October 2023 Update
Oct 30, 2023
Market Update
Here is the recap of the most recent stock market performance.
| Year | Canada | US | Europe | Emerging Markets | World | |
|---|---|---|---|---|---|---|
| 2023 YTD | 4.25% | 13.63% | 8.88% | 4.40% | 12.54% | |
| 2023 Q3 | -1.74% | -3.07% | -2.03% | -1.29% | -2.53% | |
| 2023 Q2 | 1.60% | 8.72% | 2.15% | 1.85% | 7.32% | |
| 2023 Q1 | 4.42% | 7.73% | 8.81% | 3.84% | 7.58% | |
| 2022 | -5.78% | -19.46% | -7.97% | -15.16% | -15.62% | |
| 2021 | 25.79% | 26.97% | 23.32% | 0.14% | 24.71% | |
| 2020 | 4.35% | 21.37% | -1.71% | 19.50% | 14.06% | |
| 2019 | 22.00% | 31.64% | 24.57% | 18.51% | 28.07% | |
| 2018 | -9.04% | -4.50% | -10.02% | -9.73% | -6.86% | |
| 2017 | 9.22% | 21.90% | 13.72% | 31.00% | 19.13% | |
| 2016 | 21.15% | 11.61% | 7.90% | 10.11% | 9.65% | |
| 2015 | -8.36% | 1.32% | 5.45% | -5.40% | 2.65% | |
| 2014 | 11.43% | 13.36% | 5.22% | 5.57% | 10.40% | |
| 2013 | 13.58% | 32.61% | 22.26% | 3.79% | 29.57% |
Source: MSCI gross returns including dividends, all returns in local currency.
The stock market gave up some of its YTD gains in the third quarter as both the US Fed and Bank of Canada raised rates again in July and uncertainty around when rates might stop increasing weighed on sentiment. The Bank of Canada has now kept rates steady for 2 meetings in a row and it seems likely that the US Fed may do the same, though neither is ruling out further potential increases.
Canada’s inflation data moved in the right direction in September, coming in below consensus estimates. More importantly, the Bank of Canada’s preferred measures of core inflation also cooled. Sticky inflation has been a thorn in the Bank of Canada’s side, and a large driver of the additional interest rate hikes delivered back in June and July. Core inflation is still above the Bank’s target, but it’s been moving in the right direction. Of particular note to consumers, food inflation decelerated the most of all major categories. The price of gasoline is still higher relative to a year ago but did moderately on a month-on-month basis.
The world is going through an adjustment period as stock markets – and consumers – are finally beginning to believe the Bank of Canada and US Fed when they say that rates are likely to be higher for longer. This has contributed to short-term volatility, but the investment outlook continues to improve for the medium- to long-term future. Lower prices are not permanent and are often bargains.
For those who are adding to their portfolios, these types of declines should largely be ignored or viewed as buying opportunities.
Other takeaways:
- If you are generating an income, we want to make sure that you have at two to three years of income protection in GICs and high-yield savings accounts, which do not decline in value and allow us to avoid selling investments in times of weak prices.
- We continue to hold a neutral equity mandate. This means we are not overweighting equity nor are we underweighting. The holding is based strictly on your long-term risk tolerance setting (this equity mandate is different for everyone). We have a neutral opinion at this point.
- We continue to believe in diversification and hold a significant portion of the equity allocation outside of Canada.
Lastly, we wanted to highlight that we have a replay of a recent webinar available. The topic is Young Adults & Finances.
If you or someone you know would benefit from a foundational education in personal finance, please send them the link to the replay of the seminar.
This seminar covered the following topics:
- Understanding Obstacles to Success
- Fundamental Financial Concepts
- Important Teaching Opportunities
- Tools to Build Your Finances
As always, I thank you for the trust you put in our firm. If you have any questions about your situation, please do not hesitate to contact us.
Sincerely,
Anne Hammond
BA CIM CFP
Financial Advisor
T 604 732 6551
Planning Team
| Carly O’Connell, BA Client Services Associate Direct: 604-737-6752 [email protected] |
Lorraine Watson Executive Assistant Direct: 604-737-6787 [email protected] |
|---|
Anne Hammond is a Financial Advisor with RGF Integrated Wealth Management. The views expressed are those of the author and not necessarily those of RGF Integrated Wealth Management, which makes no representations as to their completeness or accuracy.
© 2023 RGF Integrated Wealth Management. Ltd., RGF Wealth Management. Ltd., Member – Canadian Investor Protection Fund
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