Outlook for October 2017

The stock markets continue hitting all-time highs. The party continues on even as most investors agree that the valuations are stretched. It is interesting that valuations don’t seem to matter as most “pundits” keep throwing phrases around like — “Yes, valuations are stretched, but stocks will double from here”.  The hubris is not just with the commentators. We have Fed chair saying — “No more financial crisis in our lifetime” and executives like American Airlines CEO saying “We will never lose money again”. Pure madness! 

Outlook for October 2017

I continue to wait for the fat pitches except for putting money into index funds and more specifically in the resource sector. The commodity market is at a record low compared to the rest of the stock market when compared over previous cycles, giving me more confidence to go contrarian. The following chart originally shared by Jesse Felder illustrates how relatively cheap investing in commodities is (read: its never been cheaper comparatively speaking).

To put that into perspective, here’s the global stock market value @ $84.8T, highest level in history ringing in at approx 110% of world GDP.

As regular readers may have observed, I have been researching and started playing with a bit of capital in digital assets. Its a new asset class, even though a lot of old school investors may disagree. I think the digital asset class is only going to grow going forward as a new industry is formed in the tech sector. I continue to learn and deploy some of my capital in the space. Stay tuned for more posts coming on that front on this blog.

Looking for some investment ideas? Be sure to check out the Top 2017 Investment Picks from the blogging community.

Our current portfolio looks like this:

As it stands, our portfolio diversification is as shown below.

What is your outlook for October 2017? What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist? What do you think of the current market levels and buying here? Make sure to leave a comment below.

Disclosure: Our full list of holdings is available here.

6 thoughts on “Outlook for October 2017

  1. R2R, Thanks for the outlook and your thoughts. Agree that the commodity markets and some of the basic materials and precious metals stocks have under performed on a relative basis. They may be one of the better areas for new money. For me personally, their cyclical nature does not always mesh well with my dividend growth investment strategy. I have tended to underweight the sector. Not sure if that’s right, just the way I have approached it.

    • Hi Tom,
      You are right in your statement that the industry is very cyclical, so if you are looking for miners to hold through for the next 30 years, there are only a handful that can make sense and even then, there are constraints outside their control that dictate their future. From that aspect, you might want to look into streaming and royalty companies like FNV, WPM etc. FNV for e.g., does not have to do anything and just sit on their hands for the next 30 years and they can still be cash flow positive and pay their increasing dividends year over year due to the type of deals they have in place.

      Something to consider.

      cheers
      R2R

    • I keep adding a few shares everytime theres a pullback in the shares…..Ive also been writing some covered call options successfully on them so far. its been trading in a pretty tight range due to the overhanging CRA issue.

      Hopefully its resolved soon.
      R2R

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