Global Insight Monthly - October 2022
I am pleased to share the latest investment strategy report from RBC Wealth Management—Global Insight, which provides our latest thoughts on asset classes, the economy, and timely issues that impact investment strategy. This month’s topics include:
Global equity
A dose of perspective - Equity markets have become so deeply oversold over the course of the last nine months that some near-term relief is probably not far off. However, more market turmoil could be expected next year if further Fed tightening were to push the U.S. economy into recession. We regard an equity exposure of Market Weight as appropriate for a global balanced portfolio.
Global fixed income
It's the destination, not the journey - As central banks press the accelerator on their journey to higher rates, the ultimate destination remains elusive as markets wonder just how high rates will go.
U.S. recession scorecard
Growing likelihood of recession - Three of our seven leading indicators of a U.S. recession remain at levels that signal an economic downturn is likely to get underway by the middle of next year, while the other four are at various stages with most moving from strong to weaker. The likelihood of a recession beginning by mid-2023 is growing.
Solar energy
Here comes the sun - A cheap and emissions-free technology, we shine a light on solar’s potential and how investors can look to tap into this growth opportunity.
Video replay: The economy is slowing…now what
2022 has been a challenging year for investors, with major global markets entering bear market territory or suffering sharp corrections over the last several months. Key underpinnings to the market’s performance – from monetary and fiscal policy, to inflation and the strength and sustainability of corporate profits – have all shifted dramatically recently and led many investors to question what’s next for the economy and what the impact may be on their portfolios.
This timely presentation includes a board overview and outlook for both the US and Canadian markets, and key items to consider moving forward.
Watch Here> (39mins)
Global Fixed Income Markets
The bond market is challenging investors in ways it hasn’t for at least a decade. One of the big questions on bond investors’ minds: Is 3.5% the top yield for the current cycle?
Market Volatility: What to do when markets are volatile
Market volatility is an inevitable part of investing. Geopolitical events, like the invasion of Ukraine, inflationary pressures and changes in interest rates are some of the many reasons that cause markets to fluctuate, sometimes drastically.
When markets shift, particularly when they drop quickly, it can be hard not to react. But history shows you will more likely achieve your long-term investment goals if you have a plan and stick to it through all types of market conditions. This may sound easy, but investors have been put to the test in recent times. Veering off course from a carefully thought-out plan can have long-reaching consequences. It can turn a temporary loss of confidence into a realized loss on an investment portfolio.
Please visit the following link for strategies, historical context, and additional reference points on dealing with periods of market volatility.
Financial Literacy: Financial Abuse: Five common signs
For aging Canadians who've spent a lifetime accumulating wealth to support their retirement, it can be a shock to learn that someone close to them has been trying to take advantage of them. It's also something that's increasingly prevalent in an era where older adults are a rapidly growing segment of society.
According to census data from April 2022, the number of Canadians aged 65 and older increased by 18 percent between 2016 and 2021, the second largest increase in 75 years.
With some studies showing close to half of older adults have experienced some sort of abuse, it's important for them, together with close friends and family members, to be aware of the warning signs of abuse and what they can do to prevent it.
This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. © 2022 RBC Dominion Securities Inc. All rights reserved.