Peering out of the foxhole

BlackRock shares this month's Canadian Fixed Income outlook. No one could blame investors for wanting to hunker down and dig in amid the volatility that wracked markets in December. As bad news bombarded equities and flattened the yield curve even further, a year defined by uncertainty descended into fear, and then came to a somewhat ignominious end: the worst in a decade for stocks, and a rocky one for fixed income, too. Shell-shocked as 2018 left markets, this is, after all, a new year, so let’s peep our heads out of the trenches and take a look around. When we do, our (careful) view for 2019 is of a defining battle of perception – between the markets’ fearful forward reconnaissance and th

Market Perspectives: Slowing - but still growing

Elevated trade protectionism marks the greatest downside risk to the global expansion and is a prime driver of heightened macro uncertainty. The U.S. trade conflict with China is at the heart of higher trade tensions. We find that trade tensions have likely served as a drag on risk assets, even though it is unclear if the measures taken so far have hurt global trade activity much. This leaves the global economy in an uneasy equilibrium. Yet amid the uncertainty, the BlackRock G7 Growth GPS points to upside risks relative to the consensus. A major escalation of trade tensions or signs that prolonged tensions are hurting confidence would make us negative on the growth outlook. Highlights Many

Navigating Brexit

Brexit. The word that divides a nation. And by equal measure, also confuses it. Customs unions, single markets, free-trade areas, divorce bills, hard Brexit, soft Brexit, medium-rare Brexit… how should investors react to momentous political events? As a member of Vanguard's European economics team, I have the pleasure of following every twist and turn of this saga, yet even I struggle at times to get to grips with all of its nuances and details. Will Prime Minister Theresa May create an alternative solution to solve the Brexit impasse? What is Jeremy Corbyn's position on Brexit, and will it change if he gets into power? And what about the practicalities – citizens' rights, aviation, customs

Market downturns? Indexing plays a (predictably) passive role

The growth of indexing has been one of the most positive changes for investors in the last 40 years. This simple strategy offers low costs, relative performance predictability and broad diversification. Yet despite indexing's benefits, its growth has sparked debate about its role in a potential market downturn. As the industry's leading proponent of indexing, Vanguard has a decided view on the topic. "We don't know when the next market downturn will occur or its cause, but research shows there has been no link at all between indexing and past downturns," said Jim Rowley, head of active/passive portfolio research at Vanguard. Downturns occurred long before index funds existed A downturn can b

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©2018 by Clement Chung.