Take the Concentration Risk out of the S&P 500
As the S&P 500 has grown ever more top-heavy, many investors in products tied to the Index have found themselves facing historic levels of concentration risk, the likes of which passive investors have not seen since 1970. The five largest companies have grown to account for nearly 22.0% of the index, potentially leaving investors vulnerable if the companies’ current high valuations fall back to earth. In this session, Invesco will discuss why an equal weight approach to investing in the S&P 500 may provide diversification benefits and reduce concentration risk.
IGM CEO Says Wealthsimple Validates Power’s Fintech Strategy
This week’s fund-raising round for online brokerage Wealthsimple Inc. shows how Power Corp. of Canada’s fintech investments will pay off for the financial conglomerate, IGM Financial Inc. Chief Executive Officer James O’Sullivan says.
World Markets Update: May 10, 2021
Seven of eight indexes on our world watch list posted gains through May 10, 2021. The top performer is France's CAC 40 with a gain of 15.03%, our own S&P 500 is in second is with a gain of 11.51% and Germany's DAXK is in third with a gain of 10.31%. Coming in last is China's Shanghai with a loss of 1.30%.
No Country Has Ever Taxed Itself into Prosperity
One of my all-time favorite quotes comes from Winston Churchill, who was just as witty as he was a great leader: “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
The Latest Look at the Total Return Roller Coaster
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $20,554 for an annualized real return of 14.5%.
Is the Market Still Overvalued?
Here is a summary of the four market valuation indicators we update on a monthly basis.
- The Crestmont Research P/E Ratio
- The cyclical P/E ratio using the trailing 10-year earnings as the divisor
- The Q Ratio, which is the total price of the market divided by its replacement cost
- The relationship of the S&P Composite price to a regression trendline