Fear is no doubt controlling the equity markets as the bulls and the bears continue to battle it out. The flight out of the Euro and into the US Dollar over the past couple of months has been dramatic to say the least.
This trend could continue until the Eurozone finds a viable solution to its debt problems. The equity markets have been manic with some very dramatic moves from day to day. On a technical basis, equities are oversold at current prices and a bounce is due any time. That being said, markets could experience another wave of panic selling to wash out the “weak hands” before any kind of a summer rally ensues. In preparation for what we believe could be a difficult Fall, we have been recommending clients take a measured investment approach by reducing equity exposure.
One characteristic of any lengthy, grinding bear market is its tendency to be compromised by a series of sharp pullbacks, interspersed with strong rebounds which usually tend to last several weeks. The 1930-32 bear market is probably one of the best examples, in which we had nearly a dozen separate retreats, each of which led to a sharp, short-term surge. Could we be on the cusp of another bear market? The interesting aspect of this type of environment is that the opportunities for the prudent, astute investor are tremendous. Ultimately we believe that the combination of “Tactical Equity” investing and ownership of quality fixed income positions will prove to be a successful portfolio strategy. We will continue to capitalize on the market volatility by buying equities when panic sets in and selling when the headlines are rosy.
Policymakers hold the key to easing investors concerns and it starts with the European banks finding viable solutions to the sovereign debt problems. The proposed global bank tax hardly looks like a pressing need until the European Union can stop the contagion from spreading any further.
Soundbite
- A new survey by Royal LePage Real Estate Services says BC residents identify lifestyle as the chief reason for purchasing recreational property. 49% of potential purchasers are looking to improve their lifestyle while 44% see it as a good investment according to the Angus Reid survey. Those polled sighted waterfront or beach access as the most coveted feature with 44% desiring four-season use. Recreational property in BC is by far the country’s most expensive, with average prices between $345,000 and $1.5 million compared with Ontario at $140,000 to $1,050,000.
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JAMIE SWITZER | Raymond James Ltd.
Senior Vice President, Financial Advisor
North Vancouver IAS
PH: 604.981.3355 | FAX: 604.981.3376
jamie.switzer@raymondjames.ca
MARC LATTA | Raymond James Ltd.
Senior Vice President, Financial Advisor
PH:604-981-3366 | FAX: 604.981.3376
marc.latta@raymondjames.ca
Suite 480, 171 West Esplanade
North Vancouver, British Columbia
This newsletter expresses the opinions of the writers, Marc Latta and Jamie Switzer, and not necessarily those of Raymond James Ltd. (RJL) Statistics and factual data and other information are from sources believed to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is not meant to provide legal, taxation, or account advice; as each situation is different, please seek advice based on your specific circumstance. RJL and its officers, directors, employees and their families may from time to time invest in the securities discussed in this newsletter. It is intended for distribution only in those jurisdictions where RJL is registered as a dealer in securities. Any distribution or dissemination of this newsletter in any other jurisdiction is strictly prohibited. This newsletter is not intended for nor should it be distributed to any person residing in the USA. Within the last 12 months, Raymond James Ltd. has undertaken an underwriting liability or has provided advice for a fee with respect to the securities of the Royal Bank of Canada. Raymond James Ltd is a member of the Canadian Investor Protection Fund.
JAMIE SWITZER | Raymond James Ltd.
Senior Vice President, Financial Advisor
North Vancouver IAS
PH: 604.981.3355 | FAX: 604.981.3376
jamie.switzer@raymondjames.ca
MARC LATTA | Raymond James Ltd.
Senior Vice President, Financial Advisor
PH:604-981-3366 | FAX: 604.981.3376
marc.latta@raymondjames.ca
Suite 480, 171 West Esplanade
North Vancouver, British Columbia
This newsletter expresses the opinions of the writers, Marc Latta and Jamie Switzer, and not necessarily those of Raymond James Ltd. (RJL) Statistics and factual data and other information are from sources believed to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is not meant to provide legal, taxation, or account advice; as each situation is different, please seek advice based on your specific circumstance. RJL and its officers, directors, employees and their families may from time to time invest in the securities discussed in this newsletter. It is intended for distribution only in those jurisdictions where RJL is registered as a dealer in securities. Any distribution or dissemination of this newsletter in any other jurisdiction is strictly prohibited. This newsletter is not intended for nor should it be distributed to any person residing in the USA. Within the last 12 months, Raymond James Ltd. has undertaken an underwriting liability or has provided advice for a fee with respect to the securities of the Royal Bank of Canada. Raymond James Ltd is a member of the Canadian Investor Protection Fund.