Category: Uncategorized

by Franklin J. Parker, CFA

The big news this week is China. On the heels of the real estate crisis and in an effort to improve their economic conditions, the Chinese central bank unleashed a wave of policies designed to stimulate the economy. These policies have, of course, also given steroids to a stock market that has languished for almost three years. In addition to cutting rates, the central bank has increased the ability of banks to lend, and has set aside some $114 billion to support share prices, and set up a swap program to support bank lending against stocks. All of this led to an historic 25% jump in share prices in China’s main stock index.

All that said, whether these stiumulus efforts will help support the ailing Chinese property sector and flagging economy remain to be seen. Indeed, Chinese investors who may have otherwise pursued real estate are pushing cash into stocks as a kind of last resort. It also does not appear that the stimulus will have much affect outside of China, so global investors are unlikely to see much benefit (though Australia does tend to move in sympathy with Chinese markets).

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In the US this week we see data on jobs openings (an important figure for the Federal Reserve), the headline unemployment rate for September, and we get a look at the health of US manufacturing. It is nice, for once, to not be talking about what the Fed might do next, and focus instead on economic data!

Chart of the Week

This week we get data on the health of the US manufacturing and services sectors. In both cases, weakness tends to coincide with a weak economy, though manufacturing is much noiser in that regard than services. Manufacturing is expected to post in contraction territory (anything below 50 in this chart is contraction, while above 50 is expansion), while services are expected to post right at breakeven. Weakness here indicates weakness in the broader economy and is yet one more data point that indicates a struggling US economy.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

The Fed decided to go big, cutting rates by half of a percentage point. Markets largely expected this move, yet it was the tightrope chair Powell walked in the press conference that was particularly impressive. In the past, large cuts like this one tend to indicate considerable weakness in the economy, and are usually done in response to an emergency — the COVID recession in 2020, for example. Powell managed to sell a “nothing is wrong and we want to keep it that way” narrative.

If the market rally is any indication, investors agreed with Powell’s “mission accomplished on inflation, let’s keep the good times rolling” message from last week. I, however, am much more cautious on the economy. The underlying data remains weak. A bigger issue for me, however, is valuations. For investors to simply break even at current stock valuations, earnings would have to grow about 23% per year for the next 10 years. Just for reference: the long-term average growth rate of earnings is closer to 8.5% per year.

Overall, I am very cautious. Underlying economic data is weak and valuations are stretched. While it is possible the Federal Reserve achieved an historic feat (no recession), I find it more likely that the economy follows a similar path to its history: a recession is not far behind rate cuts, and slowing economic data typically indicates a recession.

Chart of the Week

I admit to bringing you a wonky chart this week. We are looking at US Stock valuations relative to history. As we can see, the valuation of the S&P 500 is at the higher-end of the scale, but not as high as it has been during, say, the late 1990s. At current levels, valuations are higher than 80% of the time since 1985. The bottom chart shows 1-year earnings growth through time, and we can see that 8.5% is about average for this period, while 20% only happens in about 1 in every 3 years.

In short, expecting earnings growth of 23% for the next 10 years is excessive by any measure.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

It now seems very settled that the Federal Reserve will begin cutting rates at their September 18 meeting, the only question is how much. Investors originally reacted positively but have since turned sour on the idea — in my view, this is because investors are realizing what has been historically true: the Fed cutting rates at this point is a recessionary signal, not a bullish one.

We saw quite a bit of economic data over the past week, and it is overall negative. Even the unemployment rate — which was celebrated last week for ticking down slightly — is signaling a slowdown. On that note, last years jobs figures were revised: the economy added 800,000 fewer jobs than we originally thought last year. That works out to about 67,000 fewer jobs per month, a significant number! This week, we see the all-important inflation data. Markets expect inflation to move down slightly from 2.9% to 2.6%. As usual, this figure could easily push markets around.

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Overall, I am urging caution. The last domino to fall will be the yield curve. As the Fed cuts rates, we expect short-term rates to move back below long-term rates, which is a strong “the recession is here” signal. It also appears that the AI rally has died almost completely: Nvidia, for example, has fallen 28% in just a couple of weeks. And, of course, we haven’t even discussed the volatility that typically happens around a presidential election.

For investors with goals to fund in the next few years, this is likely a time to be much more conservative than you would normally be. For investors with much more long-dated goals, this is much less of a concern, of course. If you would like to discuss how our view affects you and your goals, let’s chat.

Chart of the Week

The Index of Leading Economic Indicators is one of the recessionary signals we follow, although it is among the slowest to develop. The recession signal is when the index peaks and begins to fall. On the chart we have written the number of months between the peak in the index and the beginning of a subsequent recession. Previously, the longest gap between the peak and the recession was 21 months — March 2006 to December 2007. We are now beating that record with 30 months (and counting) since the peak of the index.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

After last week’s heavy selling, global markets have appeared to stabilize — albeit at lower prices than before. Many investors are left wondering whether the selling might continue or if that was just a short-lived downdraft. As I have repeated many times, the overall economic environment appears to favor lower prices rather than higher.

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Employment has worsened recently, and various economic indicators (consumer debt, PMI, the index of leading economic indicators, and the yield curve) all point to a pre-recessionary environment. That said, one bright spot is corporate earnings, which have finally begun to recover (Q2 earnings were up 10.8%, which is the highest in three years), and that may well pave the way forward for higher prices if the rest of the economy catches up.

This week, all eyes will be on Thursday’s inflation report, which is expected to come in around 3%. Figures much different than expectations could easily move markets around, as the Fed’s pace of rate cuts is all investors seem to care about right now.

In sum, this is not the time to be adding risk, in my view, but your goals will determine what exactly that means for you individually. As always, that is something we would be happy to talk through with you.

Chart of the Week

After recovering into the summer, the purchasing manufacturer’s index has begun to show contraction again (in this index, anything below 50 is contraction while above 50 is expansion). While this figure is noisy and can point to contraction outside of a recession, we have never seen a recession with a figure well above 55 or so. Again, this is just another indicator that shows weakness in the overall economy.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Well, so much to a summer break.

Markets around the world are shedding price today with Japan’s main stock index closing down over 12%, and European markets also selling down. And this is after the Federal Reserve signaled last week that rate cuts are likely to begin in September. For years now, investors have looked to central bank rate cuts as a bullish signal. Today, however, it seems that investors have suddenly changed their minds and come to the realization that, in fact, central banks tend to cut rates when the economy is in danger of recession.

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While it is always difficult to tell when “it” begins, this does feel like a strong shift in market senitment. Any regular readers will know that I have been cautious for some time now as the fundamental economic data has not been strong enough to justify such strong run-ups in stock markets. As I have mentioned many times by now, the Federal Reserve cutting rates at this stage is a recessionary signal, not a bullish one. Only now does the broader market appear to agree. And, of course, we cannot forget the trouble brewing in commercial real estate that is only now coming to a head, trouble that will likely spill into the broader global economy.

This is not a time for panic, of course. For our clients, we took steps to mitigate the risk of a recessionary market awhile ago. If, however, you are worried about how your portoflio is positioned, this may well be a good time to get a second opinion — something we would be happy to offer.

Chart of the Week

One recessionary signal that I follow is job openings as a percentage of the population. Typically, before a recession, job openings tend to top out and begin to fall. This metric was heavily skewed by Covid, however. After seeing a very large and sudden increase in job openings, we saw this figure move back down toward its pre-2019 trend (the blue dashed line).

The point is, over the past year or so, this figure has begun to move below its pre-2019 trend levels. In my view, this is recessionary because we are seeing fewer job openings than we would otherwise expect if the economy was still growing in line with the 2010 to 2019 trend.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

This week we get data on the health of the labor market. The unemployment rate is expected to hold steady at 3.9%, with about 170,000 jobs created, while job openings are expected to fall a touch. Unemployment is obviously an important input into the economy, and figures much different than what are expected could easily push markets around.

Last week the big news was the revision to economic growth in the first quarter, which was lower than initially believed — certainly a concern. In addition, we also got a look at the Federal Reserve’s preferred measure of inflation which posted in-line with expectations (and markets rallied on the news).

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Overall, I am still cautious. Corporate earnings are lackluster, and the fundemental drivers of the economy (especially the consumer) are showing signs of faltering. However, this pre-recession phase is taking a long time to play out, and while markets aren’t exactly going to the moon, they are edging higher. Understanding what risks you can reasonably take is very important in this environment, but it also means that we probably shouldn’t be sitting on the sidelines. Exactly how all of this plays out for you and your portfolio is something we should discuss.

Chart of the Week

One of the strange things about the post-Covid economic cycle has been how strongly monetary policy (which is what the Federal Reserve controls) and fiscal policy (which is what the legislature/president controls) have been pulling in opposite directions. Fathom Consulting estimates that, despite the Federal Reserve’s dramatic increase in interest rates, overall policy is still pretty loose. This makes it difficult to pull down inflation, and also increases the likelihood that the economy runs too hot (which is “paid for” with a deeper recession).

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

This week is a light data week, though we do get data on existing home sales, durable goods orders, and consumer sentiment. All of these will give us some insight into the health of the economy.

Earnings season is largley over, and it appears that large US companies grew earnings by about 6%. Again, growth is better than contraction, but it isn’t great — especially when inflation eats away about half of that growth. Speaking of inflation, we also got inflation data last week, and it was slightly better than expected so markets reacted well to that. The real news last week, however, was retail sales which posted no growth. If the US consumer is slowing down, that is likely to trigger a recession, in my view. It has been the US consumer that has kept the economy afloat over the past few years.

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Overall, I think too much hope has been placed in the Federal Reserve to perfectly thread the needle of a growing economy with no inflation. It seems far more likely that inflation is falling because economic growth is starting to sputter. This would be consistent with how past economic cycles come to an end, and I am inclined to err on the side of caution. Of course, exactly what that means for you is something we should discuss because it is entirely personal.

Chart of the Week

We’ve talked a lot about the Federal Reserve, however, it is only one player among many around the globe. That said, almost all of them are expected to begin cutting rates this year. The one exception is the Bank of Japan which is expected to continue increasing rates. Japan was one of the last major economies to have negative interest rates and the reversal of this policy is having large but quiet effects on global flows of capital.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

The big news last week was the Fed meeting. For the most part, they did and said what investors expected: they are expecting to keep rates higher for longer, and a rate hike is very very unlikely. Whereas investors previously thought cuts may come as soon as June, cuts are now expected to begin in September/October.

The unemployment rate ticked up last week — from 3.8% to 3.9%. This is a figure I watch closely because a sustained upward move in unemployment typically indicates a recession is forming. Also of concern last week was the services sector, which posted a slight contraction for the first time since December 2022. Services account for the majority of employment and economic activity (after spending), so a sustained contraction here would be a concern.

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Earnings also continue somewhat better than expected. Most of the companies in the S&P 500 have now reported, and it appears that companies will have grown earnings by about 5%. As I said last week, this is better than a contraction in earnings, but not by much. That said, consumer spending has stayed strong and that is showing up in retailer earnings. Consumer spending, like employment, is a critical variable to watch.

Chart of the Week

One of the most reliable recessionary indicators I watch is the Index of Leading Economic Indicators. As you can clearly see, this index tends to fall leading into a recession. What is so difficult about this economic cycle is the length and depth of the fall without seeing a recession. This index has now fallen for 36 months in a row without seeing a recession — the longest time in history.

Some argue that our traditional metrics are broken and that the expansion can continue without a recession. While I acknolwedge that is possible, I see it as a low probability. The data is pretty telling — a recession seems likely. Exactly when, however, that is the difficult part.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

It is Fed week! The Federal Reseve meets this week, and though everyone expects them to keep interest rates steady, Powell’s commentary on Wednesday could easily push markets around. Investors have been forced to adjust their expectations for rate cuts. Originally, the expectation was that rates would begin to fall in summer, but that has been pushed to the fall of this year.

Last week’s data didn’t help matters: economic growth posted lower than expected for the first three months of the year, and personal consumption expenditures (which is the Fed’s preferred measure of inflation) posted higher than expected. In all, the Fed has a ways to go to get inflation below 2% without a recession.

We are at about the halfway point in corporate earnings, with mixed results. Overall, the 500 largest companies are expected to deliver mediocre earnings growth over this time last year. That is better than a contraction, but not by much. Companies have struggled to grow profits in this environment — in fact, the largest contributor to earnings growth so far has been health care and energy, which tend to be defensive sectors.

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I am again reinforcing my cautionary view. While it does appear the economy is sputtering, it hasn’t fallen into a recession just yet. There is a possibility (though a small one, in my view) that the Federal Reserve will pull off a so-called “soft landing” and get inflation below their target while avoiding a recession. That said, the data is generally not positive. How all of this affects your portfolio is very dependent on your individual goals, and we would love to discuss that with you.

Chart of the Week

This week, we look at a breakdown of the recent economic growth figures for the first quarter. As expected, trade pulled growth down a bit. Of most interest to me was the slowing of retail sales. I have consistently said that the US consumer is keeping the economy afloat. If slower retail sales trend even lower into Q2, the economy will struggle to remain on a growth trajectory.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Earnings season continues. As it stands, big US companies are still expected to deliver no growth in profits this quarter over this time last year. This week we see figures from Meta (Facebook), Microsoft, and Alphabet (Google). To get a sense of how much the top 7 stocks are influencing the market as a whole: if we factor out the top 7 stocks from the 500 companies in the S&P 500, earnings growth goes from flat to -6%. I am concerned that most companies in this market are not delivering any profit growth, and this may be a signal that the recent run-up in prices is driven more by hype than underlying fundamentals.

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The big news last week was Fed chair Powell’s comments that rates would likely stay higher for longer if inflation doesn’t move lower. This spooked investors, and pushed bond yields higher and stock prices down. It is a reminder that policymakers do not appear to be okay with the “it’s good enough” argument. They really are committed to inflation at 2% or less. Investors are now expecting rates to begin dropping in August and November, rather than June (which was the previous expectation).

We get some important economic data this week, including a first look at first quarter economic growth (GDP), earnings, and durable goods. The Fed’s commentary last week was yet another example of investors getting their rate cut projections wrong — officials have consistently kept their policy response more galvanized than markets expected. Combined with the problems in commercial real estate and weak economic signals, I am still cautious.

Chart of the Week

Retail sales are a closely-watched figure lately, and rightfully so. In the US, consumer spending is almost three-quarters of economic growth. Looking at the raw figure, retail sales look like they have been holding up — however, when factoring out the effects of inflation, we see that retail sales have been largely flat over the last 18 monts or so. This is a concern, and may help explain why companies have struggled to increase earnings over that same period.

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The 1 Thing That Makes Retirement Work (or Not)

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This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.