Stephen Jenkins wrote an article for ACPM's The Observer magazine discussing why investors may want to consider re-balancing away from an over-exposed U.S. stock market.
While auto original equipment manufacturers and suppliers have been at the center of discussions, other major industries are also feeling the effects of tariffs. In this installment of The Home Country Bias, we will look into the U.S. agriculture sector – and on multiple fronts.
1966-1982 was a period of high inflation and weak economic growth: in short, stagflation. More recently, during the four years since rates bottomed and subsequently rose from the lows in the summer of 2020, the market has delivered a stealth value recovery in major markets outside of the U.S. (the U.S. market is distorted by the Magnificent 7 stocks). This seems reminiscent of the early stages of the 1966-1982 period.
Since the U.S. President first threatened tariffs on Canadian goods, there has been a change in sentiment among Canadians that has sparked our investment team’s interest. We’re launching a new series – The Home Country Bias – to address questions investors may have as we continue to navigate through an uncertain environment.
Scott joined Sionna in 2025 to manage compliance at the firm. Scott has more than 25 years of experience in the financial services industry, most recently as Chief Operating Officer and Chief Compliance Officer at an exempt market dealer firm. Previously, Scott managed both Canadian and U.S. equities for institutional and high net worth private client mandates. Scott is a CFA charterholder® and a member of CFA Society Toronto.
It’s challenging to measure the full impact of Trump’s statements on the Canadian stock market with any accuracy. Protectionist policies will likely be front and center for the new U.S. administration, and as their largest trading partner, Canada will be a focus.
Today, the S&P 500 Index and the MSCI World Index are increasingly concentrated on a small group of U.S.-based technology related stocks. Looking back at market history, we believe that risk has increased in portfolios benchmarked to these indices, since expectations on these stocks are high and so too are their valuation multiples, setting up for disappointing future returns.
Over the last four years, equity markets have seen a stealth value bull market. However, despite this outperformance, value managers have not yet seen large asset allocations being directed to this turnaround story. One of the possible drivers of the lack of interest, is the fascination with private equity (PE). Warren Buffett at his 2019 AGM commented, “We have seen a number of proposals from PE funds where the returns are really not calculated in a manner that I would regard as honest. If I were running a pension fund, I would be very careful about what was being offered to me.” An audacious quote, even from Warren, and an idea investors might be mindful of as they make asset allocation decisions.
Kim Shannon was a guest on Starvine Capital's podcast where she discussed her +40 years of industry experience, the importance of having mentors and how to navigate challenging times in market history.
Kim Shannon outlines a few things we know for sure as the market makes daily new highs.