Before the U.K.’s Brexit referendum yielded a 52% majority vote for leaving the European Union, there had been rumblings that the U.S. Federal Reserve
would be moving rates higher in the next little while. That appears to be on hold now until the dust settles. Either way, rates in Canada don’t appear to
be going anywhere either. That being the case, the high-quality, actively managed PH&N Total Return Bond Fund remains one of my favorites in the category.
With the growing popularity of so-called “robo-advisors” and “robo-portfolios,” I’m starting to see history repeat itself. So I thought I’d take a closer
look at what’s behind the evolution of this new portfolio product, and try to answer the question: “Is this really anything new and will it perform any better than past automated portfolio solutions”?
It’s hardly surprising that in turbulent times such as these (the latest manifestation of which is the U.K.’s Brexit referendum) people are looking for
some degree of certainty. As private sector pension plans lurch towards extinction, people want reassurance that the money they are saving for retirement
in RRSPs and TFSAs will generate the income they need to live on.
By Mike Keerma
Traders hit the sell button hard on Friday, following a U.K. referendum on Thursday that saw Brits vote 52% in favor of leaving the European Union compared
with 48% who voted to remain. The results apparently took markets by surprise, leading to Friday’s risk-repricing frenzy and a steep one-day selloff not
seen since the financial crisis of 2008. For the week, however, Toronto’s benchmark S&P/TSX Composite Index broke even, while the U.S.
blue-chip S&P 500 Composite Index dropped -1.6%. London’s FTSE 100 Index went countertrend and gained 2% on the week. On Friday, gold surged 4.6% as a direct beneficiary of the global flight
to safety, but leaving it ahead only 1.5% for the week. Crude oil, the other currently newsy commodity, fell -5% on
Friday, putting it -1.0% underwater for the week.
– Following the “leave” Brexit vote yesterday, it seems markets have gone completely nuts. Stocks are down everywhere, and the media commentators’ favorite
word seems to be “chaos.” Should I sell my stocks and stock mutual funds now? Is a major financial crash (like 2008) in the works? – Tony S., Toronto, Ontario