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Market Review November 2012

November 25, 2012

Equity markets are not that easy to kill…

In Summary: The European debt crisis, going off a fiscal cliff, an economic slowdown in China, and US election uncertainty has yet to stop the world equity markets from marching higher proving one more time that they are just simply not that easy to kill. Believe it or not but the world equity markets in Canadian dollars are up a solid ten per cent in 2012.
We submit to you that equity markets, with their attractive dividend yields and valuations, are poised for much higher valuations in years to come as mankind in its usual way continues to muddle through its issues and resolve them over time.

We have seen this movie many times in the past: We have often talked of how equity markets march upward in spite of the numerous issues the world faces. We would like to point out that the reason this happens is that equity markets in general represent the upward march of global economies. You are familiar with the phrase that life goes on. This is very true in economics, and global economies keep moving on. Even now, in spite of issues around the world, we note that global economies are indeed growing as a whole, the business world getting larger and therefore equity markets are moving higher.

History at a glance: Those who are predicting the death of the equity markets need to have just one look at the history and they will realize that equity markets are just not that easy to kill. Here is the US market since 1926; just see for yourself how $1 became $2,982 in spite of the numerous issues along the way, including recessions, world wars, political uncertainty, surprise election results, lame duck sessions, presidential assassinations, impeachments etc:

composite - June 30, 2014

What we are doing: We always write about what we are doing with our own money. We are fully invested and continue to add to our holdings in high quality growth companies. We advise you do the same. As usual, if you need to discuss any aspect of investing, please do not hesitate to call us or write to us.

General Market Commentary, Uncategorized


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