New survey suggests advisors’ bullish enthusiasm for the markets could be misplaced.
Horizons ETF’s quarterly sentiment survey shows that while advisors and investors are enthusiastic about U.S.equities, there's no less than a 15 percentage-point divide between the two groups.
So why is this?
WP went to a couple of veteran Quebec advisors to discuss the state of affairs when it comes to the financial markets.
Paul Marchand is a principal in Montreal’s Marchand, Fairchild, Blais Inc. He’s been in the insurance business for 47 of his 67 years on earth. Operating under the Sun Life banner, Marchand makes no apology for the fees he charges or the institutions that he utilizes to invest his clients’ fortunes.
“Now more than ever,” says Marchand, “[Institutional investors] are needed because right now if you start investing and you put money into TD Bank
, the market went down 230 points yesterday. TD Bank also dropped. Does that mean that TD is a terrible stock? So, I think the institutional boys are going to be a much better guide.”
What does this actually mean?
Marchand sees a great deal of volatility in the markets and believes professional money management is the way to go when investing one’s fortune. Having spent a half-century in the financial services business Marchand states, “The more I learn the more I don’t know.”
At the end of the day Marchand understands that his best investment is himself. As a result he’s not nearly as confident about the markets as many of his peers in the investment industry.
“You really have to watch yourself.”
Still on the island of Montreal WP had the opportunity to speak with Bill Bliss of Braley Financial.
Although Bliss feels the markets are going to experience a correction in the next year or two, he doesn’t feel it will be a big one. Certainly the Horizons ETFs survey would suggest that most advisors and investors see reasonably smooth sailing ahead.
But, if you’re going to choose between Canada and the U.S., Bliss feels “the U.S. is the way to go.”
So, why are advisors more bullish than investors?
The simple answer is that advisors have much greater exposure to institutional investors who’ve moved on from the 2008 crash while individual investors are still licking their wounds.
Once bitten, twice shy.