Portfolio management tips for troubled times
October is a typically volatile month for markets, and this year has been no exception. The main North American stock indexes were down for the month across the board. So were crude oil and gold. We heard media talking heads bringing out all the old saws about how markets “hate uncertainty,” or “it’s the U.S. election,” or “it’s Covid-19.” And while it’s true some or all of these things may have contributed to stock market volatility, no single item could be said to predominate. And then on the first trading day of November, a strange thing happened. READ MORE
Vulnerable in the season of volatility
The fall season of volatility is here again. This year, however, stock markets may be susceptible to even more gyrations than usual, given the vagaries of the Covid-19 pandemic and its effect on economic growth, the U.S. presidential election cycle, and the massive injections of monetary and fiscal stimulus to help keep economies afloat. Most recently, we saw stock markets sell off on Oct. 2 on the news that U.S. President Donald Trump had tested positive for Covid-19 and had been admitted to hospital for treatment. But any sustained correlation between market activity and the political cycle is tenuous at best, and is typically very short-lived. So it proved to be, as markets rebounded sharply on the following Monday.
Review your portfolio before jumping in
The Dow Jones Industrial Average is reaching all-time record highs. So is the S&P 500 Composite Index – amidst a pandemic and a recession, no less. And smaller investors are jumping on the bandwagon. Should you join the fun?
Rebalancing for recovery
The March market meltdown, bond market gyrations, repricing of assets, and the flight to safety over the past couple of months has thrown many portfolios into disarray, particularly those of the do-it-yourself variety. The turmoil is likely to be reflected in increased values for fixed-income and cash holdings in your portfolio. Likewise, your equity values will have declined significantly.
Why the urgent need for “safety” can lead investors astray
These days, we’re reading a lot about the “flight to safety” in markets and investments. It’s understandable, of course, as the COVID-19 virus pandemic spreads fear and panic through global financial markets as a nasty side effect. But is that flight to safety the right thing to do right now?
Stock market rout not the time for wholesale portfolio changes
The rapid spread of the Covid-19 virus (also known as the coronavirus), has hit global markets hard over the past few weeks as investors worry about the impact of the spreading contagion on global trade and corporate earnings. Stock market indexes have plunged well into correction territory (down more than 10% from recent highs), crude oil has dropped to levels last seen in 2017, global growth appears to be slowing, and with a possible recession looming, central banks are cutting interest rate cuts.
The use and abuse of mortgages in retirement
Are retirees playing with fire? They could be if they decide to use money borrowed through a mortgage to supplement their other sources of retirement income. The most common ways those at or close to retirement do this is to hold a mortgage through their Locked-in Retirement Account (LIRA) or to borrow money against their home through a so-called “reverse mortgage.” But retirees should think long and hard before entering into either of these arrangements. READ MORE
Resist the urge to “do something”
Unless you’ve been away on vacation in a secluded place, you’ll know that stock markets sank alarmingly earlier this month as the U.S. Treasury bond yield curve “inverted” – that is, the yield on short-term bonds climbed above the yield on long-term bonds, albeit only very briefly. Fearing that an inverted yield curve signals a recession (as it often has historically), traders went into full-on panic mode, dumping stocks and moving to “safe haven” investments, like gold and, yes, bonds. The big North American stock market indices consequently lost ground, some sinking by triple-digit amounts in a span of two days. So is it really time to panic, sell all your stocks, and hunker down with your piles of cash? READ MORE
Stock markets are setting records daily. Ignore it!
“The market will fluctuate.” That old bit of market wisdom is ascribed to Gilded Age financier J.P. Morgan, and is as true today as it was a hundred years ago. The primal emotions of fear and greed are ultimately at the bottom of all market movement, and they take turns confounding market watchers, analysts, and investors. Trouble is, no one ever knows when there will be a market top (or bottom). READ MORE
Professionals bring unique skills to the table
It seems like there are “financial advisors” around every corner. Trouble is, they all seem to offer different services and have different qualifications. And they all charge different fees. Do you really need a lawyer or an accountant to set up a portfolio? How do you know you’re getting the best bang for your buck? Here’s a guide to the various professionals who might offer financial advice, and how they can work for you. READ MORE