DM Portfolio Commentary – Q3 2021
Financial stress in China adds to inflation worries – As the third quarter was drawing to a close, equity investors were served a jolt of long-forgotten volatility when the Dow dropped by more than 600 points in a single day. The catalyst for the plunge was the revelation – or at least the acknowledgement – that one of China’s major property developers was buckling under the strain of a mountainous debt load and would struggle to complete its vast array of projects. In a country where households are uncommonly levered to real estate and construction accounts for an outsized portion of GDP, this was understandably worrisome. Of particular concern in the west was the possibility that cascading property and debt markets in China would reach into our financial systems, much like the sub-prime crisis had imperilled major banks and lenders well beyond US borders just over a decade ago.
Click here to read more: DM Portfolio Commentary – Q3 2021
DM Monthly Report – Sept 2021
FOLLOWING OUR EQUITY PROCESS INTO U.S. HOMEBUILDING – During the summer, we made select adjustments to our equity mandates, trimming positions which we felt had run slightly ahead of fundamentals and adding to those which offered better relative value. Among these transactions was out first entry into the US homebuilding industry, with two names from the sector added to the DM Foreign Equity portfolio in late July.
The process that led to the purchase was the same one that underpins all of our buy and sell decisions, where ideas are generated and researched by our analytical group and then presented to the DM investment committee for discussion and voting for implementation.
Click here to read more: DM Monthly Report – September 2021
Cardinal Update – August 2021
The Power of Dividends – Inflation worries are pervasive in the news today and we share some of these concerns. We can all see higher prices in food costs, used cars, appliances, and, of course, the value of homes.
Recent readings of inflation in Canada have shown over 3% year over year increases and measures in the US have shown over 5% year over year increases. Covid-19 has caused many of these pressures given disruptions to supply chains and dramatic changes to consumption patterns. While some inflation will subside in the coming months as supply chains improve, there will also be continued pressures from major items such as the price of services (wage inflation) and the high price of shelter. Inflation is notoriously hard to predict, but if it continues to come in hotter than expected, what is the best way to protect and build wealth?
Click here to read more: Cardinal Update – August 2021
DM Portfolio Commentary – Q2 2021
Don’t miss the forest behind the pricey pile of lumber – Following more than a year of what can fairly be described as a health, social, and economic odyssey, we seem to be sitting at or near the cusp of transition on many fronts. The effectiveness and relatively wide distribution of covid-19 vaccines has suppressed the worst effects of the virus and, at long last, allowed us to gradually resume our normal patterns of living and interaction. At the same time, the resulting uptick in activity has brought with it a well-reported jump in inflation and worries that central bankers will shift gears and begin to withdraw the extraordinary monetary support that helped to keep economies
afloat during the worst of the lockdown.
Click here to read more: DM Portfolio Commentary – Q2 2021
