New Fund Rating System Launched in 2015
When I first started providing a rating on mutual funds back in 2002, I developed a formula that considered a number of key performance and risk metrics. It looked at absolute return, relative return, volatility and relative volatility. It also took into account the length of track record of a fund when determining the rating for a fund. It seemed to work very well over the years, but its biggest drawback was that it was complicated to explain. Whenever an advisor or investor would ask about my rating system, I could never explain how I...
read moreSeptember 2013 Market Recap
Lack of taper announcement pushes markets higher As we entered September, investors were focused on the September meeting of the U.S. Federal Reserve’s Open Market Committee. The consensus was that this meeting would be when the Fed chair Ben Bernanke finally announced that they would begin to slow the pace of their massive bond buying program, signaling the beginning of the end for low interest rates. Traders were widely expecting a cut of between $10 billion and $20 billion per month. Then, Mr. Bernanke did the unthinkable and did not...
read moreFebruary 2013 Market Recap
Investors Rewarded Despite Mixed Signals February was another profitable month for investors with all major equity and fixed income markets moving higher. In Canada, the S&P / TSX Composite Index gained 1.3% on the month. U.S. equities were higher with the S&P 500 gaining 1.4% in U.S. dollar terms. For Canadian investors, the gain was amplified, as the Canadian dollar dropped from $1.0008 on January 31 to end the month at $0.9723. In Canadian dollar terms, the S&P 500 was up 4.7%. The MSCI EAFE and MSCI World were both higher in...
read moreJanuary 2013 Market Recap
2013 Starts out Strong for Equity Markets 2013 started out very well with all major equity markets in positive territory. The S&P/TSX Composite Index gained 2.25% during the month, but lagged its global brethren. The S&P 500 gained 5.73% in Canadian dollar terms, while the MSCI EAFE Index rose by 5.74%. In fact, the S&P 500 had its best month since October 2011 and it was its biggest January gain since 1997. In the U.S., much of the rise was justified after lawmakers reached an agreement to avoid the fiscal cliff and agreed to...
read moreOctober 2012 Market Recap
October Recap Despite data showing that U.S. manufacturing continued to expand pushing GDP growth higher than expected, reducing unemployment, it was concern over the impending “fiscal cliff” which weighed on U.S. markets in October and since the November election. The fiscal cliff is the combination of the expiration of Bush era tax cuts and a slew of massive spending cuts that are slated to take effect in the New Year. Unless a compromise is reached, many economists expect that the impact of this will be an increased tax burden of about...
read moreJuly 2012 Market Recap
Global markets got a boost following the July 26 comments made by the European Central Bank’s president Mario Draghi. In his remarks, Mr. Draghi stated that the ECB would “do whatever it takes” to ensure that the Euro remained intact. Investors took this as a sign that the ECB would take immediate simulative action in an effort to shore up the European economies, bidding stock prices higher.
read moreJune 2012 Market Recap
After a relatively tame first-quarter, volatility returned to the global equity markets with a vengeance, whipsawing stocks with a ferocity that was reminiscent of 2008. Despite a modest rally in June, the S&P/TSX Composite Index still lost 5.67% on the quarter. Global markets seemed to hold up a little better, with the S&P 500 shedding 1.0% and the MSCI EAFE Index dropping 5.0% during the quarter. Not surprisingly, fixed income fared well, gaining 2.2% as investors flocked to bonds on their safe haven appeal.
read moreApril 2012 Market Recap
After posting strong gains in the first quarter of the year, equity markets retreated in April as investor concerns over the European debt crisis returned. The MSCI Europe Index dropped by nearly 3% after credit ratings agencies downgraded Spain’s debt with a negative outlook, hinting that further rating cuts may be coming. Spain paid a heavy price for this downgrade with the MSCI Spain Index plummeting by more than 13% in the month.
read moreMarch 2012 Market Recap
For the past year, market sentiment has been dominated largely by the debt crisis that continues to boil over in Europe, causing fear and panic among investors. In the first quarter of 2012, this situation was merely simmering, allowing investors to focus on the economic recovery that appears to be well underway in North America.
Sentiment was buoyed by encouraging data in the U.S. showing that the housing market is rebounding, job growth has been encouraging for six months, and consumer confidence remains positive. In Europe, while the economy is showing signs of slowdown, markets rallied strongly on news that the European Central Bank had injected funds into many banks in an effort to help spur economic growth.
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