What a week we had in the markets, the ebbs and flows of the stock market can be overwhelming at times and I am here to share with you the simplest advice I have ever received :

Stay the Course!

-John C. Bogle



Weeks Market Movement, Friday, September 18, 2020

S&P 600



S&P /TSX 160


















CAD 10 Y



USA 10 Y



Market Movers

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Investors should be aware that when they invest in the small-cap industry they are exposed to more market risk, this should not be seen as a reason not to buy the common stock of these businesses but as an indication that there is great potential to make great buying choices and accumulate wealth.

The saying goes on Wall Street :

To gain higher returns the investor should take on more calculated risk”

How true this depends on the person asked, but most would agree.

The Small Caps this week did well for their shareholders the top gainers increased in value on average by about 38% & the “losers” lost about 15% for the day.

This shows the bullish sentiment going into the end of the week although the market did have some low days.

Today’s Big Winner was :

Kanadario Gold Inc(KANA.V)

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The Company is a mineral exploration company focused on the exploration and development of the Cameron Lake Property, located in the west-central part of Quebec.

The company is particularly interested in Gold reverses and has benefited from the recent run the price of gold as investors move to the inflation-protected assets.

This run is gold is due to the economic theory that Gold provides an investor with protection during a number of very different market environments, including high inflation, political uncertainty, currency devaluation crisis, and periods of negative real interest rates. Gold is like an insurance policy for the portfolio, protecting against heavy inflation, unlike other assets that lose purchasing power. ( For more details on this you can take a look at an article I did where we tested this theory.)

Historically companies involved with gold have experienced a rise in their stock price as the price of gold appreciates from higher demand. This is what might be pushing their price higher as the business has not published any news since October 2019.

Some inventors believe that getting exposure to gold is “worthless” and they would rather own a mining and exploration company

Their theory goes :

Gold is an asset that does not produce anything thus has no intrinsic value that compounds over time, once you have a gold coin it does not compound and turn into 2 gold coins. The sophisticated investor would rather own a competitive gold mining firm like Nomad Royalty (ticker symbol: NSR.T) that earns a profit from the sale of its gold inventory and reinvests the earnings into more productive endeavors thus increasing’s its intrinsic worth.

News of the Week

Macroeconomic News

  • Canadian payment firm Nuvei makes history with most valuable tech IPO ever on TSX
  • Bank of Canada Senior Deputy Governor Carolyn A. Wilkins will not seek the second term

Microeconomic News

Up-and-coming news to watch out for and why?

Looking ahead for the week we have some very interesting economic news coming out that affects the housing sectors and the general stock market.

  • New Housing Price Index YoY AUG

In Canada, the New Housing Price Index (NHPI) measures changes over time in the contractors’ selling prices of new residential houses, where specifications of each house remain the same between two consecutive periods. The announcement will be on Monday, September 21, 2020

  • Average Weekly Earnings YoY JUL

In Canada, average weekly earnings (including overtime) refers to the gross taxable payroll (including overtime) divided by the number of employees. The announcement will be on Thursday, September 24, 2020

  • Budget Balance JUL

The government budget balance is the difference between government revenues and expenses, excluding public debt charges. The announcement will be on Friday, September 25, 2020

As the earnings numbers come in, we get a clearer look at how companies have performed during this last quarter. This shows us how healthily the micro economy is.

Economist expects Earnings for non-farm works to be up by 4% as the economy recovers and unemployment decreases.

Housing starts are also expected to be up by 1.7%, this is always a good indication of consumer confidence increasing as the economy starts up again providing work for the construction industry, which is really important for the longevity of the Canadian economy.

Full Disclosure: Nomad Royalty is an Equity Guru marketing client.



Written By:

Taku Ndachena

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