Page 28 - Biz X Magazine - October 2015 Edition
P. 28
portfolio corner
Made In China
By Steven Mayo
Here we go again. Last year it was Ebola, Of course, the media will continue to look at high quality companies to buy
this year it’s China spooking the markets. to do its best to interpret all this new since they have come down. Again, I
As I write, volatility is much higher in the information, making comparisons to a ask investors to concentrate on U.S. and
stock markets and the media is doing its previous correction, like 2008, with which Canadian dividend paying companies. The
best to spook investors. there should be no comparison made. Their U.S. economy is a giant cash flow machine
We’ve been here before and we will be reporting is to keep investors on high-alert and will continue to be a good place to
again. However, we are given the impression for more bad news. This is all entertainment. invest.
that 10% corrections are not part of When the Dow 30 stock index drops 1,000 To recap, China’s problems are not
investing and yet the personalities on TV points, that’s big news, but when it recovers, about systemic risks in Europe or the U.S.
act like it’s different this time! In May, the they say it’s only up 4%, even though they Financial stress indicators are not flashing
media was much more confident in the are roughly the same. Saying 4% is not red. The U.S. economy continues to lead.
long-term global economic story than they nearly as dramatic. I will leave you with this to think about:
are now. Currently they’re talking about It appears that this market may be volatile The word crisis in Chinese is composed
economic slow-down. through October but likely setting up for a of two characters: the first, the symbol of
Every correction plays out the same. An rally into the New Year. It’s important that danger; the second opportunity.
unexpected event happens, like China’s investors keep this in mind. This is a low Steven Mayo is a Vice President,
currency devaluation in August, which interest rate environment, with way too Investment Advisor with RBC Dominion
caused fear in its casino-like stock market, much money still sitting on the sidelines. Securities Inc. (Member–Canadian
spilling over to other Asian currencies, It is only a matter of time when fear of the Investor Protection Fund). This article
the bond markets, and other global stock stock market is replaced with fear of missing is not intended as nor does it constitute
markets. With this, volatility spiked due to out on great opportunities. investment advice. Readers should consult
heavy short-term selling, as reflected in the In a short sighted market environment a qualified professional before taking any
VIX indicator dramatically rising. it’s best not to sell (it’s too late) but better action based on information in this article.
28 BIZ X MAGAZINE • OCTOBER 2015
BizX2015OCT52.indd 28 2015-09-29 10:02 PM
Made In China
By Steven Mayo
Here we go again. Last year it was Ebola, Of course, the media will continue to look at high quality companies to buy
this year it’s China spooking the markets. to do its best to interpret all this new since they have come down. Again, I
As I write, volatility is much higher in the information, making comparisons to a ask investors to concentrate on U.S. and
stock markets and the media is doing its previous correction, like 2008, with which Canadian dividend paying companies. The
best to spook investors. there should be no comparison made. Their U.S. economy is a giant cash flow machine
We’ve been here before and we will be reporting is to keep investors on high-alert and will continue to be a good place to
again. However, we are given the impression for more bad news. This is all entertainment. invest.
that 10% corrections are not part of When the Dow 30 stock index drops 1,000 To recap, China’s problems are not
investing and yet the personalities on TV points, that’s big news, but when it recovers, about systemic risks in Europe or the U.S.
act like it’s different this time! In May, the they say it’s only up 4%, even though they Financial stress indicators are not flashing
media was much more confident in the are roughly the same. Saying 4% is not red. The U.S. economy continues to lead.
long-term global economic story than they nearly as dramatic. I will leave you with this to think about:
are now. Currently they’re talking about It appears that this market may be volatile The word crisis in Chinese is composed
economic slow-down. through October but likely setting up for a of two characters: the first, the symbol of
Every correction plays out the same. An rally into the New Year. It’s important that danger; the second opportunity.
unexpected event happens, like China’s investors keep this in mind. This is a low Steven Mayo is a Vice President,
currency devaluation in August, which interest rate environment, with way too Investment Advisor with RBC Dominion
caused fear in its casino-like stock market, much money still sitting on the sidelines. Securities Inc. (Member–Canadian
spilling over to other Asian currencies, It is only a matter of time when fear of the Investor Protection Fund). This article
the bond markets, and other global stock stock market is replaced with fear of missing is not intended as nor does it constitute
markets. With this, volatility spiked due to out on great opportunities. investment advice. Readers should consult
heavy short-term selling, as reflected in the In a short sighted market environment a qualified professional before taking any
VIX indicator dramatically rising. it’s best not to sell (it’s too late) but better action based on information in this article.
28 BIZ X MAGAZINE • OCTOBER 2015
BizX2015OCT52.indd 28 2015-09-29 10:02 PM
