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FINANCE
Light Read – Useful and Relevant

Finance

When Good News is Bad News

In January 2023, Canada and the US announced the unemployment data. The US added over 500,000 jobs in January, and the unemployment rate pushed to its lowest rate since 1969. The stock market in the US fell that day. Most people would believe that with better job data, the stock market would continue its rally upward. Why did it have the exact opposite reaction?

The goal of the FED and the central bank of Canada is to slow down the economy, which is why they have raised interest rates. The relation to increasing interest rates means that citizens and businesses will have less money to spend, and more of their budget will go to debt reduction. So additional jobs mean more people are earning an income, and more people will be spending, and therefore inflation will persist.

We have seen this as well when a company gets bad news, but the stock of the company begins an upward trend. They say any publicity is good publicity. So suddenly, the bad news regarding this company now becomes good news for their stock price.

What does this tell us? Well, good news can be bad news, and Bad news can be good news. But most importantly, it is all just “news.” We cannot control it; it’s best we don’t read into it. Instead, we control what we can control. Which is the portfolio you invest in, your saving/spending strategies, and not letting outside forces impact your long-term plans.

John Iaconetti BCom, CFP® Financial Advisor The McClelland Financial Group of Assante Capital Management Ltd.

FINANCE
Light Read – Useful and Relevant

Finance

Being Flexible Can Save You Money and Yield Better Stock Market Returns

Have you ever bought roses on Valentine’s Day? Odds are you paid a premium to buy those roses for your loved one. However, you weren’t the only one. The increased demand and competition for roses on Valentine’s Day drives up the prices. Simple supply and demand.

This concept can be translated to the stock market, more specifically, investments that track specific indices (i.e. index mutual funds or exchange traded funds (“ETF”)). This is because when an investment tracks an index, it has to hold the same companies that are listed on that specific index (i.e. S&P500). When an index announces the companies listed on the index (Index Reconstitution day), there is increased trading for those companies. All of the index mutual funds and ETFs have to sell the companies that are no longer on the index and buy the new companies that are being included.

Increased demand to buy means higher prices for companies to add. Increased selling of companies means an increase in supply of shares and lower prices.

Instead of buying and selling stocks when everyone else is, be flexible in the stocks you buy and when you buy them. For example, if you want to buy General Motors for your portfolio, be open to buying Ford as well. They will have similar characteristics, and can be a good substitution for one another. Being rigid in the stock selection process may cause you to miss other opportunities or force you to buy at inopportune times.

Although Valentine’s Day is a special day for you and your loved one. I’m sure he or she would be just as happy to receive roses on February 21st as well. Your wallet will likely thank you for it too.

Carlo Cansino FMA, FCSI, CFP® Senior Financial Planner The McClelland Financial Group of Assante Capital Management Ltd.

FUN CHARTS
Fun and inventive ways to see interesting ideas!

The Worst Years Ever for a 60/40 Portfolio

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Source: RitHoltz.com

FUN CHARTS
Fun and inventive ways to see interesting ideas!

Mapped: GDP Growth Forecasts by Country, in 2023

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Source: VisualCapitalist.com

THINK SMART
Podcast – Listen to Mike and Rob and their latest thoughts and industry insights

Think Smart

The Greatest Portfolio of All time

Financial Advisors Rob McClelland and Mike Connon discuss a recent in-depth study on the markets and rolling returns from the Advisor publication Horsesmouth. This fascinating study spans five decades. Listen today to find out what the “GOAT” (greatest of all time) portfolios is.

LISTEN TO THE LATEST PODCAST

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