Market Insight

Financial Gravity

Richard Thaler won the latest Nobel prize in economics for his work that is focused on behavioral economics. Years ago in 1985 he also co-penned a white paper posing the question ‘Does the Stock Market Overreact?’ and found that the market does overreact to unexpected news. Well in this Market Ethos we looked at how share prices perform following either a big unexpected short term decline or a big unexpected short term gain.
We found that after big declines, performance tends to be strong as there is a partial rebound. Following big gains, short term performance tends to be muted and below average. We included in the report investment implications as well.

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Market Insight

Core Income Refresh – Part 4 – Consumer Sectors and Health Care

This is the fourth and final edition of the Core Income Refresh series. This week, we shift our focus to the Consumer Staples, Discretionary and Health Care sectors. The headlines have not been favourable in regards to the group. Big-box retail is feeling the Amazon effect, mall traffic is declining, consumer stocks are dealing with rising minimum wages and Health Care is hurting due to political bureaucracy south of the border, where the government is trying to overhaul the entire system. Despite this, returns for these sectors have been quite robust year-to-date.

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Market Insight

Core Income Refresh – Part 3 – Industrials & Technology

A number of times during the year we break from our traditional approach of portfolio management and conduct what we call a “refresh”. Each member of the analytical team conducts independent research into sector weights and positions, as if we had just taken over a new fund or were starting from scratch. The desire is to combat Anchoring or Regret Aversion behavioral biases. To ensure we are positioned as we should be.

In this report, part 3 of 4, we have provided an abbreviated summary of the Industrial and Technology sectors.

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Market Insight

Core Income Refresh – Part 2 Commodities

A number of times during the year we break from our traditional approach of portfolio management and conduct what we call a “refresh”. Each member of the analytical team conducts independent research into sector weights and positions, as if we had just taken over a new fund or were starting from scratch. The desire is to combat Anchoring or Regret Aversion behavioral biases. To ensure we are positioned as we should be.
In this report, part 2 of 4, we have provided an abbreviated summary of the Commodity sectors.

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Market Insight

Core Income Refresh – Part 1 Rate Sensitives

A number of times during the year we break from our traditional approach of portfolio management and conduct what we call a “refresh”. Each member of the analytical team conducts independent research into sector weights and positions, as if we had just taken over a new fund or were starting from scratch. The desire is to combat Anchoring or Regret Aversion behavioral biases. To ensure we are positioned as we should be.
In this report, part 1 of 3, we have provided an abbreviated summary of the Interest Rate Sensitive sectors.

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Market Insight

Fundamentals – The good & the bad

Earnings and sales growth were impressive this past earnings season, likely helping the market navigate some of the geopolitical bumps of late. In this edition we slice up valuations from a few perspective that clearly indicates the U.S. equity market is rich. In some ways as rich as the during the tech bubble of the late 1990s. Valuations provide one more reason to look to overseas developed markets to diversify.

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Market Insight

Market Clock – How to Use It

This week we have updated our Market Clock asset allocation framework, which still favors a continuation of the current bull cycle. 21 of our 30 indicators are bullish, which is a healthy amount. Also included is how we use the Market Cycle framework, namely for tilting our asset allocations and helping guide when it’s a good time to deploy cash. Good managers, asset allocation, fees are all important inputs into long term performance…..so is when you buy.

 

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