November Market Pulse
Updated: Jan 18
With the calendar drifting into the final few weeks of 2022, many are entering an annual state of self-assessment and preparing for the future. It’s thus timely to lead off this edition by reintroducing our North Star at Pinnacle Sovereign Investments of ACPI, where we are firmly focused on creating and protecting wealth as investors, so you can spend more time enjoying life, now and in the future.
It is a great honour to be entrusted with such an undertaking. As such, we see no value in merely following and regurgitating what other pundits scrape from the top of the market froth. It takes effort to dig deeper to both uncover investment opportunities and expose portfolio threats others do not take the time to see. We prefer channeling our inner Jim Rogers – “The more certain something is, the less likely it is to be profitable” balanced with “The arrogant are blind to the truth” – while working on building and preserving our clients’ investment portfolios.
Keep this in mind as you read each Market Pulse. These commentaries are composed to help you think differently about the opportunities and threats to wealth creation and protection. So, let’s start this month first by taking note of the overall positive direction of the investment markets over the last 30 days, especially in the stock exchanges. After such a gangbuster grind throughout the first three-quarters of the year, it’s uplifting to see more green on the investment board, as you can see on the last page.
Also noteworthy is that many assets posting red returns are ones beneficial to us as consumers in our daily lives. For example, while seeing a dip in oil prices may be disappointing for our investment portfolio, who’s not happier pulling up to the gas pump and seeing lower prices? Or what about wheat? Sure, it’s tough to digest the drop in its price from an investment perspective but then try not to click your heels in delight the next time you see a decline in food prices.
I concede that this is a very small sample size across a very short period of time. The point is that not all investment and financial news needs to be drenched in setback. Let’s face it, with the implosion of the FTX crypto behemoth this month, it takes effort to look at the brighter side. And I surely understand that the possible squalor of the story behind FTX’s demise, it’s not easy to avoid getting wrapped up in loathing for such outcomes. But this points all the more to the need to partnering with an investment manager looking at both sides of the investment sword.
For that reason, it’s prudent to take note of insightful cautionary clues, as by John Mauldin in his November 19th Thoughts from the Frontline(1.).:
“We have the highest inflation in decades, which is making the Federal Reserve tighten interest rates. We don’t know how long that will continue; I think into mid-2023 and maybe beyond if inflation doesn’t drop fast enough.
“This will probably trigger a recession that hits the earnings of companies whose shares are priced for perfection. Meanwhile higher financial costs are making it more expensive to own all kinds of leveraged assets.
“In other words, we already have the conditions for a major repricing of risk. In the same way people trusted FTX with their crypto, they’ve trusted CEOs to deliver strong earnings. They’ve trusted fund managers to buy the right stocks. They’ve trusted central bankers, regulators, and politicians to choose wise policies.”
Should this trigger us to liquidate our entire investment portfolios in fear? Absolutely not. John Mauldin himself is not one to make such suggestions. The overarching essence is we need to be evermore diligent in keeping our senses about us and mindful in who we partner with to build and preserve our wealth. So, if your annual self-assessment has identified a weakness in the management of your investment portfolio, reach out to us for an informal discussion to see how we may be able to better guide your wealth growth.
Wishing you a happy holiday season, Merry Christmas and a 2023 filled with great personal growth!
Adrian Harasymiw Investment Advisor Pinnacle Sovereign Investments of ACPI
P.S. To review the November market numbers or download a PDF copy of this commentary, head over to the Monthly Market Pulse page on our website.