about the economy.

Despite what anyone says, no one knows if we are in a recession. It takes six months of declining economic activity for the economy to be declared officially in a recession and so far there has been at most one month of decline. We won’t know for sure until June of this year and a lot can happen between now and June.

Still, we are obviously facing a slowdown in many parts of the economy. If we are going into a recession, here are a few thoughts that might cheer you up and guide you.

First, recessions in the postwar world tend to not be that deep. They last on average about ten months. Unemployment rises by about two percentage points. The stock market usually–not always–recovers well within a year. No recession has lasted more than 15 months in the postwar era. More than 90 per cent of willing workers will be employed even at the worst periods. People will still need cars, trucks, life insurance, shirts, socks, and colonoscopies. In certain areas, money will still be being made.

That said, you do not want to be caught off guard and off balance.

Keep a good solid chunk of liquidity, also known as cash or very liquid assets. You do not want to have to sell your home into a declining market to get cash in a pressure squeeze. Be the first to work and the last to leave. If there are to be layoffs at your place of business, make sure the boss knows you are the last one to be laid off. Be the most eager, most enthusiastic member of the team, and you maximize your chances of staying on the team.

If you can, defer major purchases that would have a seriously adverse effect on your liquidity.

If you can, and if you have the cash, buy broad indexes of stocks. The time to buy them is when everyone else is fearful and terrified, as they are now.

Most of all, know that the hard times will not last. The government has major weapons to use to fight recessions. True, they are a bit slow off the mark this time, but eventually these weapons will take effect. It looks extremely dismal in a serious recession, but they always end. It will get better, I promise, even if takes a while.