Well, 2014 turned out to be quite the year – oil got smoked, gold was flat, utility stocks and long term government bonds were among the best performing assets in North America and, once again, no Canadian team made it to the Stanley Cup finals! Going into 2014, consensus thinking had interest rates rising, the yield curve steepening and the market being geared for stock pickers, thanks to falling correlations between stocks. Stock correlations fell to less than 10% amongst the S&P 500 components by late 2014, the lowest level since January 2001, but correlations typically drop when volatility (lowest since 2006) is almost non-existent, since nothing moves. That fact along with being on the wrong side of the interest rate call explains why most fund managers picked the wrong stocks and underperformed their benchmarks this year...

The Fall of 2014 continues to be full of surprises for financial market participants, from the ‘flash-crash’ of U.S. 10-year sovereigns last month, the 47th record closing high experienced by the S&P 500 this month, and to oil now trading at less than US$65 per barrel as I write this commentary. Despite continued concerns about global growth and the potential for deflation, stocks and bonds offered decent gains in November, as talk of global stimulus and better than expected Q3 profit statements eased the minds of investors. The funds at Forge First had a great November...

Boy I'm glad October 2014 is over as we had a disappointing month. The S&P 500 fell 7.3% then gained 8.4% in a span of 6 weeks despite, in my opinion, little change in market fundamentals. True, the last week of October saw the FOMC be more hawkish than expected when they announced the expiration of 3 rounds, 6 years and some US$3.7T in asset purchases, now an eightfold increase to its asset holdings since November 2008. Of course even more surprisingly, two days later, Japan announced its 'shock and awe' stimulus campaign, but by that time most of the move in markets was over. To me, you would have had to have blinders on not to realize that global growth was slowing down, let alone that recession risk remained in Europe. Italy, the world's 7th largest economy, had already confirmed its triple-dip recession (a recession in which three periods of zero or negative economic growth are interspersed with short periods of economic recovery) while the continent's juggernaut Germany had been experiencing a slowdown in its industrial production since the summer. In my view, three developments triggered the volatility in the first half of October...