Trends are looking tentatively more positive for risk assets as the New Year kicks off. I will have more to say on this later this week. Highest grade bonds are looking very expensive at this point.
I am scheduled to be on BNN Tues morning Jan 6 at 830 am.
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At what point will you buying stocks if it continues to go higher?
I don't quite understand why someone doesn't like stocks at dow 8,000 but loves them at dow 9500 but I'm trying to figure out your methodology.
I never love or hate stocks. Those are emotions. Our method is entirely based on our objective count of the dominant trend. You need to see a trend for a relevant period of time before you can count it.
I read your book over the holidays. I found it very interesting and would certainly recommend it to others.
It appears to me, that over the last three months, a base has been built in the major markets. Would you agree?
Note, I moved 100% out of stocks in August and September and have begun to incrementally step back in. I plan to wait to and make sure the upward trend is clear before I go much further
Hi Danielle and a Happy New Year!
I wanted to ask what affect will a potential collapse in the US Treasury bond market have on equities?
Thanks!
When there is a resumption of risk appetite then we would see movement away from treasuries and into equities which would be generally more supportive of their prices.
In order for treasuries to become rewarding and attractive again, we would have to see a sell off in their prices, and/or a fall in the US dollar, which would make foreign investors more keen to buy, ie., if they think they will make gains on a later recovery of the U$ again then they are more likely to buy low yielding bonds.
Thanks Danielle,
What is your view of the Canadian bond market? Do you expect the yield to rise as well?
Yes I believe yields will rise in the medium and longer term. This morning Cdn Tbills one year out are yielding less than .90% which is as low as I have ever seen them. I don't see this as an indefinite condition. Although arguably deflation can spur Japan like zero-rates for the next few years. but other than a strategic park in cash or short bills, to wait for other opportunities, yields less than 3% are not a good longer term play.
Hi danielle
You had mentioned cycles before and I believe you had mentioned that we are in a secular upcycle for commodities?
Does that hold true today- do you see the uptrend in commodities continuing? Thanks