Take a long-term view.
In the short term, the market is a voting machine. In the long term, it is a weighing machine. Short-term stock prices are influenced by a multitude of factors: interest rates, inflation, sentiment, politics, analyst upgrades and so on. But in the longer term, it is how a company specifically performs that will determine its true value. Nothing else really matters if one is looking at an investment period of 10 years or more (and you should).
Academic studies have proven that over one day or week, the odds of having a positive investment return are worse than 50/50. Over a one-year period, this rises to 73 per cent. Over three years, 84 per cent. Over five years, 88 per cent. Over 10 years, 94 per cent. Over 20 years, it’s pretty close to 100 per cent.
As they say, it’s not timing the market, it’s time in the market. But most investors do themselves a disservice by not sticking it out long enough. We get customers saying, “I’ve owned this stock for three months and it is not performing. What should I do?” Sometimes, stocks take a while to perform. Patience is certainly required at times in the market.
Unlock Premium - Try 5i Free
Friday closed with the major incides in Toronto and New York either flat or mildly down, but losing ground over the week. The TSX shed 11 points Friday to remain below 20,000 while it slipped 4% over the week. Sectors were mixed as utilities led, but real estate and materials lagged the most.
Major movers were Power Corp. at -0.86%, Suncor -0.95%, Denison Mines up 3.79% and Alamos Gold -3.8%. WTI inched modestly above $90 a barrel.
On Wall Street, the Nasdaq was basically flat on Friday, but sank 3.35% over the week. The S&P closed -0.23%, but slipped almost 3% for the week, while the Dow fell 0.31% on Friday and almost 2% over the week. Notable names were Tesla at -4.23%, Norwegian Cruise Lines at -7.45%, Paramount Global -4.96% and ON Semiconductor at 3.17%. The week was marked by central banks in the U.S. and Canada holding key interest rates, but also warning of future hikes. On Friday, the U.S. 10-year yield held around 4.438% while Bitcoin stayed around $26,500.
🏛 Power Corp (POW-T) -0.86%
🛢 Suncor Energy Inc (SU-T) -0.95%
⛏ Denison Mines Corp (DML-T) +3.79%
🥇 Alamos Gold Inc (AGI-T) -3.8%
🚗 Tesla Inc (TSLA-Q) -4.23%
🚢 Norwegian Cruise Line Holdings (NCLH-N) -7.45%
🎞 Paramount Global (PARA-Q) -4.96%
🧬 ON Semiconductor (ON-Q) +3.17%
US banks positioned favorably going forward.
Increased interest rates will benefit profits.
Capital markets business - starting to show some green shoots.
Owns several US large cap banks (JP Morgran, Bank of America, Morgan Stanley).
Consumer staples have badly lagged this year, but are clearly a defensive play. Food and energy inflation have shrunk consumer discretionary spending. Not surprised to see household retailers trade. The challenge for staples in recent years is their lean margins, but she expects a shift given disinflation.
How do you stay invested in this period of digestion where there's a lot of risk. There remains inflation pressure on consumers that will impact spending. Stick with companies that have healthy free cash float, moats, competitive advantage and most importantly, valuation. We're in the middle of a correction that is testing moving averages. What can earnings and valuations do? The Fed will be higher for longer.
What's next is earnings season, and expectations are higher over last year. There's a chance that earnings will fall short of expectations. He's been cautious in recent weeks and has been trimming exposure. He's amazed that some on Wall St. expect a soft landing and the the Fed will cut rates. They won't, and sees a recession coming, because inflation isn't under control: oil costs more, UPS and the UAW are on strike and the IRA hasn't deployed capital yet. Car leasing has soared 20-40%. Consumers will be making hard choices. The market will go lower, not higher.
Markets are digesting this. All year, stocks have said no recession, soft landing, rates will be cut next year, while bonds have signalled recession. Stocks are right; we're seeing the un-inversion of the bond market.
This week were 22 Stock Top Picks in a wide range of industries: Consumer, Financials, Healthcare, Energy, Industrials, Technology and Utilities. Here are this week’s Top Picks as selected by: Billy Kawasaki, O’Reilly, Michael Hakes, Andrew Pyle, David Baskin, Kim… read more
Ozempic has been generating a lot of buzz in the stock market lately. Investors are closely monitoring the performance of the Ozempic Stocks and speculating for the future. In this article, we will take an in-depth look at the factors… read more
Markets sold off Thursday, a day after the U.S. Fed announced it would not touch interest rates, but would keep them higher for longer and would raise them again if needed. That hawkish sentiment, similar to statements just made by the Bank of Canada, plus surprisingly low U.S. jobless claims, all contributed to a sell-off across the board in Toronto and New York.
The TSX slid over 2% to fall below 20,000 as all sectors bled red ink. Leading the laggards were staples, indsutrials, materials and real estate. Healthcare was nearly flat. Major movers included TC Energy at -2.75%, Cenovus -2.1%, Wesdome Gold Mines -7.45%, Bombardier -6.5% and Dye & Durham -6.15%. In contrast, WTI crude was relatively calm, losing a little ground and dipping below $90 a barrel.
On Wall Street, the S&P closed -1.64%, the Nasdaq -1.82%, and the Dow -1.08%. The U.S. 10-year yield rose to 4.469% as Bitcoin sank over 2% to $26,500. Key movers included Amazon at -4.41%, Caesars Entertainment -5.3%, Prologis -5.26% and Uber -4.19%. FedEx was a rare gainer, surging 4.52% despite issuing a mixed quarter.
🛢 TC Energy (TRP-T) -2.75%
🛢 Cenovus Energy (CVE-T) -2.1%
⛏ Wesdome Gold Mines Ltd. (WDO-T) -7.45%
🚂 Bombardier Inc (B) (BBD.B-T) -6.5%
💾 Dye & Durham (DND-T) -6.15%
🅱 Bitcoin (BTCUSD) (CRYPTO:BTC) -2%
📦 Amazon.com, Inc. (AMZN-Q) -4.41%
♠ Caesars Entertainment (CZR-Q) -5.3%
🏛 Prologis (PLD-N) -5.26%
🚗 Uber (UBER-N) -4.19%
🚚 FedEx (FDX-N) +4.52%
She's looking at the sector, but hasn't found the right investment vehicle. When an area becomes topical, valuations get ahead of themselves. Has a lot of potential, especially with EVs.
Curated by Michael O'Reilly since 2020.
1550+ opinions with
4.81 rating (one of the best performing expert).
Our PAST TOP PICK with MU is progressing well. To remain disciplined, we now recommend trailing up the stop (from $52) to $61 at this time.
Your Watchlist
Add stocks to watchlist to monitor them daily and get important alerts.
Get Access To Watchlist