Sign up here to receive the Market Ethos by email.
Keeping with tradition, this is the last Ethos of the year and we are running down the most popular editions based on clicks/eyeballs. We would like to thank you, our readers for your continued attention and will continue our endeavours to provide context and insight for the ever-changing markets.
Looking for yield in all the right places
February 26, 2024
There have been some really big moves in cash over the past few years as yields moved higher. In this Ethos with all three yielding about the same, we discussed the pros/cons of cash (HISA), GICs and bonds. It was really what happens next that would determine the right decision.
Markets went up most of the past year, but not in the early days of August when the yen carry trade was unwound by many market participants leading to a sudden drop in the markets and spike in volatility. We would also add this may have been our favourite pic/graphic from our talented marketing team.
The dividend factor really lagged broader markets during 2023 and the first half of 2024. With yields available everywhere, there is a lot more competition for income-oriented dollars. But the back half of 2024 certainly saw a comeback.
In this self-deprecating Ethos, we dove into one of our worst portfolio tilts, being equal weight for a chunk of our U.S. equity exposure. It was more of an exploration as to the rationale and thinking behind this tilt.
Not surprisingly, anything that talks about Trump seems to garner more eyeballs. We are in for a more exciting four years on the political side. This Ethos talked about starting points and how markets may be less reactionary – they do get used to this sort of thing.
Behind the scenes we often contemplate various scenarios for the markets. Of course the markets are full of surprises, but this process helps ground our thinking especially when markets become more volatile. Nobody plans to fail, but many people fail to plan.
Financial literacy is predicated on asking the question, why? Why does this market keep moving higher, why is inflation fading so slowly, why are home prices high, given low affordability? This ethos dives into a couple of portfolio tilts and why we are positioned the way we are.
Energy is one more important sector within the Canadian market. In this Ethos, we dive into providing context on the space and our thinking. At the time of writing we believed the share prices had become a bit disconnected with the commodity prices and decided to reduce exposure in our dividend strategies.
With all those dollars that piled into cash vehicles and GICs, a potential tsunami of cash was now sitting on the sidelines. In this post we discuss our thinking as to where some of the cash may migrate as central banks reduce overnight rates, and how much of it may never be bound for markets.
Financial literacy is predicated on asking the question, why? Why does this market keep moving higher, why is inflation fading so slowly, why are home prices high, given low affordability? This ethos dives into a couple of portfolio tilts and why we are positioned the way we are.
Source: Charts are sourced to Bloomberg L.P., Purpose Investments Inc., and Richardson Wealth unless otherwise noted.
The contents of this publication were researched, written and produced by Purpose Investments Inc. and are used by Richardson Wealth Limited for information purposes only.
*This report is authored by Craig Basinger, Chief Market Strategist at Purpose Investments Inc. Effective September 1, 2021, Craig Basinger has transitioned to Purpose Investments Inc.
Disclaimers
Richardson Wealth Limited
The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them.
Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.
Purpose Investments Inc.
Purpose Investments Inc. is a registered securities entity. Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
Forward Looking Statements
Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. Neither Purpose Investments nor Richardson Wealth warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. These estimates and expectations involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice.
The particulars contained herein were obtained from sources which we believe are reliable but are not guaranteed by us and may be incomplete. This is not an official publication or research report of either Richardson Wealth or Purpose Investments, and this is not to be used as a solicitation in any jurisdiction.
This document is not for public distribution, is for informational purposes only, and is not being delivered to you in the context of an offering of any securities, nor is it a recommendation or solicitation to buy, hold or sell any security.
Richardson Wealth Limited, Member Canadian Investor Protection Fund.
Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.
Related articles
Market Ethos
Top 10 Ethos of ‘23
December 18, 2023. Market Ethos. In keeping with our annual tradition, below are our favourite Market Ethos publications of the past year. We review 2023’s…
