Market Insights

What happened in January? Last month proved to be a much better month than most for investors of almost every type.  The major equities indexes, where many hold the majority of the assets to fund future retirement, all gained dramatically.  The Dow, which only advanced by 2¾% over the course of January, was the laggard. 

Overall, last year was a trying time for almost every Canadian investor.  Several factors contributed to the turmoil and difficulty that affected every asset class and investor at some point during the last 12 months.  

Most people, investors or not, tend to base their current views on what is most recent in memory. In good times, we may expect them to continue for the foreseeable future; in bad times, we often underestimate our ability to move forward. We all tend to “drive by the rearview mirror” to some extent, basing our decision making on what has just happened.

Three notable events were primary triggers for broad moves in North American equity markets last month. For November, and due to the tight linkage of the Canadian economy to the American economy, the major events that raised and lowered the TSX and the U.S. indexes were from south of our border.

The beginning of the month was uneven for equity investors. After rising-and-falling, the major North American indexes, repeated their rise-and-fall again by mid-month. The more broad-based indexes, the TSX and S&P 500, were flat after these ups-and-downs, while the Dow and NASDAQ had lost 3.2% and 2.4%, respectively.