Top Links: Investors aren’t as dumb as brokerage industry wants to believe

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning.

Merrill Lynch published a couple of interesting charts on global oil prices but in this, one of the last Fridays of the dog days of summer, nothing matters near as much as Fed chairwoman Yellen's speech in Jackson Hole Wyoming. Global markets are driven by central bank policy more than ever before, and any hint of either dovishness or hawkishness form the chairwoman will move markets. Since very few traders are around and liquidity is low, any clear directions from the Fed are likely to cause considerable market volatility. The aggregate market response to the speech should be visible in U.S. two year bond yields.

"September Fed Bets Jump to 1-in-3 From Zero as Yellen Speech Key" – Bloomberg

"Yellen Speech May Touch on Falling Long-Run Rate Outlook: Chart" – Bloomberg

"Dollar Edges Lower Before Yellen as European Stocks Fluctuate" – Bloomberg

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Reuters' Chris Johnstone tweeted two Merrill Lynch charts showing that global oil inventories remain extremely high, even relative to 2015, but that global demand for oil is rising faster than expected. Taken together, the charts indicate that the Energy Information Agency's prediction of supply and demand rebalancing, and thus higher commodities prices, for 2017 are at least closer to accurate than oil bears' forecasts,

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TD Bank published a strong set of profit results this week, but CIBC research is downgrading them anyway. CIBC noted that TD's U.S. operations did show faster growth than domestic operations but,

"outgrow the Canadian business" … is not hard when that segment puts up just over one per cent year over year growth… we expect and need better from the Canadian business relative to its peers."

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A number of experts are cited to disavow the myth that investors are terrible market timers and perform much better with a financial adviser,

"Academic research does suggest investors have poor timing. Studies show they underperform their investments by one to one-and-a-half percentage points a year, Emory's Dichev says.

But it's not clear that individual investors are any worse at timing than the pros. Hedge funds, mutual fund managers, and institutional investors all have trouble.

Well-paid hedge fund managers have lagged the market in recent years. Dichev and Harvard University professor Gwen Yu found in a 2011 study that investors in those hedge funds, who tend to be large, sophisticated institutions or wealthy individuals, experienced actual returns that were three to seven percentage points lower than the official fund returns."

"Are You as Stupid as Your Financial Adviser Thinks?" – Bloomberg

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Diversion: There's some colourful language in this video but it's so great I couldn't let it stop me from including here. "Best performing weirdo" is a mash-up video of hundreds of crazed movie characters that stole scenes from major actors,

"Best Supporting Weirdo" – Youtube

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