Note Précis January 26,2018: Q1/2018 – Caveat emptor on market momentum arises due to risk, value and societal stress about the distribution of the benefits of global growth. Amid euphoria, diversification is necessary. In equities, valuation contraction is globally a risk. More effort should be devoted to value and progress in restructuring as opposed to momentum. Restructuring leadership in and from the financials remains crucial. We would put more emphasis on sector selection rather than on geographical discrimination. Relative sectoral weightings globally vary widely. On this basis, we expect overall market leadership to still be from the United States via sectors like information technology and industrials, be in emerging markets via growth and include materials/energy segments via markets like Australia and Canada. In overpriced fixed income markets now with changing central bank conditions again led by the Federal Reserve, we position our benchmark towards low to medium duration. Junk bonds especially face the potential for rising risk premiums and illiquidity if adverse conditions were to develop, such as higher inflation or weaker corporate revenues. Central banks need to evaluate systemic risk from the demographic and capital allocation impacts of their policies. In markets, ETFs liquidity is likely not as extensive as the prevailing fervor assumes. After all, iIt was the lesson of the portfolio insurance debacle of 1987 and credit in 2007. From trade to governance to geopolitics, there appear increased signs of political economy fracture. Currency markets need careful monitoring. For these reasons, we espouse holdings in alternate assets, more specifically precious metals.
We look to earn our independent research value for you. To avail of our services and complete note access information, contact us as below and on www.subodhkumar.com.
Subodh Kumar,CFA/1.416.666.4590/mob:1.416.877.5603/fax:1.416.239.4590/Subodh Kumar & Associates – division of StrategeInvest Inc (Canada Corporation Number: 445643-2)/Thorncrest P.O.Box 60006/Toronto,On/Canada M9A-5G2/To remove mailto:email@example.com
StrategeInvest’s independent consultancy operates as Subodh Kumar & Associates. The views represented are those of the analyst at the date noted. They do not represent investment advice for which the reader should consult their investment and/or tax advisers. Any hyperlinks are for information only and not represented as accurate. E.o.e.
The value of investments may fluctuate up and down in value. Past performance is not necessarily indicative of future results. Our reports and documents may contain forward-looking statements or forecasts. Such forecasts are not a reliable indicator of future performance. Our commentary/analysis is not intended to, and does not, constitute an offer or solicitation to buy and sell securities or engage in any investment activity. Our reports are only for informational purposes with recommendations not made with respect to any particular investor or type of investor globally. Securities, financial instruments or asset strategies mentioned herein may not be suitable for all investors and do not take into account an investor’s particular investment objectives, financial situations or needs. Investors should seek independent financial and or tax advice regarding the suitability and/or appropriateness of making an investment or implementing the investment strategies discussed in our commentary or reports. Our commentaries and reports are as of their publication date with specific information that may no longer be current. There is no intention to update the commentary/report and should not be used to make an investment decision.