The publication date of this article is election day in the United States. By the time you read this we may know the outcome of another bizarre election. Much will be written about how the outcome will impact our investments, yet in reality it will have surprisingly little impact, and not in any predictable way. […] Read more
The Presidential Cycle and other regularly promoted phenomena
Can they help time your investments?
Growth stocks have outperformed value by a wide margin … but will it last?
Slow and steady wins the race
Market action this year has confounded and perplexed. Meaning, it has been pretty much business as usual, although with more exaggerated swings. The action should demonstrate more than ever that short-term market gyrations are completely unpredictable. Anyone who in late March publicly said the market would hit new records by summertime would have been promptly […] Read more
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
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
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
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
Cyber-Savvy Farmer
