MP Week In Review
Scott G. Marshall - Jan 04, 2019
Back and Forth
This New Year 2019 has started much like 2018 finished, a mix of volatility and sensational news and sound bites mixed in with more than a dash of political noise and change.
“For last year’s words belong to last year’s language and next year’s words await another voice. And to make an end is to make a beginning.” — T.S. Eliot
Right out of the gates Apple pre-warned on their earnings and forward guidance, they expect lower sales as a result of competition and saturation and tariffs, the stock dropped immediately in price by 10%. This news rattled markets and we have seen an initial weak start to the year. FedEx had similarly warned of slower growth and lower earnings late in 2018 and that was met with a similar negative market reaction. Other factors are at play too though, including the US Government shutdown, the US Fed’s recent interest rate raise, and also China and the USA and their tariff tiff continuing. If you think about it, investment conditions globally are looking now to be almost the mirror image of what we had over the last number of years. Instead of ever lower interest rates and government stimulus we are seeing rate increases and no more stimulus money to prime the pumps. We previously enjoyed global commerce supported by (mostly) open markets and now we are seeing protectionism and the threat of walls going up, physical and ethereal barriers to trade and commerce. Returns likely will be tougher to find and volatility is likely to continue apace.
Here is a snapshot of various world markets and their 2018 results;
The Canadian TSX was -12.6% through 2018. if you add back dividends and interest the TSX total return for 2018 was -8.9%. In the USA the Dow 30 was -7.1%, the S+P 500 was -6.6%. In China the Hang Seng was -13.9% and the Shanghai Composite index was down over 20%. Our Tactical Income portfolio was down 1.37% and our Tactical Growth portfolio was – 2.31% (Gross of Fees) through that same time comparison. I know that does not elicit back slaps and high five’s but it illustrates the protection and preservation of assets in these down markets. Our Pivot indicator signaled weakness last October and we listened and acted, the results are clear. Our Tactical accounts in 2017 more than doubled the return of their benchmarks so it works both ways. I am going to keep pounding this message home, Pivot works! We listen, we act, as a result you win, you make more money, you keep more money, you protect assets better in a downturn.
If any pundit or television or online prognosticator catches your attention be wary. These perma bulls and buy the dips sorts don’t run a penny of your money and are nowhere to be found as markets turn really weak. They are not accountable to you. We are. It takes hard work and early wake ups and lots of coffee but we love it, we have over twenty years together as a team getting better and better every day.
“Be so good that they simply can’t ignore you.” – Unknown
On we go. TFSA and RRSP contributions are next, followed by tax reporting and support. My 61st birthday is coming up and I have been giving some thought to retirement. After over twenty-three years in this business with this team I intend to work another twenty years. I’m not much good at golf anymore and I can’t sleep in past 4AM so my favorite thing to do and place to be is here.
“It’s always too early to quit.” – Jason Kidd
Have a great 2019