The Psychology of Investing

Transcription

1 The Psychology of Investing Ryan Nobbs, Investment Advisor BMO Nesbitt Burns

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3 Market Historically Far Stronger with Democrat Presidents Average S&P 500 Gains since 1928 Democrat Republican 10,2% 1,1% Adminsitration Term S&P Returns Hoover ,8% ,2% Roosevelt ,5% ,2% Roosevelt/Truman ,9% Truman ,0% Eisenhower ,2% ,8% Kennedy/Johnson ,6% Johnson ,1% Nixon ,8% Nixon/Ford ,4% Carter ,3% Reagan ,4% ,1% Bush ,9% Clinton W. Bush Obama ,7% -3,3% 11,6% ,7% -9,0% 16,8%

4 Will America Be Great Again? Potential Economic Impact: o Tax Cuts o Infrastructure Spending o Less Regulation o Bigger Deficits o Protectionism o Higher Interest Rates? Republican sweep = No Gridlock in DC Source: BMO Capital Markets

5 The Bull Market is Poised to Continue (S&P 500) Source: Bloomberg 5

6 U.S. Market Has Massively Outperformed Since 2011 S&P 500 vs S&P/TSX Composite in Canadian dollar terms Mar-11 Oct -11 May-12 Dec-12 Jul - 13 Feb-14 Sep-14 Apr-15 Nov-15 S&P 500 TSX Composite Source: BMO Private Client Research, Bloomberg 6

7 Market Corrections Are Not Uncommon

8 2016 Is No Different

9 The Importance of Staying Invested $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Jul - 79 Aug-82 Sep-85 Oct -88 Nov-91 Dec-94 Jan-98 Feb-01 Mar-04 Apr-07 May-10 Jun-13 S&P/ TSX Composite Index S&P/ TSX Composite Index (without top 1% of days) Source: Bloomberg 9

10 Bonus Slide List of Defunct Car Companies 1935 Stout Scarab Source: Wikipedia 10

11 Bonus Slide List of Defunct Rail Companies Grand Trunk Locomotive Source: Wikipedia 11

12 Bonus Slide Solar Power Index Performance since 2008 Ardour Solar Index Performance Source: Factset 12

13 BMO Still Favours Stocks Over Other Asset Classes BMO Nesbitt Burns Investment Strategy Committee s Recommended Asset Allocation (%) Income Balanced Growth Aggressive Growth Recommended Benchmark Recommended Benchmark Recommended Benchmark Recommended Benchmark Asset Mix Weights Asset Mix Weights Asset Mix Weights Asset Mix Weights Cash Fixed Income Equi t y Canadian Equity U.S. Equity EAFE Equi t y 5* 5 5* 5 10* 10 15* 15 Emerging Equity * Within EAFE, we specifically recommend Continental European equity. Source: BMO Nesbitt Burns Private Client Strategy Committee 13

14 Disclosures General Disclosure The information and opinions in this report were prepared by BMO Nesbitt Burns Inc. Portfolio Advisory Team ( BMO Nesbitt Burns ). This publication is protected by copyright laws. Views or opinions expressed herein may differ from the views expressed by BMO Capital Markets Research Department. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted, or otherwise reproduced, stored, disseminated, transferred or used, in any form or by any means by any third parties, except with the prior written permission of BMO Nesbitt Burns. Any further disclosure or use, distribution, dissemination or copying of this publication, message or any attachment is strictly prohibited. If you have received this report in error, please notify the sender immediately and delete or destroy this report without reading, copying or forwarding. The opinions, estimates and projections contained in this report are those of BMO Nesbitt Burns as of the date of this report and are subject to change without notice. BMO Nesbitt Burns endeavours to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, BMO Nesbitt Burns makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to BMO Nesbitt Burns or its affiliates that is not reflected in this report. This report is not to be construed as an offer to sell or solicitation of an offer to buy or sell any security. BMO Nesbitt Burns or its affiliates will buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. BMO Nesbitt Burns, its affiliates, officers, directors or employees may have a long or short position in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. BMO Nesbitt Burns or its affiliates may act as financial advisor and/or underwriter for the issuers mentioned herein and may receive remuneration for same. Bank of Montreal or its affiliates ( BMO ) has lending arrangements with, or provides other remunerated services to, many issuers covered by BMO Nesbitt Burns Portfolio Advisory Team. A significant lending relationship may exist between BMO and certain of the issuers mentioned herein. BMO Nesbitt Burns Inc. is a wholly owned subsidiary of Bank of Montreal. Dissemination of Reports: BMO Nesbitt Burns Portfolio Advisory Team reports are made widely available at the same time to all BMO Nesbitt Burns investment advisors. Additional Matters TO U.S. RESIDENTS: Any U.S. person wishing to effect transactions in any security discussed herein should do so through BMO Capital Markets Corp. ( BMO CM ) and/or BMO Nesbitt Burns Securities Ltd. ( BMO NBSL ). TO U.K. RESIDENTS: The contents hereof are intended solely for the use of, and may only be issued or passed onto, persons described in part VI of the Financial Services and Markets Act 2000 (Financial Promotion) Order BMO Wealth Management is the brand name for a business group consisting of Bank of Montreal and certain of its affiliates, including BMO Nesbitt Burns Inc., in providing wealth management products and services. BMO Nesbitt Burns Inc. is a Member-Canadian Investor Protection Fund and a Member of the Investment Industry Regulatory Organization of Canada. BMO CM and BMO NBSL are Members of SIPC. BMO and the roundel symbol are registered trade-marks of Bank of Montreal, used under license. "Nesbitt Burns" is a registered trade-mark of BMO Nesbitt Burns Inc. 14

15 Disclosures Company Specific Disclosures For Important Disclosures on the stocks discussed in this report, please go to: The authors of this report (or their household members) directly or beneficially own securities of this issuer: None. Ratings and Sector Key BMO Capital Markets uses the following ratings system definitions: OP = Outperform Forecast to outperform the analyst s coverage universe on a total return basis; Mkt = Market Perform Forecast to perform roughly in line with the analyst s coverage universe on a total return basis; Und = Underperform Forecast to underperform the analyst s coverage universe on a total return basis; (S) = speculative investment; NR = No rating at this time; R = Restricted Dissemination of research is currently restricted. Prior BMO Capital Markets Rating System (January 4, 2010 April 5, 2013): Other Important Disclosures For Other Important Disclosures on the stocks discussed in this report, please contact your BMO Nesbitt Burns Investment Advisor or go to or write to Editorial Department, BMO Capital Markets, 3 Times Square, New York, NY or Editorial Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3. Technical Analysis Disclaimer Recommendations and opinions contained herein are based on Technical Analysis and do not necessarily reflect fundamental recommendations and opinions and may relate to companies which, in some instances, are not followed on a fundamental research basis. 15