GFM Network News


Value versus growth company valuations

Being viewed as a growth versus a value stock is one reason why stock prices can be significantly more volatile than underlying earnings or cash flow

Companies are broadly divided into two categories: value stocks and growth stocks. Value stocks generally pay higher dividends, have slower growth rates and sell for lower valuations based on traditional metrics like earnings yield (the inverse of the more popular but less easily understood price/earnings ratio), cash flow yield and price-to-book ratios. Growth stocks exhibit […] Read more

The normally volatile markets have been unusually erratic these past two years,

Titanium-strength portfolio lives up to its name

Record-setting market turbulence tests portfolio’s mettle

As I write, it is almost the second anniversary of the titanium-strength portfolio. I am updating as of May 4, 2020, due to publication timelines. With the topsy-turvy nature of markets lately, the details may have changed by publication date, but the key message will remain the same. The normally volatile markets have been unusually […] Read more


Money held in mutual funds dwarfs the rapidly growing exchange-traded funds industry.

Utilizing exchange-traded funds in an investment portfolio

Buy broad indexes and hold for long periods of time

Exchange-traded funds (ETFs) came into existence in the 1990s in response to the high fees of the mutual fund industry. They provide broad diversification and are traded like stocks. The original premise of ETFs is because the vast majority of mutual fund managers fail to outperform the market, it’s best to simply invest in the […] Read more

Managing ourselves in times of crisis

The reality is that we are in uncharted waters

Since my last article was written, the economic situation has deteriorated significantly. Our stock markets have been in freefall with the U.S. market recording its fastest ever 30 per cent decline. I use U.S. market history rather than Canadian because the data is readily available and the United States is the largest, most diversified market […] Read more


Bears, bulls, corrections, pull-backs

Economic downturns can have benefits too

We all love a good bull market, but are uptrending markets always the best for long-term investors? We spend from ages 20 to 60 or even 70 accumulating assets, and only the last 10-30 years cashing them in to live on. Why would we worry about a correction or bear market, unless we are at […] Read more

Precious metals play a role as they generally move in opposite direction to the stock market.

The place for precious metals in a portfolio

Even though it’s the worst-performing asset class, gold has a purpose

Over a 210-year period, the after-inflation value of a U.S. dollar was a nickel. A dollar invested in gold became $4.52, in T-bills $281, in bonds $1,778 and in stocks $704,000, making stocks the runaway leader. (Jeremy Siegel: Stocks for the Long Run) Despite this long-term track record, gold has a place in our portfolios […] Read more


Commodity booms and busts: Part 2

Rinse and repeat: commodity stock prices follow an ever-repeating cycle

Where are we in the current economic cycle? Canada experienced a minor commodity-driven recession in 2015. It was a major recession in oil-producing regions but unfelt in other parts of the country. The United States has not experienced negative growth since 2009. My focus with this article is the United States because well, it’s the […] Read more

Commodity booms and busts: Part 1

Commodity price highs and lows are tightly tied to the economic cycle

The U.S. stock market had one of its worst decades on record from 2000 to 2009, even worse than from 1930 to 1939, averaging just 1.2 per cent returns annually. Commodities, on the other hand, had a fantastic decade. U.S. stock markets had a great decade from 2010 to 2019, averaging 14.2 per cent annual […] Read more


Year and decade financial review: Part 3

The best market predictions are based on probabilities calculated from past performance

The last two columns reviewed Canadian and U.S. decade-long economic and investment performance. Successful investing takes a long-term approach; understanding the underlying reasons for the macro picture is important. Let’s look more short-term. What happened last year, how did our portfolios perform, and what is likely to happen in 2020? I concluded my 2018-19 New […] Read more

Year and decade financial review: Part 2

Can Canada rise from the ashes and generate profitable returns on our investments?

My last column painted a picture of the dire state of the Canadian business and investment climate. Layering in consumer data makes the picture look downright depressing. Canadian consumers are more indebted than ever. Household debt is the highest amongst the G7, about 175 per cent of disposable income. The U.S. has gone in an […] Read more