Early Signs of Growth

Posted by John Woodfield on January 13, 2012 | No Comments

John Woodfield, B.Comm, CFP, FMA, FCSI│Raymond James Ltd.
Senior Investment Advisor

john.woodfield@raymondjames.ca │www.raymondjames.ca 250-979-2744

 In last week’s missive we discussed our outlook for 2012. Central to our view is that two of the biggest risks, Euro breakup and Chinese hard landing, had been overly discounted by the market. This, in our view, has created an opportunity for risk-tolerant, Growth oriented investors to rotate back into risky assets.
 This is not a new view on our part; in fact it was a key reason why we adopted such an aggressive asset allocation recommendation last November when we rolled out our Raymond James Ltd. recommended asset allocation. As a reminder, that allocation stands at 25% Bonds, 65% Equity, 10% Alternative (mostly gold), and 0% Cash for Growth-oriented investors.
 This heavy allocation towards equities (65% vs. a maximum allocation of 70%) rested on a number of factors including: Bond vs. Equity Performance, Equity Valuations, Earnings Momentum, Interest Rate Policy, Market Technicals, Policy Initiatives in Europe, and Chinese Growth.
 Since November many of these indicators (interest rate policy, market technical, and Euro policy, and the outlook for China) have continued to improve.

www.raymondjames.ca/rjl_marketing/Library/FA%20Website%20Toolkit/F/F2/WeeklyTrends.pdf

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