- About us
- Contact us
- FPWM Securities
Happy New Year!Submitted by Foundation Private Wealth Management on January 8th, 2013
… Bungee Jumping Anyone?
We would like to wish everyone a Happy New Year, with good health and prosperity in 2013. In a way, it is nice to have 2012 behind us as much of the uncertainty the markets were facing, especially with elections and “fiscal cliffs”, is now behind us. Also, on December 21st, the date of my son's birthday, I was desperately holding on and happy to report that the world did not end, but I suppose that is obvious since I'm writing this!
I am sure the media is not happy to see 2012 depart as the uncertainty in the markets created exceptional fodder for them. In particular, I found it quite comical that as I was dozing off the night of the US election, the conversation went from Barrack Obama's win and how it would impact the world to this thing called the “fiscal cliff”. All of a sudden, as if the combination of tax increase, spending cuts and a debt ceiling did not exist before the election, the media began its month long onslaught on fiscal cliff. On my iPhone, the CNBC app was even informing me of the movements of various leaders around Washington. For example, “Breaking News: John Boehner Walks to White House”. Clear evidence of media over-hyping a relatively uneventful situation.
Despite the headline news, and there was lots of it, the markets pressed on and fortunately in many respects the opportunities have never been more positive. We have made a call as a firm to overweight our US equity exposure relative to our peers for some fundamental reasons that we shared with you in a blog in October called “The Return to the Mecca Capitalism”. Our thesis for this positioning has not changed, nor do we believe that it will through 2013. Over the next little while I will be preparing a blog that will focus less on the fundamentals of some larger macro themes we are following but more on the micro characteristics of why, again, US equities are still a good buy. For this first posting I wanted to keep it a little lighter, but will share one chart with you.
As I said, the markets did press on in 2012 and below I have included a chart of the S&P 500 index in the US (the blue area) relative to the S&P TSX in Canada (the red line). What is quite apparent is that the US, despite cliffs and elections, certainly did well.
Source: Yahoo Finance
For 2013, which certainly started off with a bang due to the agreement on many components of the “fiscal cliff” issues, we believe things will continue to move forward as the value of high quality equities continues to be realized. However, the markets will likely not be smooth and there are still a number of challenges ahead. It is our firm belief that the challenges are far outweighed by the opportunities!
In an effort to keep things lighter, I have included a couple of non-financial things to look forward to that I have read over the last several days. I hope you enjoy. All the best in 2013!