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Duncan Stewart: What investors should be thinking about now

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto

For global stock markets the month of March 2009 was the best in 30 years. So far in April that rally is continuing. It is too early to tell if this is yet another bear market “suckers rally” or if it is the real deal and the beginning of the next bull market.

My guess is that although ongoing rotten economic news may cause some more stock market jolts, by this October we will be into the next up cycle. If I am right, what should Canadian investors be thinking about now?

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Duncan Stewart: Sometimes business 'news' really doesn't amount to much

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto


There is an old investing rule that you should never buy or sell a stock based on what you read in the newspaper. That’s not a dig at newspaper reporting, it just reflects the reality that by the time a story appears in print the information it contains is almost always already incorporated into the share price.

But we are all human, and it’s tough to read an article and not sometimes feel like you absolutely have to make an investment decision.

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Duncan Stewart: Maxing RRSP contribution might not be best strategy this year

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto:

It is almost March, and that makes me think of two things. As a financial analyst I am reminded that it is the deadline for RSP contributions for Canadians, and as a husband I am reminded of the trip I took to France with my wife last year. Those may seem like disconnected topics, but bear with me.

If, due to the recession, your income is well below the top marginal tax rate or if you have outstanding and expensive debt, then maxing out your RSP contribution might not be the best financial strategy this year - even if stock markets are “cheap.”

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Duncan Stewart: Beware inflation

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto

As stock markets remain turbulent, many Canadian investors have piled into fixed income securities, mainly bonds and bond funds. They have been relatively safe havens for the last six months - but what if that changes all of a sudden?

Some of the smartest folks I know on Bay Street - many of whom correctly predicted the current crisis - are getting deeply worried about inflation.

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Duncan Stewart: Tech titans not necessarily a safe bet for investors

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto

It was JFK who said that “a rising tide lifts all boats.” Is the opposite true - will a global recession of historical depth negatively affect all companies with no exceptions?

Bay Street, Wall Street and retail investors are asking this question after seeing earning reports from tech titans that make it appear that at least some companies may have been able to “dodge a bullet.”

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Duncan Stewart: Do investment portfolios still need technology stocks?

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto

Most of us use and need technology every day of our lives. But do our investment portfolios need it?

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Duncan Stewart: Don't expect market volatility to calm just yet

By Duncan Stewart, president of Duncan Stewart Consulting in Toronto

Now that stock markets are off almost 50 per cent from their highs, the most frequent question I am being asked is “are we at the bottom yet?”

As I’ve said before, it’s almost impossible to call the exact bottom, and most investors shouldn’t even try. If your RSP is 100 per cent in cash today, I think you should put at least half of it into action at these levels - the risk of being out of the market is almost certainly higher than the risk of further losses over the medium term.

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Duncan Stewart: Should your savings be in U.S. or Canadian funds?

By Duncan Stewart, president of Duncan Stewart Asset Management in Toronto

In the last six months, stock markets and the Canadian dollar are down a lot. But what a lot of investors forget is that market returns and currency swings both affect our investment portfolios.

For example, let’s look at two Canadian 50-year-olds from Timmins, Ont., each with a $100,000 RSP. One is invested only in Canadian stocks and the other only in U.S. stocks.

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Duncan Stewart: Lies, damn lies and statistics

Money Talks is a daily business column from CBC radio.

It was Mark Twain who said “There are three kinds of lies: lies, damn lies and statistics.” In the last week I have seen a two particularly worrying uses of statistics that are being used to convince investors that now is the time to buy.

One asserts that the historical data suggest that stock markets tend to do better when a Democrat is elected President. If true, this is obviously great news given Barack Obama’s convincing victory.

The other is that the “average bear market” only lasts about 18 months and goes down about 40 per cent. And based on that statistic, the October meltdown was the low and investors should start buying.

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Duncan Stewart: Investing once the market stabilizes

Money Talks is a daily business column from CBC radio.

By Duncan Stewart, president of Duncan Stewart Asset Management in Toronto

As I write this column, global stock markets were taking yet another tumble. It was “only” about 3 per cent, which isn’t much compared to what we have seen over the last few weeks. But it is enough to make investors worry that we haven’t seen the bottom yet.

Now it is almost impossible for anyone to reliably predict when the market will turn - so I’m not even going to try. But I do have an idea for what average Canadians might want to do when markets eventually stabilize.

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