Keep connected
Our investment management team is made up of engaged thought leaders. Get their latest commentary and stay informed of their frequent media interviews, all delivered to your inbox.
For most of the past six months stocks have defied the expectations and predictions of strategists and investors, following their collapse in the first quarter of this year. Despite the Covid-19 virus being impact being much worse than almost anyone would’ve imagined (not many predictions that global cases would be rising at a record level of over 400 thousand per day nine months into the pandemic), stocks fought their way to back to their old highs in the U.S., driven by a massive rise in the valuations of all the ‘stay at home’ beneficiaries. This was supplemented by record levels of liquidity provided by central banks and fiscal spending by most governments that sent global debt levels soaring and perhaps some excessive speculative activity from ‘sports-starved’ investors, flush with new stimulus cheques and a little too much excess time. In fact, trading in speculative stocks with low share prices has surged this year, fueled by a huge influx of individuals using zero-commission investing apps and online brokerages. During this spring and summer, more than 25% of the shares traded in the U.S. stock market were in companies with a share price below $5, versus the period from 2012 to 2019, when that percentage mostly hovered between 10% and 15%. (more…)