Justwealth Justwealth
  • About Justwealth
    • Who We Are
    • How It Works
    • Investment Process
    • Why Justwealth
  • Institutional
    • Overview
    • Advisor Portal
  • Pricing
  • Resources
    • Performance
    • FAQs
    • Portfolio Review
    • Blog
    • The Just Word Podcast
  • Get Started
  • Account Access
    • **New** Client Portal
    • Finish Your Application
    • Advisor Login
    • Ndex Investor Login
Justwealth Justwealth
  • About Justwealth
    • Who We Are
    • How It Works
    • Investment Process
    • Why Justwealth
  • Institutional
    • Overview
    • Advisor Portal
  • Pricing
  • Resources
    • Performance
    • FAQs
    • Portfolio Review
    • Blog
    • The Just Word Podcast
  • Get Started
  • Account Access
    • **New** Client Portal
    • Finish Your Application
    • Advisor Login
    • Ndex Investor Login
Jul 14

Justwealth 2nd Quarter 2021 Market Commentary

  • July 14, 2021
  • Exchange Traded Funds, Investing, Portfolio Management, Robo-Advisor

On the strength of generally positive news headlines, improving economic data and some very strong earnings announcements, financial markets responded with exceptional returns in the second quarter. Canadian equities were a leader, powered by a steep rise in commodity prices which led to a quarterly gain for the S&P/TSX Composite of 8.54%. Foreign markets also performed abnormally well with the S&P 500 advancing by 6.95% and the MSCI EAFE Index rising by 3.62%. After a sharp Q1 decline, bonds rebounded in the second quarter rising by 1.66%.

Global new daily cases of Covid-19 have dropped sharply from the peak set in the spring of 2021 prompting many to ask the question: Is the “return to normal” finally underway? While we would like to provide an optimistic opinion on the subject, the fact is that we do not know with certainty, nor do politicians, central bankers, or even public health officials. As always, we stress to our investors that it is important to stay focused on long-term outcomes, and not get distracted by short-term events whose impacts will eventually become marginalized (speaking from a purely financial perspective).

What we do know with certainty is that financial conditions are still very accommodative, fiscal stimulus is still being implemented, and economic data confirms significant positive momentum. Indeed, some observers would be quick to point out that inflation, specifically, is reaching uncomfortably high levels. Both Canadian and U.S. central banks, however, have been proactively commenting that this was to be expected given the weak year-over-year comparisons and that it should be considered transitory. These conditions are not likely to last forever, but as long as they persist, we believe that it will continue to be supportive for equity prices.

One potentially serious consequence of favourable market conditions, like we have seen over the past year, is that it may change investors’ perceptions of investing reality. It is difficult for an investor to recognize mistakes or fully appreciate risk when everything is going up. Psychology is one of the most powerful factors in affecting investor returns, and complacency or over-confidence can have a pronounced adverse impact. There is evidence to suggest that there may be bubbles forming in certain assets, notably crypto currencies and meme stocks such as AMC or Gamestop, reminiscent of the late 90’s tech bubble. We caution investors to avoid speculating in such assets as the outcomes when bubbles burst can be devastating. Furthermore, we would encourage every client to listen to our recent podcast featuring Lisa Kramer, a University of Toronto Professor (Episode 12), discussing some very relevant aspects of behavioural finance.

Stay safe and enjoy the summer!

Here is a recap of market performance as of June 30, 2021*

Asset Class Market Index Quarter 1 Year 3 Years 5 Years 10 Years
Fixed Income FTSE TMX Canada Universe Bond 1.66% -2.43% 4.16% 2.64% 3.90%
Canadian Equity S&P/TSX Capped Composite 8.54 33.85 10.80 10.77 7.44
U.S. Equity S&P 500 ($Cdn) 6.95 28.01 16.31 16.53 17.74
Int’l Equity MSCI EAFE ($Cdn) 3.62 20.33 6.11 9.23 8.56

* Performance annualized for periods greater than 1 year

  • Facebook
  • Twitter
  • LinkedIn
  • E-Mail

Comments are closed.

The Just Word Blog

We would love to hear your feedback and suggestions! Feel free to contact us at the information below

Subscribe to our mailing list

Contact Info

Phone: 1.866.407.JUST E-Mail: info@justwealth.com

Recent Posts

  • Justwealth 4Q 2022 Market Commentary
  • Justwealth 3Q 2022 Market Commentary
  • Justwealth 2Q 2022 Market Commentary
  • Justwealth May Market Update
  • Justwealth 1Q 2022 Market Commentary

Categories

  • Behavioural Finance
  • Business
  • CESG
  • Charitable Donations
  • CRM2
  • Estate Planning
  • Exchange Traded Funds
  • Health
  • Investing
  • Just thinking
  • Lifestyle
  • Mutual Funds
  • News
  • Portfolio Management
  • RESP
  • Retirement
  • Robo-Advisor
  • RRSP
  • Sports
  • Taxation
  • TFSA
  • Travel

About Us

  • Who We Are
  • How It Works
  • Investment Process
  • Why Justwealth
  • Pricing


Resources

  • Get Started
  • Investor Login
  • Advisor Login
  • Account Requests
  • RESP
  • Tax-Efficient Investing
  • Group RRSP & TFSA
  • Portfolio Review
  • Blog Posts
  • The Just Word Podcast
  • FAQs
  • Performance

Institutional

  • Overview
  • Advisor Portal

Legal

  • Terms of use
  • Privacy Policy
  • Conflicts Disclosure

Contact

18 King Street East, Suite 1400 Toronto, Ontario M5C 1C4 Phone: 1-866-407-JUST (5878) E-Mail: info@justwealth.com

Subscribe to our mailing list



Justwealth Financial Inc., operating as Justwealth, is a registered Portfolio Manager in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador and Yukon. By using this website, you accept our Terms of Use and Privacy Policy. Copyright 2023 Justwealth Financial Inc. All rights reserved.