Financial Letter – Oct 2016


Jacques Maurice

At the beginning of the year, my Financial Letter referred primarily to the poor performance of preferred shares in 2015. This led me to forecast that 2016 would bring a notable increase. I want to bring your attention to “annex 1” showing the evolution of the preferred shares’ index since the beginning of March, compared to the Toronto and New York indexes. The “reset” preferred shares should also continue their positive performance since their market value is directly linked to the increase of the interest rates of the Government of Canada 5 year bonds. Scotiabank predicts an increase of these yields from 0.62% presently to 1.25% in a year (annex 2).

Finally, with the upcoming US presidential election, you will find enclosed a chart, which I found interesting, comparing the growth of the stock market indexes and that of the gross domestic product during a Republican and a Democratic administration (annex 3).

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