Tag Archives: volatility

What does the Trump Victory mean for the Markets?

Posted By Financial Independence Hub | November 10, 2016

USA presidential election donald trump, vector illustration, Editorial use only — President Elect Donald Trump

By Craig Fehr, CFA, Edward Jones

Special to the Financial Independence Hub

Global stocks initially reacted negatively on Wednesday in response to Donald Trump’s U.S. presidential election victory, reflecting the fact that the outcome differed from the consensus expectation, as well as the greater degree of policy uncertainty associated with Trump.

The result does come with unknowns, but remember, the market is rarely free of political uncertainties. The broader path for investment conditions will, in our view, be driven by fundamental trends that are still reasonably favourable and unlikely to change abruptly based simply on the election. So while the markets are reacting immediately and in volatile fashion, it’s important to consider the longer-term outlook when it comes to your investments.

Initial volatility doesn’t tell whole story

7 ways to cushion volatility in second half

Posted By Financial Independence Hub | July 6, 2016

By Adrian Mastracci, KCM Wealth

Special to the Financial Independence Hub

“Behold the turtle. He makes progress only when he sticks his neck out.” — James Bryant Conant, (1893 – 1978), American chemist.

Investors are on edge about the prognosis for the second half of 2016. Plenty of disarray, uncertainty and chaos is gripping stock and bond markets.

Companies will soon be reporting second-quarter earnings and future prospects. Revenue growth is the biggest challenge for companies in this environment.

The remaining central banks tools are losing effectiveness. Best to assume the second half 2016 is not a cakewalk, so be well prepared.

Some currencies have developed their own wall of worries. A sense of unease prevails as bond yields get even slimmer.

Investors may also be sticking their necks out like the turtle. Some of the risks present opportunities for the strong willed.

Consider these three pointers Continue Reading…

How Far is the Stock Market Likely to Fall?

Posted By Financial Independence Hub | April 7, 2016

By Robert S. Cable, The Cable Group

Special to the Financial Independence Hub

For the vast majority of people, investing will, at times, become emotional. We may hope for the market to pull back into what is referred to as a “healthy correction” but when this ultimately happens it never feels healthy.

When we see our portfolios drop in value and the press trot out stories comparing today to the market tops of 2000 or 2007 or even the 1987 crash, we begin to think in terms of worst-case scenarios or even worse than worst case.

We’re conditioned to think in terms of extremes. We’re either at a market top and about to crash or less often, because fear is a stronger emotion than greed, near a market bottom and the market is about to soar. These extremes do occur and they’re always possible but the reality is that it’s unlikely we’re at one today because these extremes are indeed rare. There’s simply a lot more back-and-forth movement to the markets than the average investor recognizes.

It’s inevitable that we’re going to see the market fall 10% in the not too distant future. This happens more often than you likely think it does. Does this mean it’s the start of another 50% market crash? Maybe, but not likely.

Let history be our guide

Weekly Wrap: MoneySense’s 2016 ETF All-Stars; BMO and Horizons ETF Outlooks for 2016

Posted By Jonathan Chevreau | January 30, 2016

Lots of ETF developments to report as we close out January. The February/March 2016 issue of MoneySense magazine includes the latest edition of a feature I spearheaded called the ETF All-Stars.

The focus is on low-cost broadly diversified “plain-vanilla” ETFs but we also included several “Satellite” picks, some of them low-volatility products covering Canada, the US, EAFE and Emerging Markets.

Our six panelists strive not to change the “All-star” lineup too often, since the idea is to minimize turnover and taxes, while having low-cost portfolios that can be bought and held over the proverbial long run. Even so, each year there there are inevitably a few substitutions and replacements and this time around we modestly expanded the number of “All-Stars.”

BMO’s ETF Outlook 2016

Meanwhile on Friday, BMO Global Asset Management released its ETF Outlook 2016. It noted the ETF industry had another record-breaking year in 2015: globally it grew to more than US$2.9 trillion as of December 2015, with a record US$372 billion in new assets the last year.

The Canadian ETF industry also had an historic year, with a record $C16.3 billion in inflows, and assets hitting just under $C90 billion, which is twice as much as five years ago.

Market volatility and ETFs

The report reprises the market volatility of 2015, notable the China-centric selloff of August 24, the surprise non-hike of interest rates by the Fed on Sept. 16th, and its finally raising them by 25 basis points on December 16. And of course there was the continued slide in the price of oil, which hurts resource-based economies like Canada.

Record cash levels in bear market suggests buying opportunity for stocks?

Posted By Jonathan Chevreau | January 26, 2016

Stock market trend business concept and financial prediction uncertainty symbol as a heard of bulls and bears running towards each other to set the direction of an economic forecast. — Is Cash your no-man’s land between battle of the bulls and bears? Try not to get trampled!

Here’s my latest Financial Post blog, which looks at the record amounts of cash scared Canadian investors are sitting on during this bear market. For full blog, click on the coloured headline here: When Volatility Scares You, is it Time for Investors to Buy or Sell?

The blog accompanies Garry Marr’s piece on the CIBC World Markets report released Tuesday: Ocean of Fear: Canadian investors sitting on record cash pile risk billion in lost returns.

Since markets got off to their worst January in decades, per force the Hub has been running several blogs on the topic of volatility. See also from the past week:

Hedging in the Retirement Risk Zone (which is mentioned in today’s FP blog).

Volatile, Unpredictable and entirely normal.

Behavioural Finance: Coping with Losses.