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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
Nov. 30 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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13,470
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-7.9 %
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7.4 %
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S&P 500
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2,080
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1.0 %
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11.4 %
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Euro Stoxx 50
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3,506
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11.4 %
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1.2 %
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MCSI emerging markets
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814
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-14.8 %
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-4.6 %
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Oil ($US/Barrel)
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$ 41.65
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-29.9 %
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-41.6 %
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Gold ($US/oz)
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$ 1,065
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-10.3 %
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-1.9 %
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$CAD / $USD
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$ 0.74
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-13.1 %
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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
2016: The year of stable growth for equities
In a year in which interest rates in the U.S. are expected to rise and the global economy will continue to struggle, stable growth will be one of the main themes for equity investors in 2016, say analysts. The instability helped repair some worrying imbalances created in the market. The third quarter correction helped smooth out valuations and deflated China's stock market bubble, returning prices to a more reasonable level. S&P 500 currently trades at a level of 16.2 times forward earnings, just slightly below the 16.3 it traded at the end of 2014
Of course, there are factors in the coming months that could complicate even a stable growth play. The U.S. Federal Reserve is widely expected to raise its benchmark interest rate at its policy meeting next month, with any further rate rises next year holding the potential to add volatility to the market.
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Tax & Estate Planning Strategies
The real winners of the new liberal tax policies
When Canadians woke up to a new Liberal majority government earlier this week, they knew their family finances were about to get a shake-up.
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In the news
Is the economy ready for a rate hiking cycle?
They say history repeats itself. But when it when it comes to the first interest rate hike since 2006, perhaps it doesn't. With the next Federal Open Market Committee meeting on Dec. 16 and the Federal Reserve's recent minutes showing a hike in December is more likely than ever, Erik Weisman, chief economist at MFS Investment Management, examined whether today's economy is ready for a rate hiking cycle.
It's a really interesting time for the Fed to be raising rates. Today, GDP growth stands at 2.9%, whereas the last several times the Fed raised rates, GDP was around 5% to 7%. At its lowest, the GDP grew 5% year over year the quarter before the first Fed hike in February 1994. And at its highest, 7.6% year over year in March 1988.
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Time to take profits on U.S. dollar positions
Investors shouldn't wait until the U.S. Federal Reserve's next meeting to take a profit on their U.S. dollar positions. It has become rather obvious that the U.S. central bank will hike interest rates on December 16 and accompany it with dovish language that points to looser monetary policy going forward.
So if you are long dollars right now, the FOMC has no incentive to please. In fact, if the dovish hike could weaken the U.S. dollar, there would be few on the Fed who would object. Investors will not want to be long the dollar going into a dovish Fed lift-off. That will leave them vulnerable to one-way trading in an illiquid market, since there will be many taking profits and few that want to establish new positions or extend old ones.
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Is this oil downturn a repeat of the 1985 crash?
There's been talk of the current oil rout being a repeat of the price crash that began in 1985 and lasted about a decade, but a report released Thursday suggests there's reason to hope the doldrums won't last as long this time around. This is not the worst price crash. It is not the deepest, nor the fastest nor yet the worst.
According to the study, today's price collapse and the one from 30 years ago have one major thing in common: they were mostly driven by oversupply in the market rather than weak demand. But a big difference between the two crashes is that there was a lot more spare production capacity globally in the 1980s than there is today, meaning balance may be restored more quickly this time.
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Eddy Farina, Fin. Pl., CIM
®
Senior Vice President, Investment Advisor 514.981.5727
" I have not failed. I've just found 10,000 ways that won't work "
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