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Insights and perspectives 2016 e
1. The Great Disconnect
2016
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Protection Fund.
3. Cash Flows Out of Equities into Bonds Unabated
Source: ICI (excludes MMKT) – Net new cash flow is the dollar value of new sales minus redemptions combined with net exchanges. Note: Data for funds that
invest primarily in other mutual funds were excluded from the series. Components many not add to the total because of rounding.
-229
-2 -24
-129 -153
160
25
-76
428
30
371
232
118
306
-71
44
-27
1003
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1,000
$1,200
2008 2009 2010 2011 2012 2013 2014 2015 Total
Equity
Bonds
$B
U.S. Industry - Net Mutual Fund Cash Flows
6. On A Constant Fear Of The Next Crisis
> “George Soros says U.S. Banks ‘basically insolvent’”– Reuters, April 6th, 2009
> “Fed to buy $600 billion in bonds to aid economy” – Toledo Blade, March 11th, 2010
> “Debt crisis unsettles European economy” – The Washington Post, February 9th, 2010
> “Fears grow over length of U.S. job crisis” – Economic Times, December 3rd, 2010
> “Obama: Raise debt ceiling or risk global recession” – Bloomberg, April 15th, 2011
> “United States of America [Credit] Rating Lowered to ‘AA+’ due to Political Risks, Rising
Debt Burden” – Standard & Poor’s, August 5th, 2011
> “Occupy Wall Street: Civil society’s awakening” – LA Times, November 22nd, 2011
> “U.S. approaches ‘fiscal cliff’ and world watches from the sidelines” – The Washington
Post, November 2nd, 2012
> “Five years after Lehman, Americans still angry at Wall Street” – Reuters, September 15th,
2013
7. The Great Disconnect
Total Return from March 9, 2009
*MSCI World
133.4%
Source: Bloomberg, In Canadian Dollars to December 31, 2015
S&PTSX
110.0%
S&P500
272.2%
*MSCI Europe
105.6%
(*MSCI World / Europe Price only)
9. The Most Hated Bull Market in History
Chart 1: Sell Side Consensus Indicator (as of 29 February 2016)
Source: BofA Merrill Lynch Global Research US Equity & Quant Strategy
Note: Buy and Sell signals are based on rolling 15-year +/- 1 standard deviations from the rolling 15-year mean. A reading above the red line indicates a Sell signal and a
reading below the green line indicates a Buy signal.
17. 38 Years Ago – We Were Running Out of Oil
“World oil production can probably keep going up for
another six or eight years. But, sometime in the 1980’s
it can’t go up much more. Demand will overtake
production.”
Nationally Televised Speech, April 18, 1977
18. And Today We Have Too Much – Drill Baby Drill!
Source: arborresearch.com
25. Probability stock fell since you last checked
If you check the value of your portfolio...
47%
44%
40%
28%
20%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Daily Weekly Monthly Yearly Each Decade
Source: Source S&P 500, March 4th, 1957-Present
26. The Seventy Per Cent Advantage
S&P500 Total Return Ranges 1926-2015
‘14
'12
'10
'04
'15 '93 '09 '13
'00 '11 '88 '03 '97
'90 '07 '86 '99 '95
'81 '56 '79 '98 '91
'77 '94 '72 '96 '89
'69 '92 '71 '83 '85
'62 '87 '68 '82 '80
'53 '84 '65 '76 '75
'46 '78 '54 '67 '55
'01 '40 '70 '59 '63 '50
'73 '39 '60 '52 '61 '45
'02 '66 '34 '56 '49 '51 '38 '58
'08 '74 '57 '32 '48 '44 '43 '36 '35 '54
'31 '37 '30 '41 '29 '47 '26 '42 '27 '28 '33
-40% to -
50%
-30% to -
40%
-20% to -
30% -10% to 20% 0% to -10% 0 % to 10% 10% to 20% 20% to 30% 30% to 40% 40% to 50% 50% to 60 %