As the first half of 2022 draws to an end, the news about inflation and the stock market performance has not given investors anything to cheer about. Reuters reported that as of Wednesday, the S&P 500 was on track to have its worst first-half outing since 1970, recording a 20-per-cent drop, which translates to a loss of about $8.2 trillion in market value.
Also the U.S. Treasuries, used as the global fixed income benchmark, have recorded total year-to-date losses of 11 per cent. According to an ICE BofA index tracking seven- to 10-year Treasuries since 1973, the performance of the U.S. Treasuries sets them on course for the worst year on record.
In Europe, the news is not more comforting. Deutsche Bank estimates single out this first half as delivering the worst first-half performance since 1788. Seven- to 10-year ICE BofA indexes going back to 1986 show that German bonds have lost 12.5 per cent, and overall euro zone government bonds have lost 13 per cent.
Stocks and bonds had suffered heavy losses. The markets had witnessed dizzying swings which pumped up the blood pressure of many an investor. Central banks had gone into panic mode pushing rates up in a bid to tame inflation, which has risen higher in most countries than has been seen in about 40 years.
There are fears that most countries will go into recession. Statistics Canada announced recently that inflation rose from its 6.3 per cent figure of April to 7.7 per cent in May, which got Canadians more ill at ease.
Expert projections and permutations have failed. Expert advice has fallen through. Nothing is certain anymore. For example, the popular strategy of buying stocks on weakness, which rewarded investors for the better part of the last decade, has not worked this time around. The US benchmark index has seen three rebounds of at least 6 per cent this year that have reversed to fall below its prior low point. The latest bounce has the index up about 3 per cent since its mid-June low.
The other investment approach which had worked in the past was the so-called 60/40 portfolio, which has failed this period too. The approach is one in which investors count on a blend of stocks and bonds to protect against market declines, with equities rising amid economic optimism and bonds strengthening during turbulent times.
At an uncertain time like this, one thing that may work for every investor this period is relying on one’s gut feeling.
Inflation is outside your control. There is little you can do about it. But if you refrain from panicking, you will think better, take more informed decisions and save yourself from impetuous decisions that may hurt your finances deeply. Not panicking or worrying will also ensure that you don’t attract certain illnesses or moods to yourself.
As long as you are taking the required steps of keeping informed, saving, reducing expenses, investing, and making extra money, you several steps ahead of many people. Just get yourself distracted by things that may you happy and busy like sports and exercises.
Don’t keep excess cash
No matter how bad the stock market is, don’t be tempted to keep too much cash where you can easily have access to it. There is always a high temptation of using it to solve “pressing and important problems.” Once the money is gone, it is gone forever, except it was invested. Furthermore, the cash with you will continue to lose value as inflation rises. The stock market may be down now, but it won’t be down forever. However, ensure you have enough cash to take care of emergencies in this uncertain period.
Don’t tie up your funds in long-term bonds
Even if you choose to invest in bonds or certificates of deposits, don’t tie up too much of your money in the long term. As the central bank raises interest rates in response to inflation, you may miss out on higher interest rates if you go for the long term.
Finally, watch, keep abreast of happenings, and get prepared for whatever the future brings. This condition will not last forever.
With this in mind, let us now turn to the top five stories that our readers found most interesting for the week.
Baselode Energy Corp. (TSXV:FIND) provides update from the ACKIO Discovery
Baselode Energy has provided an update on the ongoing diamond drilling program on the ACKIO high-grade uranium discovery, Hook project.
The project is located in the Athabasca Basin area, northern Saskatchewan.
James Sykes, CEO, President and Director of Baselode, highlighted the update with Daniella Atkinson.
Baselode Energy Corp was up 5.56 per cent, trading at $0.76 as at 11:43 a.m. ET.
Green River Gold (CSE:CCR) provides Quesnel exploration update
Green River Gold has provided an update on the drilling program at its Quesnel Nickel/Magnesium/Talc project in British Columbia.
The first phase of the drilling program will consist of 10 to 12 holes.
Green River’s President and CEO, Perry Little, sat down with Sabrina Cuthbert to discuss the update.
Green River Gold Corp gained 8.33 per cent, trading at $0.065 as at11:04 a.m. ET.
Mantaro Precious Metals (TSXV:MNTR) extends five veins at Golden Hill
Mantaro has completed four diamond drill holes at its Golden Hill Property in Bolivia.
Exploration has focused on the La Escarcha gold deposit with 720 out of 5,000 m drilled thus far.
The company expects assays in approximately six weeks.
CEO Craig Hairfield sat down with Daniella Atkinson to comment on the ongoing drill program.
Mantaro Precious Metals Corp was up 4.35 per cent, trading at $0.12 as at 11:21 a.m. ET.
Granite Creek Copper (TSXV:GCX) discusses updated PEA
In 2017, Copper North Mining commissioned JDS Energy & Mining to complete a Preliminary Economic Assessment (PEA) for the Carmacks Project.
President & CEO Tim Johnson sat down with Sabrina Cuthbert to discuss the significance of the latest PEA, how it differs from the 2017 PEA and the role it will play in reevaluating the company.
The updated PEA released in March includes a resource estimate of 36 million tons, three times the amount contemplated in the original PEA.
Granite Creek Copper Ltd was down 5.56 per cent, trading at $0.085 as at 12.17 p.m. ET.
Tocvan Ventures (CSE:TOC) closes $5.1M private placement
Tocvan Ventures Corp. has closed a private placement with an institutional investor for gross proceeds of $5.125 million.
Tocvan issued 3,200,000 units.
The company has also issued 2,501 convertible loan notes for $1,000 per note, bearing an interest rate of 1 per cent per annum.
Brodie Sutherland, CEO of Tocvan, sat down with Sabrina Cuthbert to discuss the capital raise.
Tocvan Ventures Corp was up 1.19 per cent, trading at $0.85 at 12:18 p.m. ET.
Enjoy your Canada Day holiday!