The Living Market Podcast

How equities help fight inflation

Inflation increased slightly in May, to 2.9%. Not only is this disappointing, but it also suggests that it will be a long road ahead to getting inflation down to 2%, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. He explains why bonds are not the answer to counteracting the effects of inflation, and how, historically, equities have been effective in growing your money’s value when inflation is high.

Has the market gone too far, too fast?

While U.S. equities are flirting with all-time highs, there is some concern that they may be hitting a peak, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. Has the market gone too far, too fast? Philip outlines the telltale signs to watch out for that typically signal when a bull market is running out of steam. These include the yield curve, manufacturing activity, employment levels and stock price value. He also answers the question: is it better to sell early or late when the market is peaking?

Optimistically cautious: our look ahead

Macroeconomic data is mixed across the board, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. Consumer spending is inconsistent, and unemployment is rising, yet company earnings are still growing. Philip discusses the kinds of companies and sectors that are likely to do well in this environment and makes suggestions for how you can help make sure your portfolio is well-positioned for what’s in store.

After the first rate cut, what’s next?

This week, the Bank of Canada finally announced a cut in its key interest rate (by a quarter of a percentage point) to 4.75%. IG Wealth Management’s Chief Investment Strategist, Philip Petursson says that, while this is a good start, it will take more than one small rate cut to make any significant difference to the economy. He explores what still needs to be done, what we can expect in the coming months and what this will mean for the loonie.

How passive investing causes overvaluations

Value strategies are key to active investment management, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. They require analyzing a company’s financial information, assessing future growth potential and coming up with a value based on its capitalization rate (its net operating income divided by its current market value). However, passive investing, in the form of ETFs, simply buys company shares based on the company’s value relative to the overall market. Philip explains how this is causing overvalued companies to become even more overvalued.

How copper and the economy are entwined

Copper has an intriguing ability to predict the economy’s health, says IG Wealth Management’s Ashish Utarid, Assistant Vice-President, Investment Strategy. Thanks to its widespread use in many manufacturing activities, an increase in demand for copper often signals a growing economy. Conversely, a slowing economy usually leads to lower copper prices. Ashish explains the reasons behind copper’s recent 20% growth, and what that means for the economy in general.

Spring clean your financial plan

With taxes now filed and RRSP contributions made, May is the ideal time to revisit and refresh your financial plan, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. In this special edition of the podcast, Philip and his special guest, IG’s Aurèle Courcelles, Assistant Vice-President, Tax and Estate Planning, discuss what investors should be focusing on right now. They talk about the possible implications of the recent budget’s capital gains tax, how to improve your estate planning and ways to modify your portfolio and its asset allocation, given the current market opportunities.

How U.S. elections impact the markets

The markets are often affected by seasonal factors that are understandable and predictable, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. Retail activity is always strong in December, and there’s typically far more travel over the summer months. A similarly predictable but less understood market phenomenon, however, is the way that U.S. equity markets perform in the summer leading up to a U.S. presidential election. Philip explains why you might not want to sell during these months.

Will early rate cuts boost inflation?

Both Wall Street and the White House are keen to see interest rate cuts this year, at the very least before the November election, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. Recent weak consumer spending might force the U.S. Federal Reserve’s (the Fed) hand, leading to rate cuts sooner rather than later. However, as Philip explains, while earlier rate cuts could be good news for the markets, they could bring about higher inflation. And is the Fed willing to risk that?

Is optimism a cause for concern?

Contrarian indicators can often play a crucial role in forecasting market trends, says IG Wealth Management’s Chief Investment Strategist, Philip Petursson. Last year, during peak economic pessimism, markets anticipated up to six interest rate cuts for this year, and those forecasts bolstered the markets. Now that we’re in a period of greater economic optimism, will that have a negative impact on the markets?