Last week, I talked about sector diversification and how it helps reduce risk in your portfolio. This week, I want to build on that by introducing sector rotation – a strategy some investors use to try and stay ahead of market trends. But before we dive in, if you’re new to investing, sector rotation might […]
Tag: TTD
Weekly Update for the week ending February 14, 2025
When it comes to investing, putting all your money into one industry is like relying on a single star player to carry your hockey team. Sure, they might put up big numbers in some games, but if they hit a slump, run into tough opponent or get injured, your team (or portfolio) could struggle. That’s where sector diversification comes in. Just like a championship team needs a mix of scorers, grinders, defenders, and a rock-solid goalie, a strong portfolio benefits from investments across multiple sectors. This strategy helps balance risk and improve long-term performance, no matter what the markets throw your way. Let’s take a closer look.
Weekly Update for the week ending December 6, 2024
December is here, bringing hope that this historically strong month for stocks will close out the year on a high note. 2024 has already seen indexes setting and breaking record highs, leaving investors eager for a festive flourish to finish the year. Historically, December has earned its reputation as a strong performer, thanks in part to the “Santa Claus rally.” This phenomenon often lifts markets during the last week of December and the first few trading days of January. While the rally is not guaranteed, several factors help explain why December tends to shine.
Weekly Update for the week ending November 22, 2024
What Falling Interest Rates Mean for Your Portfolio
Last week, we explored how rising interest rates can challenge investors. This week, let us flip the script and talk about something that could actually work in your favour—falling rates. When interest rates drop, it is not just borrowers who feel the relief. If you know where to look, your stock portfolio can benefit too.
Why Do Central Banks Lower Interest Rates?
Central banks, like the Bank of Canada (BoC) or the US Federal Reserve (Fed), lower interest rates to stimulate a sluggish economy. Cheaper borrowing encourages spending and investment, helping businesses expand, creating jobs, and keeping inflation in check. Think of it as their way of giving the economy a boost when growth hits a wall.
Weekly Update for the week ending October 11, 2024
Last week, I touched on why October has a bit of a reputation as a volatile month in the markets—historical crashes, rapid recoveries, and plenty of unpredictability. So, what should you expect for your portfolio this October? Let us take a look.
First off, volatility does not necessarily mean disaster. In fact, it can create opportunities, especially for long-term investors. If you see sharp drops in certain stocks or sectors, it could be a chance to add to your positions or get into new ones at discounted prices. But timing the market is tricky—so keep your long-term goals in mind (you have set some long-term goals, right?) rather than reacting emotionally to short-term swings.
Weekly Update for the week ending August 2, 2024
This past week, the US Federal Reserve (Fed) announced that it would keep the benchmark interest rate at 5.5%, a move that was widely expected. However, the Fed also hinted at the possibility of a rate cut in September, as inflation cools and the labour market shows signs of slowing. The Federal Open Market Committee (FOMC) unanimously agreed to maintain the federal funds rate in the 5.25% to 5.5% range, where it has been for the past year.