Bruised investors had the week to heal, or at least lick their wounds. Stock markets had a very solid week thanks to some ‘hope’ offered by central bankers in the U.S.. Equity investors are looking to the day when central bankers pivot – coast on rate hikes and then start a period of rate cuts. Bond markets continued to take a hit last week thanks to sticky inflation reports and the fear of ongoing rate hikes. Inflation is still driving the bus. Stock and bond markets were sending different signals last week. Investors get a week to recover, plus the Sunday Reads.
Here’s my post from yesterday as investors hope and pray for a rate hike hiatus. In the post you’ll find the stock and bonds returns for the week, inflation reports and commentary and what we might be in store for, for the next decade or two.
Central bankers around the world are hoping for (OK perhaps more praying/places of worship are busy again) a soft economic landing. That is, kill inflation without a double homicide – also killing the economy.
The sector performance update – U.S. market.
The Sunday Reads
At My Own Advisor and on The Weekend Reads, Marks tells us that there is an alternative to stocks as we move from TINA (There Is No Alternative) to TARA (There Are Reasonable Alternatives). In a recent Sunday post, Paying An Advisor To Count Your Dividends, I had linked to a Michael Lebowitz tweet offering BAAA –
- Bonds
- Are
- An
- Alternative
Yes, stocks are getting some competition, even from savings and GICs. I’ve updated my EQ Bank post. Savings account rates are now 2.5% and GICs top out at 4.7%.
Make your cash work a lot harder at EQ Bank.
Of course, savings are not designed for growth, but at least now we can get some decent rates for our short term funds. That’s useful for our emergency fund, for retirees, and for investors who have a lower tolerance for risk. Cash and bonds are starting to pay up.
Cash vs bonds
Stay tuned for a Mark and Dale co-production post – Cash vs Bonds.
Teaser …
Dividend Hawk brings the stock stories and blog posts of the week. Earnings season is underway and it will pick up the pace next week.
And while we’re at the week in review posts, here’s the greatest hits Volume 41 at Banker on Fire. In that mix, what happens to bonds when rates rise, from Monevator. And, the truth about early retirement from Accidentally Retired.
And from stocktrades.ca, the top renewable and green energy stocks in Canada for 2022 and beyond.
From Charlie Billelo ( a must follow), the potential rate path in the U.S.
The pivot before the bear
Historically, bear markets occurred after the Fed pivot (a move to rate cuts). Of course market timing is impossible. But if history repeats, perhaps even better prices are on their way, and bonds will do what they always do – go up in price in a recession.
On Findependence Hub, Fred Vettese suggests that high inflation changes the calculus on delaying CPP to age 70. I turn 60 next week, and I will apply to take early CPP. If I need the money, it’s a good call, and if I don’t need the money and can invest the CPP money, it’s an even better call.
Investing with very small amounts
Here’s a good post on Million Dollar Journey, how do you get started when you don’t have much to invest? We all know that time is your best friend when it comes to investing, given the magic of compounding. You can certainly set up a Wealthsimple account and trade Canadian ETFs at no cost. Investors might look to an all-in-one asset allocation ETF. Just add money on a regular schedule. Stay away from U.S. stocks and ETFs at Wealthsimple as the fees would be near 4% on a tw0-way buy and sell trade.
Another simple option is the wonderful Tangerine Portfolios, you can set up an automatic investment plan (into managed portfolios). There are no fees for when you buy or sell. The portfolio management fees are very reasonable. Investment advisors are available when you need help.
Do we have enough to retire in 2023
And here’s a provocative post on Tawcan, Bob wonders if they have enough to retire in 2023. On Twitter, I offered up that he might build a very sizable buffer.
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It’s going to be one hell of a ride the next 12-18 months. But I’m hopeful! In the meantime, I plan tomorrow spend as much time with family as possible.
Let’s never let a bear market go to waste.
Sam
Thanks for that and yes, we need to stay the course and take advantage of bear markets in the accumulation stage. There are opportunities for those preparing for retirement as well.
Thanks for stopping by 🙂