Roberts Nash Advisory Group

Déjà Vu

It seems like every couple of weeks we get the feeling that the US equity markets are rolling over.  The economic news is generally weak.  Overall, earnings have been surprising on the upside, but revenues have been weaker than expected.  This is stretching margins to historic levels.  A number of markets around the world have broken support including the S&P/TSX Composite Index.  Gold and Silver and many other commodities topped out in 2011 and have recently broken down significantly.  Yet with all this, the US major indices continue to new record highs.  Recent corrections in the US have been minor with a 3.8% pullback being the max since the end of last year[i].  There is a strong uptrend in place that will likely continue to drive investors into the market until it is broken - and it is not broken.  Last week there was even a false tweet that caused a 130 point DJIA down move in a matter of minutes, and this did not phase the market.  Any news event could disrupt the trend, but we accept it is currently in place and remain somewhat invested to participate.  Investors must be careful not to get carried away with enthusiasm to the determent of future returns.  Our team “helps Families Protect and Grow Their Wealth”.  Protect is first for a reason.  When the markets make us nervous, we view “Protect” as the more important word and look to move asset allocations to the lower end of the suggested equity range.  We know from experience that it is impossible to time the market consistently, and that is why we never suggest investors move “all in” or “all out”.  We look to history, define the probabilities of future market behaviors, and make our decisions accordingly.

Footnote - S&P 500 Index – April 11th high of 1597.35 to April 18th low of 1536.03. Source: Thomson One


** I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial **

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