Now that June and half the year is “in-the-books”, let’s assess and then marvel as to what has transpired in just six short months.
Year-to-date, as of June 30th, the Canadian (S&P/TSX) market has returned ↑3.97%; the S&P500 ↑15.91% and the Nasdaq, a whopping ↑31.73%. The latter had a pretty dismal 2022, so it has now pretty much erased those losses. And before anyone thinks that Canada is severely lagging, this is only six months, so if you annualize that figure, it looks very healthy.
The big tech names have contributed greatly to the returns in the US (and to a smaller degree here). As of this writing, the rally has broadened to semiconductors, automakers, homebuilders and hardware companies.
There’s no doubt higher interest rates are having the desired effect in bringing inflation down, but this has also put pressure on those holdings in our portfolio that are interest-rate sensitive. This would include banks, real estate trusts and even utilities. The way I see it, this is a great time to be adding into these areas, where we have room.
If one were to assess 2023 so far based on the headlines, you’d think we were having another “bad” year. Just a few short months ago, four U.S. banks fell, including one in Europe. The headlines also focused heavily on the debt ceiling drama in the US, which took some time to play out. But, you don’t have to look too far for lots of good news, so I guess you just have to ask yourself, what will you chose to focus on?
While it is widely expected we’ll see another rate hike or two, this shouldn’t deter individuals from sticking to a longer-term game plan. Many clients have taken advantage of the much higher GIC and money market rates, which has been comforting for a number of them.
If you’re reading this and you’re not yet a client, feel free to contact us at 416-842-4235 to set up a meeting/call. I’m happy to provide an assessment regarding your current situation. If you are already a client (thank you!) and remember, I’m always interested in meeting new people in order to assist them in navigating through this complicated world of portfolio management.
Have a great summer!
Libby
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