It Was an Ugly One

By Scott Ronalds

In preparing our Quarterly Report, I compiled some numbers that speak for themselves:

• Global stock markets had their worst quarter since Q4 2008

• Greece was down 42%. Italy, France and Germany were all down 25%. Canada was down 12%. Japan was down 11% (all in local currency terms)

• Almost every major European market has a P/E below 10 and dividend yields are commonly north of 4%

• The loonie hit $1.06 US in July and ended the quarter at $0.95

• Oil fell 17%

• Base metals fell by more than 20%

• The Government of Canada 10-year bond yield dropped from 3.1% to 2.1%

• The US Treasury 10-year bond yield dropped from 3.2% to 1.9%

• The DEX Universe Bond Index was up 5.1% - its highest quarterly return since 1996

• North American sovereign bond yields are at levels not seen since the 1940s

For stock investors, it was an ugly quarter. Bond investors, on the other hand, had a heyday. Looking ahead, it seems pretty evident where the opportunities lie. Hint: it’s not government bonds.