News & Opinion

We’ve been fielding a number of questions about the gold and precious metals sector recently, more specifically, why we are not buyers on gold? Let’s start there. The price of gold bullion has been exceptionally volatile recently, dropping $250/ounce over a two-day period in mid-April. Bullion has now given up $500/ounce from its highs in September, and is now, technically, in a bear market. Gold equity shares are down 40% year-to-date alone. So what’s up (or down) with gold lately? Gold bullion and precious metal shares have been in profit taking mode for much of 2012 and early 2013.

2 Apr 2013

Frank Mersch Q1 2013

U.S. Stock market leadership remains defensive, suggesting weak economic growth, but a lack of inflation should keep bond yields low. Relative valuation (dividend yield 2.1% for S&P 500 and 3% for the S&P/TSX (TSX) vs U.S. 10-year bond of 1.9%) is still favourable for stocks. Markets peaked in April 2010, 2011, and 2012 followed by corrections of 16%, 18%, and 10%, respectively, on Eurozone flare-ups. However, with strong, widely-recognized recovery in U.S. housing, North American stocks are less likely to offshore exogenous shocks, in our opinion.

1 Apr 2013

Craig Porter Q1 2013 Commentary

With continued headlines of record highs on U.S. stock exchanges in the first quarter, investors may have felt confident in their investments. However, the rally has been very sector specific. The Dow Jones 30 was up over 10% in the first quarter, while the Toronto Stock Exchange (TSX) rose only 2%. The major discrepancy can be explained by the large natural resource weighting on the TSX. Resources make up over 40% of the TSX. During this period, the energy sub-index was flat, golds were down 15%, and metals were down 14%.