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Around The World In 100 Words - September 2018; Week 38

Around The World In 100 Words

SEPTEMBER 2018; Week 38


With summer in the record books -and it was a great one!, it’s time to take stock (ahem) of where we are in the year. This Globe and Mail article graphically summarizes how disappointing equity returns have been.  

Other than US markets, global stock exchanges are either flat or negative for 2018. Investment returns should be understood in this context, because knowing how you’re doing requires knowing how the overall markets are doing. So what gives? Well, once you’ve stripped out the FAANG stocks (Facebook, Amazon, Apple, Netlflix and Google) and Pot Producers, stock market returns are even worse.

Here’s the thing. The global economy is in the best shape it’s been in for 10 years. Record corporate profits, low unemployment, (still) cheap money and a more optimistic outlook, with global political stability far better than the headlines suggest (ISIS defeated, North Korea offering to destroy its nuclear arsenal, the war in Syria abating, Israel and Palestine stagnant and even Russia relatively quiet). 

To be sure, the world’s a mess -it always is. But the degree of slovenliness is a notch or two down from the norm.

Oh, and in case you’d thought I’d forgotten about Mr. Trump. Impossible of course. But the sum of his legislative agenda has been to vault the world economy to the forefront. Perhaps, just perhaps, this will be enough to get the rest of the world leaders to adopt pro-business, low tax, low regulation entrepreneurial policies that will help to make their countries great again too. Big government, big deficit, high regulation economies are sclerotic to the free market. It’s not hard to see which approach yield better results.

Accordingly, our investment fund portfolios are geared to the US companies with global reach, positioned for solid returns going forward. The next 3 months should be interesting, but we’re expecting the rest of the year to look like the first part. More to come on this!


Martin