Ryan Lewenza, CFA, CMT V.P. and U.S. Equity Strategist at TD Wealth, has prepared a report which asks and answers the question, "Are we witnessing the sequel to 2008?" Below are the highlights from the report, and the complete report for you, without further comment.
Highlights:
- While we are witnessing some unnerving similarities, there are a number of differences which make us believe that the U.S. financial markets are in a better position to handle exogenous shocks, or another recession, should that transpire.
- The key differences in our view are: 1) corporate America is in much stronger financial shape than it was in 2008, 2) stocks are much more reasonably valued at present, making them less susceptible to valuation compression if the current macro headwinds persist, and 3) U.S. banks are in a much stronger position than they were heading into 2008.
- There are times to increase risk within portfolios, focusing more on cyclical names that will outperform their defensive counterparts. We believe now is the time to focus on capital preservation, by reducing risk in portfolios and concentrating on high quality, dividend paying stocks.
