Prior to writing this weeks' blog, I read the attached article in the Globe & Mail. Enough said. We are in full agreement with the position articulated here, that the markets rise in the past week is based on a sunny optimism not reflected in corporate earnings. So, while welcome, we are of the view that these gains may prove short-lived as investors come to terms with the reality of lower profits in a slow-growth economy. There will be exceptions to this rule of course, but the overall outlook for stocks is lukewarm at best.
In this environment our portfolio allocations are well positioned and continue to emphasize capital preservation and yield. Capital gains will come eventually, though more likely in the medium to long term.
Click here for link to Globe and Mail article: Market's ebullience at odds with bleak outlook for earnings season