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Welcome,
We are very pleased to send you our monthly financial newsletter to keep you abreast of financial markets and world economy. We hope that you will enjoy reading these articles. As always, we welcome your comments and questions.
Sincerely,
Team Beauregard Farina Tourangeau
1250 boul. René-Lévesque West
Suite 1500
Montréal, QC
H3B 4W8
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Market Returns
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Value as of
Aug 31 2015*
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2015
Year to date
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2014
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S&P / TSX
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13,859
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-5.3 %
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7.4 %
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S&P 500
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1,972
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-4.2 %
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11.4 %
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Euro Stoxx 50
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3,270
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3.9 %
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1.2 %
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MCSI emerging markets
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819
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-14.4 %
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-4.6 %
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Oil ($US/Barrel)
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$ 49.20
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-15.4 %
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-41.6 %
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Gold ($US/oz)
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$ 1,133
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-4.6 %
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-1.9 %
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$CAD / $USD
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$ 0.75
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-12.3 %
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-8.5 %
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Source : Bloomberg, Richardson GMP Limited
*Values are in local currency
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Investment Strategies
Timing volatility does not work
During market volatility, we should stay invested. That's because time in the market always trumps timing the market. Volatility should always be expected in the markets. Regardless, high-quality companies will continue to grow and create value for shareholders over time. Volatility just creates opportunities for long-term, patient investors. If you look at the TSX over the last five years, the annualized price return has been about 4%. But if you miss the 10 best trading days, you almost entirely wiped out all those gains.
This week's events is a market pause that has helped temper rich valuations and allowed the 'E' in PE ratios to catch up to the fundamentals, which are characterized as decent, not great.
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Tax & Estate Planning Strategies
Update on the new rules for testamentary trust
Although upcoming changes to the tax treatment of testamentary trusts will eliminate certain tax-planning opportunities associated with these types of trusts, experts say they still represent valuable tools for many clients.
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In the news
When does a market turns from Bull to Bear
The stock market's sharp downturn in recent weeks has pulled the three major stocks indexes into what's known as a correction. But when does a market correction effectively end a bull market and usher in a full-blown bear market? A correction is a Wall Street term for when an index like the Standard & Poor's 500 index, the Dow Jones industrial average, or even an individual stock, falls 10% or more from a recent high. A bear market occurs when the index or stock falls 20% or more from the peak.
There have been 19 corrections on the S&P 500 since 1945, not including the current one, and 12 bear markets, according to S&P Dow Jones Indices. That works out to corrections becoming bear markets a little less than 40% of the time.
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China confusing currency devaluation
The Chinese government announced it would no longer decide the exchange rate of the yuan. Instead it would set the rate, known as the central parity rate taking into account the closing rate of the yuan the previous day, supply and demand conditions in the foreign exchange market and the exchange rate movement of major currencies.
The new policy is more flexible and more market based. The devaluation could help boost Chinese exports, which would strengthen a weakening Chinese economy, and help China get IMF approval to include the yuan in its basket of major international reserve currencies.
Read more
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What to expect from the Fed on rates
This month's Federal Reserve policy meeting could signal the end of an era. Policymakers may decide to raise interest rates for the first time since the Great Recession, marking the end of an era of ultra-low rates that has defined financial markets for almost seven years.
Although signs of slowing global economic growth have decreased the likelihood of a September rate increase, many economists still expect policymakers to take action at least once this year as the labour market improves. The Fed has kept its benchmark rate at close to zero since late 2008 to help revive the economy.
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Eddy Farina, Fin. Pl., CIM
®
Senior Vice President, Investment Advisor 514.981.5727
" If you only have a hammer,
you tend to see every problem as a nail "
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