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The tide is about to turn for markets as the easy-money decade ends.

Swept along by super-easy money, investors have debated for years how world markets will react when this central bank largesse inevitably ends. Now the liquidity tide is about to turn, and they have only a few months to adjust.

The world’s four biggest central banks – the U.S. Federal Reserve, European Central Bank, Bank of Japan and the Bank of England – have pumped around US$13-trillion into the global economy since the crisis year of 2009, sharply expanding their own balance sheets of financial assets:

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While markets reached dizzying heights during the easy money era, that flood will dry up by the year-end. For the first time since 2011, the central banks are expected to suck out more cash in 2019 than they pump in.

The ECB will stop additional bond buying at the end of this year, and while the Fed has been shrinking its balance sheet for almost a year, it will step up the pace from October, removing US$50-billion a month from markets. Bonds worth US$470-billion will roll off its balance sheet next year

After a near decade of money-printing and zero interest rates, the shift for markets will be momentous.

Steve Donze, senior macro strategist at Pictet Asset Management, estimates a net $100 billion will be removed from global liquidity next year.

Central banks will go from generating half a trillion dollars this year on an annualized basis, “to zero by the end of 2018, then negative next year...a definite tipping point,” he said. “That makes 2019 a dangerous year for financial assets.”

Read the full version of this Reuters story by clicking here.

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you, you can sign up for Globe Investor and all Globe newsletters here.

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Stocks to ponder

Automotive Properties Real Estate Investment Trust (APR.UN-T). This stock appears on the positive breakouts list (stocks with positive price momentum). It offers investors an attractive yield of over 7 per cent, which appears sustainable given its payout ratio of 88 per cent. Toronto-based Automotive Properties REIT held a portfolio of 40 auto dealership properties and one development property as at June 30. These properties are located in major cities across the country, specifically the Greater Vancouver Area, Calgary, Edmonton, Regina, the Greater Toronto Area, and Greater Montreal Area. Jennifer Dowty reports (for subscribers).

Stars Group Inc. (TSGI-T). RSI buy signals have worked well in uncovering profitable buying opportunities for Stars Group stock in the past 24 months, although this is somewhat to be expected given the strong performance for much of the period. Stars Group was consistently oversold through October 2016 but only a marginal rally followed (importantly, no major downdraft occurred either). After that, the buy signal in August 2017 predicted a major 52-per-cent rally. Stars Group has endured a major sell-off in recent weeks, falling 26 per cent from recent highs. The price is now below the 200-day moving average which indicates a possible breakdown in upward trend. Scott Barlow looks at the charts and the most oversold and overbought stocks on the TSX.

The Rundown

Strengthened standards proposed for certified financial planners

Certified financial planners could soon be held to an updated set of standards as the Financial Planning Standards Council proposes several changes that would enhance an adviser’s duty to put a client’s interest ahead of their own, including prospective clients. Last week, the Financial Planning Standards Council (FPSC) – which oversees the Certified Financial Planning (CFP) designation for approximately 18,500 individuals in Canada (excluding Quebec) – published a set of proposed amendments to its existing rules for public comment. Clare O’Hara reports.

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WisdomTree launches two new ETFs focused on Asian equities

Canadian investors looking to broaden their exposure to Asian equities can now do so through two new Asian-focused exchange-traded funds launched earlier this month by WisdomTree Asset Management Canada Inc. On Aug. 3, WisdomTree Asset Management began trading two new funds on the Toronto Stock Exchange: WisdomTree Japan Equity Index ETF (JAPN) and WisdomTree ICBCCS S&P China 500 Index ETF (CHNA.B). Clare O’Hara reports.

Is it time to add cryptocurrencies to your portfolio?

It seems everyone is talking about Bitcoin these days. And while this digital currency is usually associated with the get-rich-quick crowd, there are signs it is moving into the mainstream. Nearly one-third of high-net-worth investors are considering investing in major virtual currencies such as Bitcoin and Ethereum as long-term investments, according to the latest World Wealth Report from Paris-based Capgemini. But, is this an investment that’s too risky for you? Dale Jackson explores.

Ensign’s takeover offer dramatically undervalues Trinidad Drilling. Here’s why

As a shareholder of Ensign Energy Services Inc. (ESI-T) Robert Tattersal says he is in favour of management’s recent lowball offer of $1.68 cash for all the shares of Trinidad Drilling Ltd. (TDG-T) . But as a shareholder of Trinidad Drilling, he believes that the offer dramatically undervalues the company, and he won’t be tendering my shares anywhere near the current offer price. In fact, less than four months ago he wrote in the Report on Business that Trinidad Drilling, which was then trading at $1.75, could be bought for less than the collateral value of its drilling rigs, estimated at about $3.00 a share.

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Top Links (for subscribers)

Eight new questions for first-time homebuyers

Others (for subscribers)

Friday’s analyst upgrades and downgrades

Friday’s Insider Report: Companies insiders are buying and selling

Others (for everyone)

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First crack at Musk could give top Tesla funds an edge

Mawer: Six stocks that offer opportunity for investors amid the correction in emerging markets

TSX earnings scorecard: How second-quarter results have fared so far

Chinese internet stock sell-off may shake faith in FANGs

Number Crunchers (for subscribers)

Uncovering hidden gems among U.S. momentum stocks

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Ask Globe Investor

Do you have a question for Globe Investor? Send it our way via this form. Questions and answers will be edited for length.

What’s up in the days ahead

We learned this week that Canadian investors can now buy and sell stocks and ETFs commission-free at Wealthsimple. This comes at a time when products in the wealth management industry are being launched with rock-bottom fees. But there’s a downside to the race in cutting investor costs. Dan Bortolotti will explain.

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

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Compiled by Gillian Livingston

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