Insights: Thoughts on the U.S. election, Canadian housing, philanthropy + bald eagles
Good reads:
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·???????? Weekly Investment Strategy
·???????? Election Market Overreactions
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Best quote of the week:
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“The best argument against democracy is a five-minute conversation with the average voter.” – Winston Churchill
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Thoughts on the U.S. election:
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Obviously, there are a lot of questions about how the outcome last week will impact investors.
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Raymond James Chief Investment Officer, Larry Adam, CFA, has put together a great summary exploring the following:
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·???????? Which policies can be implemented by Executive Order (no Congress approval is needed)
·???????? Which policies are implemented by Congressional approval?
·???????? How will Trump impact the economy?
·???????? What is the outlook for the equity market?
·???????? Which sectors stand to benefit?
·???????? What is the potential impact on interest rates?
·???????? What will happen to the U.S. dollar?
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The bottom line, as outlined in the report: while politics can drive headlines, fundamentals drive the equity market longer term. And regardless of which party wins the White House, history has shown that the equity market climbs ~9% on average in the 12 months following the election. With the positive fundamental backdrop (i.e., solid economic and earnings growth), the bull market should continue and drive the equity market higher over the next 12-24 months. However, as a third year of a bull market typically sees lower returns on average relative to years one and two, future gains will likely be more muted.
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Below is a great chart that puts it all into perspective. Remember, it is easy to let emotions (particularly with this election!) drive investment decisions, but it is best to take a more pragmatic view with it. I know, easier said than done, but well worth it for long-term investors.
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Here is a link to the full report .
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Best visuals of the week:
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Interest rates and Canadian housing have been hot investment topics lately. If you’re wondering what is potentially in store, here are some great points (and charts) from my Raymond James analysts.
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With interest rates coming down, homeowners have seen some relief with regards to lower mortgage rates. However, rates on both fixed and variable mortgages are still quite a bit higher than pre-pandemic levels. Consequently, it’s expected that homeowners with three- to five-year fixed-rate mortgages will see average rate increases between 1.70% and 2.4%.
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As noted in the Raymond James report, new listings have been increasing faster than new buyers entering the market, which means there hasn’t been much movement in home prices.
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Generally, buyers tend to join in as rates near their expected bottom. When that happens, you tend to see home values go up. However, we are currently in the early to middle stages of rate cuts, so it is expected that housing prices are likely to stay relatively flat and remain stable through the end of the year.
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Best soundbites of the week:
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If you’re still fixated on the U.S. election (who isn’t?!), here is some sage advice to keep in mind from A Wealth of Common Sense.
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“I don’t believe politics should ever play a role in your investment decisions.?Partisan politics feels like they are infused in everything these days. It’s impossible to avoid. Presidents get too much credit when the economy is strong and too much blame when the economy stumbles. Politicians don’t control the economy, stock market, gas prices, or grocery prices.
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Here are the total returns from the past four presidential election dates:
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·???????? Election day 2008 +675% (14% annualized)
·???????? Election day 2012 +400% (14% annualized)
·???????? Election day 2016 +207% (15% annualized)
·???????? Election day 2020 +81% (16% annualized)
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You can believe what you want to believe about politics, but those beliefs have no place in your portfolio.”
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-?????? A Wealth of Common Sense article
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You’re Invited: Fostering Generosity – Philanthropy for Today and Beyond
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Discover the evolving landscape of philanthropy in Canada. This webinar will explore innovative giving strategies and assist clients in ensuring that their charitable legacies are both impactful and sustainable. Attendees will also learn how charitable giving interconnects with the areas of trusts, estates, and financial planning. Whether you are a seasoned donor or just beginning your philanthropic journey, this webinar offers valuable insights and practical guidance to help you create a legacy of generosity.
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Date: November 21, 2024
Time: 10am PT/1pm ET
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Contact me directly for a registration link: [email protected]
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New Raymond James mobile app
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We're excited to announce that Raymond James Ltd. has launched a new mobile app, designed to enhance your experience with us and empower you to make informed decisions about your finances.
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Key Features You’ll Love:
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·???????? Stay Informed: Instantly access your portfolio, essential documents like statements, trade confirmations and tax documents—all in one convenient location.
·???????? Convenient Access: Available on both the Apple App Store and Google Play Store, so you can stay updated anytime, anywhere.
·???????? Personalized Experience: Review your personal profile and connect with your advisor directly through the app, ensuring you're always in touch with our team.
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Please reach out to Saundra for more details: [email protected]
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Beyond the markets:
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Given the world’s focus on the U.S. lately, I thought I’d share some interesting facts about one of the birds most associated with America, the bald eagle:
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·???????? Young bald eagles have mostly brown heads. In fact, for the first four or five years of their lives, they move through a complicated series of different plumage patterns; in their second year, for instance, they have white bellies.
·???????? Bald eagles emit a sort of high-pitched giggle or a weak scream , not the rough, piercing scream most attributed to them. In fact, Hollywood sound editors often dub over bald eagle calls with far more impressive sounds: the piercing, earthy screams of a smaller bird, the red-tailed hawk.
·???????? Bald eagles tend to pair up for life, and they share parenting duties: the male and the female take turns incubating the eggs, and they both feed their young.
·???????? Bald eagles may live 15 to 25 years in the wild, longer in captivity.
·???????? On average, bald eagle nests are 2-4 feet deep and 4-5 feet wide. But one pair of eagles near St. Petersburg, Florida, earned the Guinness World Record for largest bird’s nest: 20 feet deep and 9.5 feet wide. The nest weighed over two tons.
·???????? Male bald eagles weigh about 25 percent less than females.
·???????? If you’re trying to identify a bald eagle, they usually soar with their wings almost flat. In contrast, the turkey vulture—another dark, soaring bird—holds its wings up in a shallow V shape called a dihedral. A lot of large hawks also soar with slightly raised wings.
·???????? Bald eagles have a see-through eyelid called a nictitating membrane. They can close this membrane to protect their eyes while their main eyelids remain open. They can also see ultraviolet light.
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Source: Mental Floss
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Thanks for reading, and I wish everyone a wonderful weekend!
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Cheers,
Kim
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Kim Inglis, BCom, CIM, PFP, FCSI, RIAC
Senior Portfolio Manager
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T: 416.777.6417 (Toronto)
T: 604.654.1160 (Vancouver)
T: 250.979.1803 (Kelowna)
TF: 1.877.363.1024
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