Insurance, Investments and Group Benefits

Although it can be tempting to put your investment goals aside to chase these returns, beware of FOMO, which can introduce an unreasonable level of risk in your portfolio. 

We maintain a positive view of fixed income as it appears rates have peaked, growth trajectories are slowing (making less risky assets relatively more appealing), and yields are starting the year at an attractive level. We believe this could cause the yield curve to re-steepen and lead to less inverted, or even positive, sloping curves.

Market Implications of the Conflict in the Middle East

Tensions in the Middle East have escalated following the attack on Israel on October 7th by Hamas militants from the neighbouring Gaza Strip. The incursion sparked international backlash, and Israel announced a complete siege of Gaza on October 9th. This conflict has led to a considerable death toll on both sides, a hostage crisis involving over 200 Israeli and international citizens and a growing humanitarian crisis in Gaza. 

Understanding the differences and similarities 

Markets move in different directions at different times, generally called cycles. Different market cycles tend to favour one investment style over another. Understanding how growth and value investment styles differ and where they can work together will help demonstrate how they can both play an integral role in your equity portfolio construction.

Recently, we sat down with SVP and CIO, Paul Holba to get his thoughts on the events that have impacted markets year to date, and where the investment team sees opportunity going forward. In this video, Paul shares:

• How almost 73% S&P500’s returns were attributed to the performance of a handful of companies known as the “Magnificent Seven Stocks”.
• The impacts of the aggressive interest rate hikes by Central banks, what investors can expect and how it could affect their portfolios.
• How staying true to an active management strategy may be instrumental in preserving wealth during a global economic slowdown.

In early June, the S&P 500 rose by more than 20% from its October low, reaching its highest level since April of last year. Often observed as a barometer for the overall health of the U.S. economy, the index’s strong performance generated some optimism with respect to the trajectory of the U.S. economy. However, when considering the market breadth, which refers to the number of stocks that are moving the index, a less optimistic picture emerges.

In a recent video, Paul Holba, CIO, reviews the key market events of 2022 and outlook for 2023. He also shares how the team’s investment strategies reflect our cautious view of the environment, but with some positive outlooks and opportunities.

From the desk of CIO Paul Holba: In this latest update from the Empire Life Investments team, Paul Holba discusses how 2022 continues to be a challenging year—but it’s not all bad news.

Market recap

2022 continues to be a challenging year for investors. As mentioned in my July update, the first half of the year produced some of the worst year-to-date returns in decades for many markets. At the end of the third quarter, market returns continued to incrementally trend in the wrong direction (albeit at a slower clip). However, many markets experienced a strong October rally, trimming the year’s losses to varying degrees. Supported by its resource sector orientation, Canadian equities held their value better over other markets, while the growth-oriented Nasdaq Composite continued to lag materially.

From the desk of CIO Paul Holba: In this latest update from the Empire Life Investments team, Paul Holba reviews the key market events impacting 2022 and beyond.

The first half of 2022 was turbulent, with major asset classes suffering from their worst first half of a year in decades. The year began with the world’s uneven emergence from the pandemic and supply chain disruptions affecting the global economy. Russia invaded Ukraine in February, spurring a major geopolitical event that pushed up prices of commodities, including energy and agricultural products. China’s zero-COVID policy has suppressed demand, weakened productivity, and spilled over into global supply chains.

Corrections: What we can learn from the past - May 25, 2022. The Investments team looks at previous market corrections through the decades, the events that followed, and why staying invested through bouts of volatility has proven to be a beneficial strategy for the long-term investor.