Jordan Wealth Management Group - ScotiaMcLeod Truro

Since the last time...

It has been a see-saw for the markets in the past month. Quantitative easing announcements and better than expected job growth in the U.S. brought us up; then Sovereign debt fears (Ireland) brought us back down, then back up a bit again thanks to a strong General Motors debut.This has all been overlayed with continued currency swings as China tries to export deflation to the U.S.; while the U.S. tries to create "good" inflation.

One sign I see that confirms the belief of many that the commodity boom still has some years to go is the announcement that Caterpillar was acquiring Bucryrus, a large manufacturer of mining equipment, and that they are also going to build a new large-engine manufacturing facility in China. Decisions of this magnitude do not happen if there is pessimism about the medium/long term.

I am still in the camp that the markets will continue to look for excuses to sell off a bit, but that if/when they do, you should be prepared to buy bargains/companies/markets that are then more reasonably priced. If in the meantime; you agree that it is darned hard to call the tops and bottoms of the market - then stay invested!

For those pessimists out there, I know there is at least on influential money manager out there preaching that our Canadian banks will dissapoint with their earnings over the next year, as they are not making the same interest margins that they were a while ago...

In addition, if O'bama's administration is not successful in accelerating job growth in the 2nd half of their 4 year term, then the current job gain trends in the US indicate it will take 8 to 10 years to reverse the approximately eight million jobs that were lost in the US in 2008 to 2009.

Meanwhile, for this quarterly earnings reports just past us; approximately 70% of the U.S. S&P500 companies reported positive earnings surprises. While good, this is the lowest this number has been for quite a few quarters where the number has been in the 75 to 80% range.

It remains very likely that we will have very modest growth for the next four to five quarters and then hopefully after that, in 2012, fairly strong growth going forward. Based on Scotia Economics interest rate and currency forecasts, 12 to 18 month total return expectations range from 5% to 7% for equities, negative 3% for government bonds and 1% for cash. With statistics indicating that many households are either sitting with large cash reserves or having an overweight to the "safety" of bonds, they are likely not well positioned to outperform broad market indices over the longer term.

There continue to be attractive and strategic investment opportunities, but they must align with your own planning needs with regard to time horizon and risk tolerance.

I welcome the opportunity to discuss the information presented in this commentary or any other questions you may have.