K96.4 FM Radio Spot

Black Friday was good in the US as consumers increased spending from last year and now CYBER MONDAY numbers are in and they show a 15% increase to break $1.1 billion dollars in online purchases yesterday….looks like consumer confidence is back in the US….assume that’s important in the economy there and in Canada…

At the risk of sounding like Cliff Claven, Cyber Monday is only a year old in Canada but the term was coined 5 years ago to describe the Monday after Thanksgiving, when US consumers go back to work and shop for gifts on thier computers. E-tailors are launching encore Tuesday to extend the deals and I think tomnorrow will be Wake up call Wednesday. A couple on take aways from all this are 1. with the Canadian dollar @parity with the US, crossborder shopping is rising. 2. Online sales rose 15% but that is skewed towards electronics or tech toys. Although consumer confidence is rising it appears to be on the smaller ticket items. In addition housing number were bad in the US and growth number came in lower than expected in Canada so slow growth.

Radio Rallie & Reversals

The Canadian economy grew at the slowest annual pace since the recession between July and September, held back by a currency-fuelled decline in exports and a drop in housing investment even as overall consumer spending stayed relatively steady.

The 1-per-cent rate of expansion – reported Tuesday by Statistics Canada – followed a 2.3-per-cent clip during the second quarter, reinforcing that a recovery which earlier this year was the envy of the Group of Seven nations has given way to a long stretch of underwhelming growth that could last for years.

The third-quarter reading compares with the 1.4-1.5-per cent growth rate expected by most economists, and was well below Bank of Canada Governor Mark Carney’s estimate of 1.6 per cent annual growth for the three-month period.

GB

Radio Rallies & Reversals

Here's the economic line-up for this week:

On Wednesday we get the ADP Employment report in the US along with productivity, manufacturing, and the Fed Beige Book;

On Thursday we have US pending home sales, and in the EU we'll get some GDP numbers as well as the ECB's monetary policy announcement;

And finally on Friday we'll get government numbers on employment in both the US and Canada.

Why is the time from US Thanksgiving through Christmas so important? This is the time when consumers usually open up their wallets, and it's this spending that kicks starts the US economy, and the global economy for that matter, into the new year. This is the time that retailers move into the black, hence Thanksgiving 'Black Friday'.

GB

1150 AM Radio Spot

Today is Black Friday in the U.S.; the day after Thanksgiving and the official start to the Christmas shopping season which traditionally marked the first day that retailers’ business turned into the black, i.e. profitable. The U.S. market will be open for trading but is closing early at 1:00pm. We can expect another low volume day as many market participants have taken a four day weekend. There will be no major economic releases in the U.S. or Canada until next week, and corporate news is likely to be minimal as well.The TSX is currently in the negative unable to hold thru 13,000 and US markets are all lower too. The Dow down over 1/2 %. the Canadian dollar is trading at about 98 cents.

96.3FM Radio Spot

When I had my first of 4 children my father said to me “You will need to save $17,000 a year for each year, each child goes to university. Ridiculous I thought and time would prove my Dad wrong…it cost more! Now four children later at $17k a year …of after tax dollars I’m thinking a little planning, long, long ago would have been a good thing. These big ticket items need a lot of planning and forethought or they will ‘gut’ any savings you have…

I did a little research and discovered a couple of insights. 1. Over 60% of the highest income earners in Canada had some post secondary education and conversely over 60% of the lowest income earners had no more than school. Your take away David is "Don't be too cool for school".

2. The cost for tuition and books ranges from $2500 per year to an average of $9,000 per year and can get upwards of $30,000 per year depending on the courses and level of education. Gord is taking an executive MBA right now and his tuition is over $30,000. Now keep in mind that includes an iPad that holds all your books. The average overall cost in 2004 was $14,500 so the number of $17,000 per year is not far off. You are looking at over $50,000 for a 4 year program. There is a website put out by Stats Canada that gives you info on all costs associated for school. Google Tuition costs for post secondary schooling.

We are seeing an increasing number of parents and grand parents build education into their wealth management plan as part of their vision. There are some choices as to how you can accomplish this. An RESP is one where you receive some additional matching from the government. There are some restrictions so some people are opting for TFSA's or more elaborate structures like flowing money thru family trusts. It's definetly an area of concern and when you think about it most poeple want to give their kids some skills that last a lifetime rather than leave them a big estate.

96.3FM Radio Spot

HARIS DECIMA poll out on baby boomers. They were born between 1946 – 1965 and they’re retiring in droves right now. Poll shows they will not ‘retire’ the same way their parents did…58% see retirement as an ‘exciting new stage in life’ NOT the ‘doing the garden, digging the weeds’ of Macartneys ‘When I’m 64’ But of course, that means they need money t do all those exciting things …on their bucket list…and that’s all about planning, planning, planning.

A couple of things we are seeing. 1. These baby boomers are retiring coming off pretty high incomes. Another study showed that HNW retirees tend to keep spending the same way they spent while in their working years and 20 yrs after retiring their incomes were the most affected because they had diminished their capital as a result of their high draw over time vs. low net worth retirees who's relative incomes rose as they progressed into retirement. Pensions tend to positively affect this. 2. In terms of interest one of the the fastest growing interest segments is birdwatching. So the conclusion from this is don't be a birdbrain, make sure you plan appropriately and have a tracking mechanism so you don't run out of money.

Radio Rallies & Reversals

You can expect a fairly quiet day today in North American markets. Just a reminder that US markets are closed today for the US Thanksgiving Holdiay and will be closing early tomorrow. Overseas, Asia Pacific stocks are shrugging off North/South Korean tensions in andvance of Thanksgiving. Expectations of a strong 'black Friday' are boosting stock indexes: China's Shaghai Composite gained 1.3% and most other regional indexes are in the green.

Other headline news from around the world: China doubled its current account surplus in the 3rd quarter; Business confidence in Germany soared to its highest level in 20 years; The credit default market is pricing in a higher likelyhood of California defaulting on its debt than Italy and roughly the same chance as Spain; and new home sales dropped 8.1% in the the US.

GB

K96.3FM Radio Spot

Gord and I have created a shock and awe wealth management strategy just for this. I can only say this is geared to HNW clients over 50 who want to tackle their retirement.

Radio Rallies & Reversals

Between a resurface of Ireland's debt woes and North Korea continuing to push the line, not just in nuclear arms, but now in conventional arms with the recent sinking of South Korean navel vessel and now artillery shelling yesterday, the markets are definitely taking pause; but, it's tough to turn the equity markets down between Thanksgiving and Christmas. That jubilant seasonality becomes especially true in mid-term election years, for as the good folks at Bespoke Investment Group note, “The S&P 500’s performance following mid-term elections is quite positive. One year after election day, the S&P 500 averages a gain of 15.8% with positive returns every year (since 1946)!”

Bespoke goes on to comment about comparisons between now and the 1994 stock market environment. While some people might remember the stock market rallying right after the 1994 mid-term elections, the rally didn’t actually begin until mid-December. A more apt comparison might be 1966 when the Democrats lost 48 seats in the House, and three seats in the Senate, leaving the DJIA range-bound between 780 and 824 into year-end before embarking on a rally that would lift the senior index 26.7% from its pre-election low (744.32) in October of 1966 into its September 1967 high.

GB

Read more: http://advisoranalyst.com/glablog/2010/11/23/they/#ixzz16D0nwEbe

K96.3 FM Radio Spot

Retail analyst John Miller says he can tell how things are going to go by monitoring the sales of ‘Miraculous’ bras at Victoria’s Secret.
Two reasons he says: measures spending …and tells him there is extra money for the extravagances, like expensive bras.

All of which begs the question: How much should we be spending if we’re to be prudent – and be mindful of our money…

Hope that helps…you can give us an ‘uplifting’ message I’m sure

Retail sales edged higher on auto sales. How does that song go Chicks n cars and 3rd world war . This is defeinetly an uplifting message. I understand this miraculous bra is supposed to add 2 letters to the alphabet in terms of size. Don't let that fool you into thinking you have a bigger bank account. I don't think Canadians have cut back their spending like our neighbours in the US because of the diminished wealth affect.
Heading into retirement, you may take stock. It would surprise you going through the excercise of writing down your expenses over the last 12 month. I just did mine and I almost fell off my chair. It wasn't cars or bras that sent me over the deep end.

Radio Rallies & Reversals

All right I'm just going to cut to the end of Jeremy Grantham's Q3 newsletter:

Should we hold onto quality stocks? Moral Hazard has allowed low quality riskier stocks to outperform at the expense high quality stocks.

How far can emerging equities go? Emerging markets are fully priced, but they still sell at a discount to the 75% of the S&P500 that are not quality stocks. With their high commodity exposure, their strong finances, and their strong GDP growth - They should sell at a premium.

What about raw materials? In a developed world with 9% unemployment and masses of spare capacity, commodities are acting much too strong for this to be simply a normal responnse to a rather anemic cyclical recovery. Perhaps China truly gets that the world is running out of resources.

In Summary:
- Quality stocks are cheap;
- Stay in Emerging Markets;
- Keep a little extra cash;
- Be in commodites for the long-term.

GB

96.3FM Radio Spot

Irish bailout - $90 billion.
Why should we care?
Does it matter to us.

Next up: Portugal

Irish crisis dries up credit for local governments. Across Europe and the US, local governements are finding it more difficult to raise money on the bond market. This causes yields to rise and bond prices to fall further. That's not good for fixed income investors. Good to diversify and have a tracking system that allows you to identify these shifts and adjust your strategy.

Radio Rallies & Reversals

Since Ireland seems to be driving the markets of late, I thought I'd share a few comments from Credit Suisse about Ireland:

The total cost of a worst-case write-off for Ireland, Greece, and Portugal is 170 billion Euros, compared to the amount of money available - 670 billion Euros;

Core Europe cannot afford to turn its back on peripheral Europe; the cost of doing so would be at least $500 billion. Core Europe has at least $900 billion of banking assets in peripheral Europe;

The situation in Spain is sustainable for now. This is critical because there is nearly 460 billion Euros of core European bank assets in Spain, and Spain accounts for 11.5% of European GDP (70% larger than Portugal, Ireland, and Greece combined).

There's not much economic news this week, but watch for the second estimate of US GDP tomorrow, along with existing home sales and Canadian retail sales. On Tuesday we have durable goods orders in the US, new home sales and the FOMC minutes from November 2nd and 3rd.

Just a reminder that US markets will be closed all day Thursday and Friday due to their Thanksgiving holiday.

GB

K96.3 FM Radio Spot

Markets down, down, down …up
GM IPO a big success yesterday - $20B raised, US givernement made back $14B on sale of the shares of GM they held from the 2008 bailout.
Ireland in trouble – EU bailing them out
Closer to home Liberals in free fall…

What the heck is happening …and does it matter …

With regards to GM they have 350 retirees per 100 employees working so they will need to raise a heck of alot more to cover their unfunded pension liabilty moving forward. Geremy Grantham has been speaking out. He says Fiscal & monetary policy don't generate real long term economic growth. What this does is create distorted asset vaues that lead to false expectations. If your stocks are going up you think you are wealthier so you spend based on that. I think you need to review your retirement plans and make sure you have a tracking mechanism to keep you within a set of parameteres so you don't draw too much income based on false expectations and run out of money.

Radio Rallies & Reversals

So engineered higher prices leads to false budgetary expectations and decisions. What governments and central banks are doing is analogous to "the deliberately misplaced signal lanterns which the Cornish, in the stormy West of England, used to lure ships onto the rocks for Plunder." - according to Grantham.

For investors, it changes the normal workings of capitalism and the markets. Artificially low interest rates allow companies and stocks that would normally under-perform, out-perform; while companies and stocks that should out-perform, under-perform. Murphy's Law usually results in asset values correcting at a time of maximum vulnerability.

The problem with artificially low interest rates is that it transfers income from savers to borrowers. We have more retirees and near-retirees now than ever before. They tend to consume all of their investment income; with low interest rates their consumption really drops.

GB

96.3 FM Radio Spot on Wealth Creation

Few weeks ago Campbell announced a 15% personal income tax to take effect Jan. 1
Yesterday they announced, in all the bedlam, that the tax cut was off.

What does that mean to us in wealth creation?

Campbell said it will give B.C. the lowest provincial personal income tax in Canada, and business income taxes will also move to the lowest rates in North America. There is all sorts of research that suggests higher taxes ultimately reduce productivety and savings. They have done these studies in the past comparing tax rates across different countries and the corresponding effects on productivity and savings rates. I would argue that if this tax cut took effect it may help savings rates for those earning $72,000 or more. The tax cut will save $68 a year for someone with an income of $20,000, and up to $616 a year for those with an income of $72,000 or more.

Radio Rallies & Reversals

So its no secret the Fed is deliberately trying to inflate asset prices. Higher asset prices make everyone feel wealthier. When you feel wealthier, you're more inclined to spend and consume. One of the problems with this sort of artificial wealth effect is there's a tendancy to think it's normal. Everyone adjusts their expectations accordingly. Governments, corporations, pensions, households; all set their revenue and expense budgets higher.

Adding to the problem is above-average profit margins. According to Jeremy Grantham "for long-term budgetary pruposes and for establishing fair value for global equities, variations in profit margins are an even more potent variable than are P/E ratios or inflation. The 70's had margins well below average and the 80's wer average, but since 1995, we have lived in an above average profit margin world as well as an above average P/E world. The fact that it has persisted for 15 years does not make it normal. It just guarantees that decision makers will think it's normal and act accordingly.

GB

K96.3 FM Radio Spot

That's one way to create wealth - invest in diamonds and hope they increase in value. It is certainly tempting to jump on the band wagon when it is on the run. Just make sure you get off before it goes over a cliff because what goes up usually goes down at some point. The old addage is it's easy to buy the challenge is when to sell.

It seems that investors are making investment decisions based on what investments have performed well in the recent past, and this in turn is resulting in concentrated portfolios. This is essentially the same as driving while looking in the rear view mirror and you're approaching a fork in the road.

Wealth preservation requires diversification. The idea of diversification has taken a hit as a result of the last couple of bear markets, as it seems everything went down together. While diversification may break down in the short-run, in the long-run it can increase returns while reducing risk. Just don't forget to re-balance from time-to-time. The main point is that the winners won't always be the winners, and the losers won't always be the losers.

Radio Rallies and Reversals

So yesterday we talked how loose monetary policy has no effect on the real economy long-term, but it does effect asset prices in the short-term, and it is the wealth effect from rising asset prices that stimulates the economy in the short-term, but at the expense of speculation and potential bubbles. If want an example of speculation in the market, yesterday comes to mind.

“Monetary policy works for the most part by influencing the prices and yields of financial assets, which in turn affect economic decisions and thus the evolution of the economy” (Bernanke, May 2004, American Economic Review). The Fed is deliberately throwing gas on the fire yet at the same time claiming that the market is efficient. We have already discovered twice in the last decade the consequences of such a policy. Is three times the charm?

GB

96.3 FM Radio Spot

SEX AND MONEY – Invest like a man- be more financially literate and more engaged
And take more risks. The changing role of women – more status, more money, more positions of influence- and they need to become more involved in issues around wealth accumulation. Next 20 years will see more women grad from university than men – and that means changing influence in business world as they climb into leadership positions. A changing family and business dynamic.

There is research on how the money-sex interplay affects investment behaviour in men. The results suggest that being turned on makes men take more risk. Another study suggests that women are more risk averse. Let's hope that changes.

With respect to the second point about wealth accumulation, have you heard of the "Sandwich generation"? These are people typically in their 50's who are caregiving for their parents in their 80's and supporting their 20 year kids through school. More often than not women sacrifice their savings to do so. A TD poll suggests 1/3rd of women are not saving at all and women need to save 20-25% more than men because they marry older men and tend to live longer.

Radio Rallies & Reversals - Subsidized Rates, Financial Markets, and the Economy

So yesterday we concluded that low interest rates and debt don't impact long-term economic growth, only real factors such as education, demographic profile, R&D, etc. If you want an example, just look at Japan. So what is the Fed playing at cutting its policy rates to zero?

Continuing on with a summary of Jeremy Grantham's Q3 newsletter, he shows that low interest rates and the resulting increase in debt has a profound impact on market prices. Coupled with year 3 in the Presidential cycle, the impact on market prices is magnified as low rates increase the level of speculation. The economic response to the extra market move in year 3 occurs in year 4, and is entirely due to the wealth effect of rising asset prices due to speculation, not fundamentals.

Is this good or bad, and what are the implications? Keep tuning in as we continue to summarize Jeremy's thoughts.

GB

Radio Rallies & Reversals

I've finally gotten around to reading Jeremy Grantham's Q3 newsletter. My only regret is I didn't read it sooner. Over the next week or so, I'll summarize his thoughts, but I suggest you have a read yourself. If you'd like a copy, send me an email or visit www.gmo.com and sign up.

He starts of his newsletter with a summary of lessons learned from recent Fed policy, but I'll share with you his last point: "In almost every respect, adhering to a policy of low rates, employing quantitative easing, deliberately stimulating asset prices, ignoring the consequences of bubbles breaking, and displaying a complete refusal to learn from experience has left Fed policy as a large net negative to the production of a healthy, stable economy with strong employment."

Bottom line - Debt has no long-term effect on economic growth; only real factors such as education, population profile, R&D, etc. Therefore, low interest rates have no long-term effect on economic growth, for its main role is to encourage more debt. The Fed's own data shows this, as GDP growth has been constant since the fifties despite the explosion in debt the last three decades. Their only contribution has been a series of bubbles and their subsequent bursting, the last one resulting in a recession without equal since the thirties.

GB

Diversification is still important

There were a couple of articles in today's Globe & Mail I thought I'd summarize for you today and they have to do with diversification. It seems that investors are making investment decisions based on what investments have performed well in the recent past, and this in turn is resulting in concentrated portfolios. This is essentially the same as driving while looking in the rear view mirror and you're approaching a fork in the road.

The idea of diversification has taken a hit as a result of the last couple of bear markets, as it seems everything went down together at a time when diversification was supposed to help. While diversification may break down in the short-run, in the long-run it still can increase or at least maintain returns while reducing risk. Just don't forget to re-balance from time-to-time. The winners won't always be the winners, and the losers won't always be the losers.

GB

96.3 FM Radio Wealth Management Spot

Looks like we are living longer here is the land of milk and honey. BC Vital Statistics Agency released a report 2009: British Columbians now living on average to 81.4 years up from an average life expectancy to 78 in 1991. Living longer - presumably need more money for retirement - wealth accumulation.

Not only that these numbers don't give us or clients any sense of risk... For example the remaining life for someone who is 65 year old is on average 20 years. The Standard deviation around that is 11 years meaning most will live between 75 and 95 and the variability is 56% meaning you have a 50/50 chance of making 85 if you are 65 today. That begs the question How much money does a 65 year old need? It's important to have a tracking system for your money so you can adjust your stratgey as life events present themselves. A rough guide we use is draw about 4% of your capital in income and you will be able to preserve your capital and protect against inflation. You may on the other hand have a goal of not being the richest person in the graveyard so drawing more out may be an option.

Are Precious Metals Too Expensive

Are precious metals too expensive? For a full report I recommend you check out Casey Research's website and read their thoughts, but in a nutshell they suggest you ask yourself the following three questions:

"1. Is there any politically feasible way that the US government can avoid an overt or covert default on its obligations?

2. As the coming default becomes obvious to a broader universe, is there any way the Fed will be able to keep a lid on interest rates?

3. As the dollar era grinds to a halt, will central bankers, institutions, and investors want to replace their dollars with alternative fiat currencies - the Euro? Pound? Yen? Renminbi?"

Now before you run out and put everything into precious metals, never rule out government doing something unconventional to disadvantage gold; diversification is still key.

GB

K96.3 Radio Wealth Management Topic

Canadian mortgage debt is $1 trillion, highest ever. Canadian Mortgage association says Cdn homeowners on solid footing, not overextended. The home is fundamental platform for financial health - wealth creation.

We consider owning a home as a fundamental part of your financial plan. Canadians with debt have an average of $150,000 or 50% equity so it can represent a good chunk of your net worth. Compare that with the US where poeple have a negative equity position and I think we are in better shape than our neighbours. It is definetly preferable to renting in most scenarios because it is almost like a forced savings with some potential for appreciation. Where it can be a problem is if interest rates rise. Today a 5 year mortgage rate is less than 4%, amortized over 25 years, a $100,000 mortgage payment is $526 per month. If we run the numbers. For every 2% increase in rates your payment jumps by approxiamately $100per month. Provided you can withstand a rate increase in the future I think it's okay to have some mortgage debt. The second issue is liquidity, if you have to sell your home and prices are falling you may experience a loss. The main point is that it is something you should look at as a long term asset that forms part of a balanced approach.

Radio Rallies & Reversals

Here's the line-up of macro-economic data for this week: Today we've got Canadian housing starts for October; tomorrow we've got US wholesale trade for September, and new housing price index for September in Canada; mid-week we've got some trade data on both sides of the border; and rounding out the week on Friday we've got consumer sentiment in the US and Q3 GDP numbers for both Germany and the EU.

Last week we got QE2 from the US Fed. For the week, the TSX Composite was up 2%, S&P500 3.6%, Nasdaq 2.9%, and Russell 2000 4.7%. YTD in CDN$ the TSX Composite is up 10%, S&P500 4.4%, EAFE .4% and Emerging Markets 10.5%. As of last Friday, 437 companies in the S&P500 have reported third quarter results and so far 72.5% have rported positive earnings surprises. Earnings are up 29% year-over-year.

As a side note, check out what Bill Gross of PIMCO and Eric Sprott of Sprott Asset Management have to say about quantitative easing by visiting their respective web sites.

GB

Radio Rallies & Reversals

Let the trade and currency wars begin. Now that the US Fed's QE2 missile is away, what will be the response from other countries. The last thing the global economy needs is a trade war. The longer you fight it out in no mans land, there's a tendency to revert to 'every man to himself'.

Ahead of next weeks G20 meeting, tension are on the rise over currency manipulation, and other central banks around the world are considering their response. Everyone is trying to export their way to economic growth. In Asia, China is key - As they hold back their currency, other Asian countries have to do the same in order to compete for exports.

Should QE2 work in reviving the US economy, everyone should be better off as the US is still the worlds biggest consumer.

GB

Friday Radio Rallies & Reversals

That would certainly cut into my budget. Last week I attended a portfolio management conference in Toronto and one of the presenters was Moshe Molevski a professor at U of T and Retirement research expert. He talked about the impact of significant events in life that affect your retirement. His topic was in the context of market events like the Financial crisis and it's affect on people retiring within 5 years and 1 decade after their retirement date. There are investment strategies to address this risk.

I would consider this a significant event in Charlie's life that could through a wrench in his retirement. If I were Charlie's financial planner, my recommendation would be to consider either extending his retirement date from 60 to 61 or using a very specialized investment strategy.

Friday Radio Rallies & Reversals

North American stocks began today on a relatively flat note, even after an upbeat report on U.S. payrolls for October.
The Dow Jones industrial average is at 11,433. The S&P 500 rose is at 1223. In Canada, the S&P/TSX is up about 1/2% to 12,950.
Despite the lack of movement in the United States, some financial stocks were strong following a report that the Federal Reserve might allow some of the healthier firms to start raising their dividends. In Canada, Manulife rose 4.9 per cent, continuing an impressive rebound that began on Thursday when the life insurer reported a smaller-than-expected quarterly loss.


Credit Suisse believes that the FED has effectively committed to purchasing assets until inflation returns to its target range of 1.5% to 2%. This would require growth of at least 4% over the next few years, and so QE will have to be topped up to the tune of $500-$700 billion.

Bottom line: According to Credit Suisse stay overweight stocks. To all you momentum investors out there I say - the force is with you. Otherwise, the technicals would suggest we are overbought and wait for a near-term pull-back.

Thursday Radio Rallies & Reversals

Rallying -Stocks are rallying out of the gate after the Fed announced it will pump $600 million into the economy. Overseas markets are also on the rise. The Canadian dollar is rising with the risk off attitude. Good for the Snowbirds.

Reversing - The US $ is lower. The QE2 is causing a rotation out of US $ into all assets especially commodities. It's added liquidity by increasing the supply of US$ and those dollars are chasing returns.

Opportunity -Alot of investors argue the two major events in the US this week, the Fed QE2 and gains by the Republicans were already priced into the market. As a result we may see focus shift back to the economy specifically the jobs numbers which surged on the last weekly report.On the other hand the Fed has ignited the market in the short term and seasonality may sustain the momentum.


staying with the seasonality theme again today, UBS reported some interesting stats on what is historically the best period for stock performance, that being from November through May. Historical performance for the June through October period has averaged a negative 1.2% over the last 55 years. This year the TSX Composite index is up 7.8% from June through October. So what is in store for the next 6 months. If history is any indicator, when June through October performance is down more than 5%, the next 6 months are up 7.8%; when June through October performance is between negative 5% and positive 5%, the next 6 months are up 6.2%; and when June through October performance is up more than 5%, the next 6 months are up 10.3%.

Radio Rallies & Reversals

Global stock markets are all up ahead of the FOMC announcement tomorrow. Investors are looking for clarity around the next round of quantitative easing. From a seasonal standpoint, November is the first month of what is usually a favorable six month period. According to Brooke Thackray, from 1950 to 2007, the S&P500 is up an average of 4.6% from November to January, and positive 74% of the time. Within this trend, metals and mining stocks usually do well for the remainder of the calendar year. As long as QE2 doesn't disappoint, expect more of the same.

GB

Tuesday Radio Advice

Rallying - North American markets are rising this morning. Investors are anticipating the outcome of 2 events. The mid-term elections and the Fed Reserve's Quantitative easing policy.

Reversing - Once again gold and the US dollar are weak

Opportunity - If we have a favourable anouncement from the Fed on QE2, we can expect a further US$ weakening and a further drop in 10 year yields. This has translated into favouring equities that have value, momentum and profitability factors and been less favourable to growth strategies.

Radio Rallies & Reversals

Global stock markets finished in the green today, and North American stock indexes are holding on to gains after positive manufacturing data out of China and the US. On the earnings front, 337 companies in the S&P500 have reported Q3 earnings and so far 75% of companies have reported positive earnings surprises. All eyes and ears however, will be focused on tomorrow's mid-term election in the US, followed by the FOMC meeting on Wednesday and a sign of quantitative easing to come.

GB