Diamond

As summer draws to a close, volumes are relatively low in the market. The TSX was virtually unchanged last week, down less than three points compared to last Friday’s close.  This decline does not indicate that all stocks or sectors achieved the same neutral result.  The Energy and Materials sectors pulled the rest of the index downward. Commodities within the Materials sector, like copper, zinc, gold and other precious metals fell as the confidence in China’s economic growth also fell.

 

Gold hasn’t been this low since January 2017, and copper has lost 20% since June 2018. As of late, when the US dollar has strengthened gold has retreated in the other direction. Now may be a good time to add to gold positions or start to research whether this is a sound alternative asset class for your portfolio. Once the US “wins” the trade war they will want to engineer a lower US dollar to make their exports more attractive. If the US dollar/gold trend continues, a weakening US dollar should benefit gold.

 

On the international front the not-so-exciting news, even for Canadians, was the bilateral progress made between the U.S. and Mexico on NAFTA renegotiations. The more exciting and globally significant announcement was the continued debt and currency struggles for Turkey.  The two prominent debt rating agencies, Moody’s and Standard & Poor’s, lowered their ratings for Turkey’s sovereign debt. The Turkish Lira has lost 40% of its value against the U.S. dollar.  Turkey’s difficulties have drawn additional scrutiny for other emerging markets and economies, casting a cynical and dark shadow on them. Many investors use emerging markets for more speculative investments, so any losses or volatility shouldn’t be a surprise, but no less easy to accept.

 

While the haze of the BC fires has blown as far east as Ontario, we are reminded that we cannot control mother nature, much like we cannot control the stock market. This summer we have spent a tremendous amount of time ensuring your portfolios are appropriately positioned to weather unforeseen events. I was reminded on a boat trip once to keep my eyes on the horizon to avoid getting sick, and the same holds true for investing. Watching the waves hit the boat is the same as the short-term turbulence we experience, which will not help you achieve your goals. Remember to keep your eye on the horizon, albeit it a smoky one today.

177-B St. Mary's Rd.
Winnipeg, MB   R2H1J1

1.204.256.5555

Phone Icon
The Wrap Up – Keep your Eyes on the Horizon |