Insights: Why GIC rates aren't higher, stock market vs inflation + what's in a logo?
Good reads:
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·????????Weekly investment strategy
·????????Seven reasons to use a family trust
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Best quote of the week:
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“Hedge Fund leverage is near all-time lows and retail investment accounts have record cash. Sounds like we’re closer to stock market bottom than top.” – GRIT Capital
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Best soundbite of the week:
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Wondering why GIC rates haven’t gone up as much as the Bank of Canada’s overnight rate??Here’s why:
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Forget the Bank of Canada’s overnight rate if you’re a GIC buyer. The rates to follow are the yields on bonds issued by the federal government to finance its operations. For example, five-year GIC yields are influenced by the five-year Canada bond, which late last week had a yield of 3.3 per cent. – The Globe and Mail article
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A good reminder about the virtues of sticking with your plan:
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Many investors know that the buy-and-hold approach makes sense, in theory. Yet they can’t resist the urge to make changes to their portfolios. When a stock rises, they sell to lock in their profit. When a stock tanks, they take their lumps and move on to the next shiny object. The underlying assumption is that they must trade to win at investing. This notion is reinforced by financial websites and ads for discount brokers that feature the latest whiz-bang trading tools. But if you own great companies, the best approach is to do nothing. Stock prices always bounce around in the short run, but over the long run excellent businesses will reward you with capital appreciation and rising dividends. Don’t take my word for it. As Warren Buffett wrote in one of his letters to Berkshire Hathaway shareholders: “When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever.” – The Globe and Mail article
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Some additional thoughts to keep in mind when times are tough:
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Buy low sell high. Be fearful when others are greedy. Etc, etc. It’s easy to be brave when stocks are going up. But putting money on the line when nobody else wants to takes actual courage and intestinal fortitude. You’re never going to buy the bottom, and you’re almost always going to regret it in the short term, but if you can stomach the pain, you’re usually rewarded over the long term. – The Irrelevant Investor blog
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Best chart of the week:
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What matters more to the stock market: interest rates or inflation??If you run the numbers, the stock market is much more sensitive to inflation. There are many indications that we’ve likely seen peak inflation, so this could bode well for the market once it’s been confirmed that inflation is backing off.
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Best visuals of the week:
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I came across a great visual that shows how the economic cycle works. Approximately 70% of the US economy is driven by the consumer so the basic premise is that people have to work in order to have disposable income to spend. Their spending then drives revenues and this is what ultimately drives an economy forward. This also helps explain why often the market and the economy are not always in lockstep.
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Client Insights: Quarterly update and market outlook
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Please join us for a special zoom webinar with Raymond James Ltd.’s Head of Investment
Strategy Nadeem Kassam.?Nadeem will share his outlook on the global economy along
with major themes, opportunities and risks he sees on the horizon.?
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Date: October 26, 2022
Time: 10:00 am PT/1:00 pm ET
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Contact us to register for this complimentary event: [email protected].
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领英推荐
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JDRF Ride for the Cure:
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Did you know there are currently over 300,000 Canadian children, adolescents and adults living with Type 1 Diabetes? It’s an auto-immune disease with no known cause or cure and ~30 Canadians are diagnosed every single day.
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My amazing assistant Saundra (pictured in the middle) is raising funds to support the Juvenile Diabetes Research Foundation – JDRF.
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Next week she’ll be participating in the 2022 Sun Life Ride to Defeat Diabetes for JDRF.?If you’d like to support the cause, please donate here.
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I’d love to hear from you!
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Do you have a question about the markets? Or perhaps you’d like to learn more about a particular financial planning topic? Maybe you’ve got a question about your own personal situation?
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Send me your question, and I’ll include it as a topic in an upcoming newsletter: [email protected].
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Beyond the markets:
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I read an article this week discussing Ford’s latest supply chain issue: a shortage of the blue oval badges in uses for the logos.?Apparently the auto maker has had to hold back shipments of some vehicles because of difficulties getting model nameplates and company logos.
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This of course had me thinking about the importance of logos. Here are some interesting facts on famous logos that have hidden messages or images in them:
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·????????FedEx’s logo is probably one of the best-known in the world of “hidden image” logos. For those who are unaware, take a look between the “E” and the “X,” where the negative space forms an arrow.
·????????Famously founded by Dave Thomas, the Wendy’s brand identity highlights a personal and “home-cooked” feeling. Take a closer look at Wendy’s collar and you will see the word “mom.”
·????????On first sight, the logo for tortilla chips and dips manufacturer Tostitos appears to be the Tostitos name in front of a vibrantly colored background. However, the two “T’s” of this logo make up people, as they dip a tortilla chip into the bowl of salsa on top of the letter ‘I’.
·????????Toblerone was started in Bern, Switzerland, a city famously associated with bears. Now take a closer look at the logo’s mountain and you will see a bear.?You may also find yourself craving some chocolate!
·????????In the Formula One racing logo, the red color represents passion and energy, while the black color represents power and determination. With another play on negative space, the F1 logo is more than a black “F” with red racing stripes; the space between these two main focal points is the number 1.
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Source: CNBC
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Thanks for reading, and I wish everyone a great weekend!?
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Cheers,
Kim
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Kim Inglis, BCom, CIM, PFP, FCSI, CAFA
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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The opinions expressed in this newsletter are those of the Financial Advisor Kim Inglis, BCom, CIM, PFP, FCSI, CAFA and not necessarily those of Raymond James Ltd. (“RJL”) or Raymond James (USA) Ltd. (“RJLU”).?Statistics, factual data and other information presented are from sources, believed to be reliable but accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James Ltd. and Raymond James (USA) Ltd. is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James Ltd. and Raymond James (USA) Ltd. financial advisors may only transact business in provinces and/or states where they are registered. Follow-up and individualized responses involving either the effecting of or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in provinces or states where the financial advisor is not registered. Raymond James Ltd. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund. Raymond James (USA) Ltd. is a member of FINRA/SIPC. Raymond James (USA) Ltd. (RJLU) and advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. This provides links to other Internet sites for the convenience of users. Raymond James Ltd. is not responsible for the availability or content of these external sites, nor does Raymond James Ltd endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same privacy policy which Raymond James Ltd adheres to.