Category Archives: The Markets

Odette Morin

The Death of Money

death money








A client of mine told me that she recently read the book called “The Death of Money”.  She asked my opinion on it.  She stated that she found the book “frightening”.  This book is a classic example of Doom and Gloom propaganda.  The book describes in detail what central banks do and how they affect currencies and global economies.  I have not read it, but I think it concludes that the central bank’s policies of excessive money supply could lead to outcomes like hyperinflation or devaluation of currencies (thus, “the death of money”).

I am generally weary of any extreme predictions or economic forecast. Doom and gloom and apocalyptic economic predictions have always been around.  I’ve heard it all over the years, the fall of currencies, countries, capitalism, disruptive technologies.  It’s normal investor behaviour to worry about investments and there are a lot of sources that try to pray on those fears, even profit from them.  Just like there are also “euphoric” and “sky is the limit” type economic predictions.

I always remind myself that stock markets have been around for 100+ years.  In the past century we’ve gone through events like the great depression, world wars, civil wars, cold wars, oil crises, financial crashes, rise and fall of emerging market nations, fiscal cliffs, the shift from British Pound to U.S dollar as the world currency reserve, etc…  In spite of all these events, markets are still around.  The financial crash of a 2008-09 was the most significant bear market event since the great depression of the late 20’s.  Six years later, the S&P 500 has not only recovered but is currently trading at record highs.

I also remind myself of the companies that make up the various markets.  Companies like Royal Bank, Telus, Coca Cola, Apple, Canadian National Railway, Fortis, Shopper’s, Amazon, Tim Horton’s, Suncor and so on.  Do we stop talking on cell phones, buying soft drinks and groceries, pumping gas, using bank accounts, drinking coffee, buying goods online, paying heating bills, and requiring medication because of central bank activity? The economic backdrop is important, but it is the ability of a company to make money that drives its stock price.  A bad economy will have a impact, but I do not think we should worry about all major companies disappearing overnight.

I hope this makes sense to you and give you a more rational look at things.

Terry Broaders

Weekly Update March 16 2015

“Truth Is Mighty – Mighty Scarce” -Bob Edwards, Publisher


Energy Sector Hurts The TSX

The S&P/TSX composite index fell 39.23 points on Friday to 14,731.49 as the TSX energy sector dropped 0.55% and oil prices declined for a fourth day with the April contract down $2.21 to $44.84 (U.S.). Oil prices dropped Friday after the International Energy Agency said U.S. oil production was up 115,000 barrels a day in February. The IEA warned that “behind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.”  The drop in oil came as the Canadian dollar fell 0.53 of a U.S. cent to 78.19 cents after falling below the 78-cent level during the morning for the first time since March 2009.  The move followed a report by Statistics Canada that the economy shed 1,000 jobs during the month and the national unemployment rate rose 0.2 of a point to 6.8%. New York markets also tumbled as traders also looked to the U.S. Federal Reserve’s meeting on interest rates next week. The Dow Jones industrials dropped 145.91 points to 17,749.31, the Nasdaq was down 21.53 points to 4,871.76 and the S&P 500 index shed 12.55 points to 2,053.4.


Household Debt Hits New High

The ratio of household debt to disposable income hit a new high in the fourth quarter as incomes increased at a slower pace than consumer borrowing, according to Statistics Canada. The ratio reached 163.3% in the quarter. That means households owed about $1.63 in consumer credit, mortgage, and non-mortgage loans for every dollar of disposable income. BMO chief economist Doug Porter said the increased debt is not surprising given the Bank of Canada’s decision to cut its key interest rate by a quarter of a percentage point in January. However, Porter noted that although debt has been rising, financial assets have too, as stock markets have rebounded and Canadians have been putting more away in their savings accounts. Household net worth rose 0.9% in the fourth quarter. On a per capita basis, household net worth was $233,000 in the fourth quarter.


Blog Links

RRSPS Do Not Have To Be Deducted All At Once


Market Update As Of March 13 2015

The TSX closed at 14732, down -221 points or -1.48% over the past week. YTD the TSX is down -0.15%.

The DOW closed at 17749, down -108 points or -0.60% over the past week. YTD the DOW is down -0.47%.

The S&P closed at 2053, down -18 points or -0.87% over the past week. YTD the S&P is down -0.24%.

The Nasdaq closed at 4872, down -55 points or -1.12% over the past week. YTD the Nasdaq is up 3.07%.

Gold closed at 1156, down -10.00 points or -0.86% over the past week. YTD gold is down -1.37%.

Oil closed at 45.14, down -4.53 points or -9.12% over the past week. YTD oil is down -14.33%.

The USD/CAD closed at 1.278289, up 0.0171 points or 1.36% over the past week. YTD the USD/CAD is up 8.93%.


Sources: Bloomberg; Investment Executive; BMO;

Terry Broaders

Weekly Update March 2 2015

“I Thought I Was Pretty Good Until I Saw Hendrix” -Brian May, Queen Guitarist & Astrophysicist


TSX Declines As Oil Prices Rise

The Toronto stock market pulled back slightly Friday amid soft U.S. economic data despite rising resource and financial stocks. The S&P/TSX composite index closed down 6.82 points at 15,234.34. The Canadian dollar gained 0.15 of a U.S. cent to 79.98 cents. New York indexes were also lower following a report that U.S. gross domestic product grew at an annual rate of 2.2% in the fourth quarter, weaker than the 2.6% first estimated. A bigger surprise was a glum reading on the manufacturing sector in the U.S. Midwest, which fell to a 5 1/2 year low and into contraction territory in February. Analysts says they believe there is something unusual in the Chicago Purchasing Managers Index reading and think it will be treated with skepticism by traders. The Dow Jones industrials lost 81.72 points to 18,132.70, while the Nasdaq gave back 24.36 point to 4,963.53. Oil prices gained $1.59 to US$49.76 a barrel.


Charitable Canadians

The amount of charitable donations reported by tax filers increased in 2013 over the previous year, while the actual number of donors fell 1.0%. Total donations rose 3.5% to $8.6 billion, with gains in every province and territory except the Northwest Territories, where donations were 2.7% lower. The largest increases were in Prince Edward Island +7.5%, Manitoba +6.0% and Alberta +5.9%.

In 2013, 21.9% of all tax filers claimed charitable donations, compared with 22.4% in 2012. Manitoba 25.3%, Prince Edward Island 24.1% and Saskatchewan 23.4% had the highest percentage of tax filers declaring a donation. Nationally, the median donation was $280 in 2013, meaning that half of those claiming a donation gave more than $280, while the other half gave less than $280.  Although Nunavut had proportionately fewer donors than other provinces and territories, it had the highest median charitable donation of $500 among tax filers claiming charitable donations. In descending order here are the median donation amounts for each province and territory: Nunavut $500; Alberta $420; British Columbia $400; Prince Edward Island $400: Manitoba $390; Yukon $390; Saskatchewan $380; Newfoundland & Labrador $350; Northwest Territories $350; Ontario $340; Nova Scotia $320; New Brunswick $310; Quebec $130.


Market Update As Of February 27 2015

The TSX closed at 15234, up 63 points or 0.42% over the past week. YTD the TSX is up 3.25%.

The DOW closed at 18133, down -7 points or -0.04% over the past week. YTD the DOW is up 1.68%.

The S&P closed at 2105, down -5 points or -0.24% over the past week. YTD the S&P is up 2.28%.

The Nasdaq closed at 4964, up 8 points or 0.16% over the past week. YTD the Nasdaq is up 5.01%.

Gold closed at 1215, up 14.00 points or 1.17% over the past week. YTD gold is up 3.67%.

Oil closed at 49.33, down -1.59 points or -3.12% over the past week. YTD oil is down -6.38%.

The USD/CAD closed at 1.251377, down -0.0024 points or -0.19% over the past week. YTD the USD/CAD is up 6.63%.



Sources: Bloomberg; Investment Executive;

Terry Broaders

Weekly Update February 24 2015

“Prejudices Are What Fools Use for Reason” -Francois-Marie Arouet, aka Voltaire


TSX Little Changed As Greece Secures Bailout Extension

The Toronto stock market closed little changed Friday amid relief that Greece and its eurozone partners had agreed to extend by four months the bailout loans that have kept the country afloat. The S&P/TSX composite index declined 8.09 points to 15,172.24. In return for the extension, Greece committed not to pursue any “unilateral” measures that might affect the country’s budget targets. Greece has committed to provide a list of reforms based on its current bailout program for assessment on Monday. The Canadian dollar moved down 0.3 of a U.S. cent to 79.71 cents as Statistics Canada reported retail sales slid 2.1 per cent in December to $42.1 billion, the largest decline since April 2010. New York’s Dow Jones industrials jumped 154.67 points to 18,140.44, the Nasdaq gained 31.27 points to 4,955.97 and the S&P 500 index was up 12.85 points to 2,110.3. Oil prices continued to lose ground on data showing high supply levels in the U.S., down $1.02 to US$50.81 a barrel.


Working Canadians Worried About Running Out of Money in Retirement

More than half of working Canadians are uncertain whether they have the knowledge to plan for retirement, according to a Sun Life Financial Inc poll. While 47% of Canadians surveyed feel they have the knowledge to plan their retirement, 53% are unsure of whether they know enough to plan for their retirement. People have doubts regarding retirement, with 41% feeling they lack sufficient knowledge regarding how much retirement income they will need. Also, 37% are unaware of how taxes will affect their retirement savings and income. Only half of Canadians are able to state how many years of retirement they expect to have. Despite this lack of certainty, only 22% of Canadians have a written financial plan and only 33% work with a financial advisor. More than one-third of working Canadians believe they risk running out of money in retirement, as opposed to one in seven retirees who feel the same.

For the first time since Sun Life Financial began the survey, the number of Canadians who expect to be working full time past the age of 65 has now surpassed those who believe that they will be fully retired. This number has grown over the past seven years as three out of five Canadian workers now expect to work either full time or part time when they retire. When working Canadians were asked the top reason as to why they expect to be working past traditional retirement age, 21% said it was to earn enough money to pay basic living expenses; 18% of Canadians, don’t believe that government pensions will suffice and 16% would like to earn enough money to live well. The survey was conducted by Ipsos Reid between Dec. 5 and 22, 2014. A sample of 3,000 Canadians between the ages of 30 and 65 were interviewed online.


Market Update as of February 20 2015

The TSX closed at 15171, down -99 points or -0.65% over the past week. YTD the TSX is up 2.83%.

The DOW closed at 18140, up 121 points or 0.67% over the past week. YTD the DOW is up 1.72%.

The S&P closed at 2110, up 13 points or 0.62% over the past week. YTD the S&P is up 2.53%.

Terry Broaders

Weekly Update February 17 2015

“I Am a Proud Non-Reader of Books” -Kanye West


TSX Posts Highest Close In Almost 5 Months

The Toronto stock market advanced for a fifth straight session Friday amid data showing solid economic growth in Europe and an unexpectedly strong performance by Canadian manufacturers. The S&P/TSX composite index was ahead 36.29 points to 15,264.81, its highest close in almost five months.  The Canadian dollar rose 0.19 of a cent to 80.25 cents US as Canadian manufacturing sales rose 1.7 per cent in December. That was far higher than the 0.5% reading that economists had expected. New York indexes were positive despite slipping consumer confidence. The University of Michigan’s consumer confidence index came in at 93.6 in February, lower than the 98.5 reading that economists expected.  The Dow Jones industrials was ahead 46.97 points at 18,019,35, the Nasdaq gained 36.23 points to 4,893.84 and the S&P 500 index was up 8.51 points at 2,096.99. The German economy grew by 0.7% in the fourth quarter, much better than the 0.3% increase that had been expected. Overall economic output across the eurozone was 0.3% higher in the quarter compared with the previous three months. That equated with an annualized growth rate of just 1.2%, but still better than the 0.2% increased anticipated by investors.  The TSX found support from the energy sector, up 0.9% as March crude advanced $1.57 to US$52.78 a barrel. The TSX gained 181 points or 1.2% this week, its fourth straight weekly gain.


Worst Ways To Quit a Job

How you quit a job can impact your future career opportunities, finds a new survey by OfficeTeam.  The survey was developed by OfficeTeam, a leading staffing service. It was conducted by an independent research firm and is based on telephone interviews with more than 600 HR managers in the United States and Canada. The vast majority (86%) agreed resigning in an unprofessional manner can either greatly affect or somewhat impact people’s reputations and ability to impress prospective employers. Typically, most people resign by informing their managers and giving notice. However, many of the HR managers surveyed gave examples of employees they’ve dealt with who’ve preferred to leave bigger impressions.

For example, one manager noted an employee once baked and delivered a cake that had her resignation letter written top, while another recalled one staffer who hired a marching band to accompany him as he announced he was quitting. One worker threw a cup of coffee and walked out.  In some cases, employees preferred to go more quietly by relying on email, text or Facebook messages. And in one case, an HR manager recalled receiving a Post-It note from a departing staffer. Whichever way you choose to quit a job, your goal should always be to make sure you’re leaving on the best terms possible, says Robert Hosking, executive director of OfficeTeam. “Doing a great job when you start a new role is expected, but doing a great job as you leave can cement your reputation” as a professional. He adds, “It’s best to schedule a meeting with your manager to discuss your resignation, and give notice.” It’s also key to keep conversations positive and offer to train your replacement if possible.



When To Avoid an RRSP

Main Reasons Markets Are Volatile


Market Update As Of February 13 2015

The TSX closed at 15270, up 186 points or 1.23% over the past week. YTD the TSX is up 3.50%.

The DOW closed at 18019, up 195 points or 1.09% over the past week. YTD the DOW is up 1.04%.

The S&P closed at 2097, up 41 points or 1.99% over the past week. YTD the S&P is up 1.90%.

The Nasdaq closed at 4894, up 150 points or 3.16% over the past week. YTD the Nasdaq is up 3.53%.

Gold closed at 1228, down -6.00 points or -0.49% over the past week. YTD gold is up 4.78%.

Oil closed at 52.74, up 0.70 points or 1.35% over the past week. YTD oil is up 0.09%.

The USD/CAD closed at 1.246032, down -0.0065 points or -0.52% over the past week. YTD the USD/CAD is up 6.18%.


Sources: Bloomberg; Investment Executive;; Office Team

Odette Morin

Three main reasons why Markets are volatile

  1. The end of QE in the U.S is in sight. So it’s natural to expect some volatility as this unfolds gradually.
  2. The price of oil dropped unexpectedly in a big way. When unexpected events occur, the markets react.  The price of oil is expected to come back to the more normal level of $80 a barrel within a few quarters.
  3. Global Growth is slowing.  We have seen tremendous growth in the past 3 years following the financial crisis. The recovering economies are still expected to grow but at a more moderate level.  Any type of slow down affects the markets.

Always remember that equity investment returns are closely tied to corporate earnings growth and the price you pay for those earnings. Historically, over the long term corporate earnings have been fairly stable and have grown along with productivity gains and inflation. Stock valuations though are more volatile than earnings since they are influenced by investor sentiment, which swings between optimism and pessimism. Learn to live with market volatility by focusing on your investment earnings yield instead of your investment market value.