MoneyLetter Articles

Limit Your Risk Keep Your Money

November 2020A Slowing S&P, and the End of Free Money

September 2020Opportunities Hold Your Cash

July 2020 Smart Money Dirty Money

November 2019 – Anywhere But Up“The trouble with the TSX index is that it is MPLML_2013_Richards a concentrated index.” 

September 2019 – The Weakest Month – “Trump’s twitter seems to be throwing the markets around quite a bit lately.”

July 2019 – Bull or Bear – “I’m suddenly realizing that the Dow was demonstrating an expanding pattern.” 

May 2019 – Jump In – “The stoppage at the old highs is no coincidence.”

April 2019 – Keep Your Money – “Sooner or later, the market can and will break out of a period of sideways volatility.”

March 2019 – Keep Calm – “We have 3 main position sizes when we buy a stock.”

February 2019 –  Oil and Gold- Watch Closely-“Many investors are looking to asset classes that are not correlated to stocks, both for hedging and opportunistic reasons.”

December 2018 – A New Trend – Look Sideways– “Things have changed. The market is now moving in a contained range of higher volatility.”

November 2018 – Blood in the Streets – Buying Opportunities “There are some quantitative factors that we can watch for signs of ‘blood in the streets’. I have collected a number of these ‘fear-sensing’ sentiment factors, along with some breadth and trend factors – and created a broad based indicator that I call the ‘Bear-o-meter’.”

September 2018 – Beware of the Force – “Did you know that when you place a stop loss order, that order is transparent?”

August 2018 – Do it now – Agile Investor – “Everyone is a hero in a bull market. It’s the bear market that separates the competent investors (and money managers) from the wanna-be’s.”

June 2018 – Canadian Conglomerates – Buy some, avoid others – Conglomerates appeal to some long-term investors  because of their diversified holdings.  Some having holdings that are so different that they act like a diversified mutual fund or ETF (only without the fees and often with a management team holding significant skin in the game) – BUT, that doesn’t mean that all conglomerates are worthy of being held.  Let’s have a look…

April 2018 – The US Dollar – A Possible Hedge – Loons fly north from their southern retreats as Spring approaches.  So too do Canadian retirees known as “snowbirds”.  The Canadian dollar, affectionately known as the “loonie”, follows that same desire to fly north as the weather begins to warm.

March 2018 – As the Stocks Rotate, Follow the Money – The market cannot continue to push high-growth stocks up in a straight line.  Something has to give sooner or later.  Money may rotate out of some of these high flyers into value stocks, and/or overlooked sectors, such as the US Banks, Energy and WTIC crude oil, Gold, and Consumer Staples.

December 2017 – The months ahead?  What looks good – Markets tend to be strong in the final month of the year.  The tendency is for the year’s big movers to continue to lead until the end of December, while the laggards continue to sell off due to tax loss selling and other reasons.

November 2017 – Whither the Loonie? To Rally – Or Not? – I noted in my blog quite some time ago that I had an initial target of 0.80 – 0.81, with a maximum upside of 0.84 for the loonie.  That is pretty much what we got, with the loonie reaching a high of 0.83 in September.  Since then, as predicted, the loonie has been moving back into its longer-term dominant trend.

September 2017 – The Right Approach – Whether you manage your own money or use a portfolio manager, stay with the active approach.  It’s worth the safety – should the market turn ugly.

July 2017 – The Right Strategy? “Diversify”, He Wrote – It is imprudent to hold a Canada-only stock portfolio and expect to earn a respectable risk-adjusted return.  There is just too much concentration within the TSX in resources and financials…

June 2017 – Market Rotation: Hero to ZeroOver the past few years I’ve referred to the market as a “stealth” market.  That is, one that sees money rotate from winning stocks into depressed stocks, and vice-versa.  Rotation from sector to sector is also becoming faster and more pronounced of late.  It is for this reason that I believe in truly active management of your portfolio…

April 2017 – Income and Growth: Four KeepersInvestors become so fixated on chasing a higher return that they don’t think about the increased risk to their portfolio that’s inherent in doing this.

March 2017 – Oil and Gas StrategyOil tends to be a good trade between February and May – from a seasonal perspective.

January 2017Caveat emptor in the…Short TermNormal seasonal tendencies are for markets to get a bit choppy from mid-January in through much of February.

December, 2016Holding and Folding…a blanket “Buy and Hold” at-all-costs mentality is actually a riskier and costlier investment strategy than a carefully planned system of buying and selling assets.

November, 2016 – Debt Will Affect YouToo much debt will drag you down, know how much you can afford.

September, 2016 – US Equities?  All Eyes on USDA rally by the USD against world currencies will put downward pressure on our loonie, potentially amplifying the upside of holding some US denominated securities.

July 2016Enjoy the Music – Watch the TrendGreater than average chance for volatility before winter: Seasonality, Presidential Cycle, and Sentiment.

June 2016A summer strategy – Risk and reward continuously lurk about in the markets.  Just because markets, or a sector, are statistically skewed towards more risk over the summer does not imply that you will always lose money if you invest during that time period.  Further, lower beta stocks may end up underperforming during the summer, despite their historic tendency to outperform in that timeframe.

April 2016The bear is growling…sell growth, buy defenceAt ValueTrend, we’ve held a defensive stance through the first quarter of this year.  Yes, me missed out on some upside as markets rallied in February and March.  However, there is reason behind our madness.  Allow me to point out some indicators that encourage a defensive position.  Some are technical (crowd and price behavior) indicators, some are fundamental (valuation and economic).

March 2016Bear market strategies – shorting the market with ETFs, stocks, currencies, and gold – Breakouts need a catalyst – in either direction.  I cannot see a positive catalyst to push the markets up from this point.  Eventually, a bottom in oil may become that bullish catalyst.  Further evidence of basing in oil is necessary before confirming that potential.  Given this bearish outlook, rallies should be sold, unless you have enough fortitude to withstand what could be a strong correction before the next bull phase.

January 2016Bad news bears holding sway – it would appear that the summer lows for the US markets at around 1870 will be retested fairly soon.  I would think that this level will support stocks – or at least offer some near-termed support for a bounce.  If they don’t hold, it will be ugly for markets across the world.

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