Perspective On The Bull Market for Stocks 

Often in conversations with clients and prospective clients the talk turns to the great "bull market in stocks", usually because the business news media is focused on the U.S. stock market and that becomes the perception.

However, if you have a globally diversified and balanced portfolio, depending on how it is allocated, the U.S. stock market may only account for 10-25% of your total portfolio.

As you can see from the chart above all the rest of global stock markets (EAFE = Europe, Australasia and the Far East), have pretty much gone sideways since 2011.

Clearly the best days for the global equity portion in a balanced portfolio were 2009 - 2014 when all indexes moved higher in tandem. Since then, however Canadian and non-North American indexes have virtually stalled. 2015 was a negative year for all stocks.

"Trumponomics" was born in late 2016 and has given a further boost to US stocks since, but the jury is still out on the final outcome of that (where do U.S. stocks go from here?). Clearly it has not been any where as close to as positive for the rest of the global stock market.

Don't forget that bonds are an important part of the balanced equation: The Canadian Bond Index ETF, XBB has provided a (low risk) 4% compound average annual return over the last 10 years:

The All Country World Index (ACWI) ETF (which has a little over 50% allocated to U.S. companies) suggests that a globally diversified equity portfolio should have produced a little over 6.5% compound average annual return over the last 10 years:

In which case a 60% globally diversified equity allocation combined with a 40% Canadian bond allocation should have had something close to a 5.5% combined compound average annual return over the last 10 years.

So yes, the U.S. bull market in stocks has contributed, but don't lose perspective on how a globally diversified and balanced portfolio should perform over a multi-year period.

This bull market cycle will end, when it ends. Likely with the end of the economic expansion cycle (or slightly before). Stock prices will correct, the bull market may end (technically a 20% correction) and there will be bargains to be had.

At High Rock we will be prepared to pick up some of those bargains (by holding an over-weight position in cash equivalents, which by the way, are paying about 1.6%, so not sitting idle), because that is how we invest for our own portfolios and in doing so, invest in the same manner for our private clients.

And as you all know, historical returns are in no way a guarantee of future performance, but at High Rock we work darn hard to  give our clients the best possible risk adjusted returns over a multi-year period.

We also do it with a real (not "lip-service") focus on our clients: excellent service at a very reasonable cost.

You won't find that at your bank or large financial institution.