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
Bears, bulls, corrections, pull-backs
Economic downturns can have benefits too
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
Year and decade financial review: Part 1
Canada started the last decade strong, but wound up weaker than the U.S. Why?
2010 was a good year, but from all the gnashing of teeth, it didn’t seem that way. The world had narrowly escaped another Great Depression, only experiencing the Great Recession. The financial crisis emanated from a U.S. housing crash, quickly spreading to Europe and around the world. Canada stood strong, and by comparison, the 2008 […] Read more
The sky is not falling, Part 3
The best investment opportunities occur when negativity rules
World total energy consumption has been steadily rising, increasing 3.5 times in the last half-century. This is driven by the more than doubling of population, increasing economic growth and prosperity. Energy consumption temporarily declined twice in the last half century — during the 1980-82 recession and the 2007-09 Great Recession. Energy consumption and economic growth […] Read more
The Sky is not falling, Part 2
Free markets are best equipped to find solutions to global problems
Developed economies operate under a democratic, capitalist, free-market system. Developing countries often have socialist, autocratic, controlled-market systems — although many are becoming freer. It seems obvious to me which system is superior, yet the continuing tug on free-market economies is towards socialism, because “profit” is considered a dirty word implying that one party took advantage […] Read more
Investing for a positive, progressing world
Herman VanGenderen wants to assure you that the sky is not falling
Chicken Little is a famous storybook character. He (or she) had an acorn drop on his head and concluded the sky was falling. As he rushed to tell the king, he ran through the countryside yelling “the sky is falling. The sky is falling.” Along the way he collected other like-minded fowl, all yelling, “The […] Read more
Cyber-Savvy Farmer
