Concerns and Commentary for Stocks and Housing Market

June 12, 2017

 

Last Thursday I had the opportunity to spend some time with Myles Zyblock, Chief investment strategist for Dynamic Funds.  I have tried to highlight the CORE themes in this edition of ‘for what it’s worth’.

 

#1 CONCERN:

  • U.S. stock valuations are biggest concern

  • Stretched valuations

  • If something goes wrong expensive markets get hit

 

Commentary:

  • Small changes in earnings growth can have a BIG effect on a stock price

  • Earning hit bottom about 3 quarters ago

  • Earnings have been improving since then

  • Valuations in EUROPE look good

  • Valuations in EMERGING MARKETS look excellent

  • We are LATER IN THE CYCLE for sure…more room for higher prices in Europe, and the Far East

  • CDN housing is over-valued when compared to incomes and rent (the U.S. is not)…nothing goes straight up!

 

  • IF HOUSING SLOWS CDN$ TANKS

 

 

FACT (sample period 1928 to 2016)

 

The average intra-year maximum drop in the SP500 (US equity market) is -16.%!

Despite these NORMAL large calendar year drops, 66.3% of calendar years is positive.

 

CONCLUSION:  if you cannot handle pullbacks then minimize your exposure to equities…however this will also reduce your average returns over 5 year periods.

 

 

 

 

The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. This does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision.

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