Well, that rebound was much faster than expected. The stock market is back in bull mode after some good earnings releases over the past few days. Investors expecting the worst from companies like Alphabet & Facebook noted that the ad market slowdown wasn’t as bad. In addition, the companies were buying back stock providing a floor on the prices. So, the largest companies in the world are holding up the market pretty well.
The central bank panic also seems to have taken care of vol spike we saw in March. Vol is now down to the lows-to-mid-30s…and the US Fed after a massive expansion in balance sheet has started reducing the pace. It will be interesting to see what the next move will be from the central bankers as the world is used to getting a new hit everytime the last round of drugs wear off.
From a geographical viewpoint, I am also taking this opportunity to reset my assets and move away from my home country (Canada) bias. With all the economic issues present in Canada, and the added monetary + fiscal stimulus present, I expect Canadian economy & Canadian dollar to not do well over the coming years.
Outlook for May 2020
With the current conditions, I have decided to start deploying capital in the markets. I am still nowhere close to fully invested and will be looking for buying opportunities in coming weeks.
Due to the ongoing bull market in gold, my gold equities have done extremely well over the past few weeks/months. After some profit taking in Kirkland Lake Gold (KL.TO), the former-top holding drops to become my 3rd largest individual stock holding. Recent resurgence in Franco Nevada brings it to the top spot now (although I have no intention of selling FNV as I consider this is a long term hold).
Portfolio as of May 1 2020:
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What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Share with a comment below.
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