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Why Should I Invest?

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There are only two ways to make money in our modern world:  by working, for yourself or someone else, and/or by having your assets work for you. If you keep your life savings in your back pocket or under a mattress, instead of investing, the money doesn’t work for you and you’ll never have more than what you save or receive through inheritance. Conversely, investors generate money by earning interest on what they set aside or by buying assets that increase in value.

It doesn’t matter how you do it. Whether you invest in stocks, bonds, mutual funds, optionsfutures, precious metals, real estate, a small business or a combination of assets, the objective is the same: to make investments that generate additional cash. As the old expression goes, “Money isn’t everything but happiness alone can’t keep out the rain.” So, whether your goal is to send your kids to college or to retire on a yacht in the Mediterranean, investing is essential in getting where you want to go in life.

Managing Investment Goals

Investment goals diverge, depending on age, income and outlook.  You can further sub-divide age into three categories, young and starting out, middle aged and family building, old and self-directed. These segments often miss their marks at the appropriate age, with middle-aged folks considering investments for the first time or the elderly forced to budget, employing the discipline they lacked as young adults.

Income provides as the natural starting point for investment planning because you can’t invest what you don’t have. The first career job issues a wake-up call for many young adults, forcing decisions about IRA contributions, savings or money market accounts, and the sacrifices needed to balance growing affluence with the desire for gratification. Don’t worry too much about setbacks during this period, like getting overwhelmed by student loans and car payments, or forgetting that your parents no longer pay the monthly credit card bill.

Outlook defines the playing field on which we operate during our lifetimes and the choices that impact wealth management.  Family planning sits at the top of this list for many individuals, with couples figuring out how many kids they want, where they want to live, and how much money is needed to accomplish those goals. Career expectations often complicate these calculations, with the highly-educated enjoying increased earning power while those stuck in low level jobs are forced to cut back to make ends meet.

It’s never too late to become an investor. You may be well into middle age before realizing that life is moving quickly, requiring a plan to deal with old age and retirement. Fear can take control if waiting too long to set investment goals but that should go away once you set the plan into motion. Remember that all investments start with the first dollar, whatever your age, income or outlook.  That said, those investing for decades have the advantage, with growing wealth allowing them to enjoy the lifestyle that others cannot afford. 

Articles that will help you on your way: Basic Investment Objectives, Ten Tips For The Successful Long-Term Investor and Ten Books Every Investor Should Read.

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Investment

Why the world's wealthy are investing more in companies that care, Aecon's tumble and where Prem Watsa sees …

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A global investment club for the wealthy whose members aim to bring about social or environmental change as well as making a profit has grown by more than US$1-billion in two years, according to a report.

Toniic said its members now have a combined US$2.8-billion in what’s considered impact investments – capital placed with companies and organizations that can demonstrate they benefit society or the environment – up from US$1.65-billion in 2016.

Members, who include families and foundations as well as wealthy individuals, said the industry was becoming more mainstream.

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“Impact investing is not some minority sport by some hippies on the fringes,” James Perry, chief executive of the Panahpur charitable foundation, which has investments worth 4 million pounds (US$5.34-million).

Toniic found 82 per cent of members who participated in its study had portfolios that met or exceeded their financial expectations according to the report, released on Thursday.

A majority said impact investments yielded returns on a par with traditional investments.

Perry cited Auticon, a British IT consultancy that helps integrate employees with autism into workplaces, as a successful impact investment in the Panahpur portfolio. Auticon’s shares rose in value recently after it expanded into other countries.

“Clear dissatisfaction in the way the economy is going and emerging data around changing ecosystems have woken people up. People are seeing they can’t carry on like they are,” he told the Thomson Reuters Foundation.

The amount of money going into impact investing is rising by about 18 per cent a year, according to the Global Impact Investing Network, whose 2017 survey found the market was worth at least US$114-billion.

However Damian Payiatiakis, head of impact investing at Barclays, said the industry was still in its infancy.

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“The industry has progressed from the stage of visionary innovators and is now entering one of early adopters, but the majority of investors aren’t yet aware of or being offered this opportunity,” he said.

— Lee Mannion, Thomson Reuters Foundation

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.

Stocks to ponder

CI Financial Corp. (CIX-T). The S&P/TSX Composite was more or less flat for the trading week ending with Thursday’s close, easing lower by 0.2 per cent, but the benchmark remains in overbought, technically vulnerable territory according to Relative Strength Index (RSI). The RSI level of 73 is just over the 70 sell signal and miles away from the oversold RSI buy signal of 30. There are four oversold, technically attractive index constituents trading below the RSI buy signal led by Aecon Group Inc. Dorel Industries Class B, CI Financial Corp. and Extendicare Inc. round out the list. Scott Barlow focuses on CI Financial as he was surprised that a company with its fortunes leveraged to market performance was not following the benchmark higher. (For subscribers).

Quebecor Inc. (QBR.B-T). This stock appears on the positive breakouts list with its share price closing at an all-time high on Thursday. Analysts have positive outlooks on the security with 14 buy recommendations. Earlier this month, the company announced a change to its dividend policy, which is expected to result in meaningful increases to its dividend over the next few years. Quebec-based Quebecor Inc. is a telecommunications and media holding company with an 81.5-per-cent interest in Quebecor Media Inc. Quebecor has three key business segments: telecommunications with its core asset, Videotron Ltd.; the media segment, with the television broadcaster, TVA Group; and its smallest segment, sports and entertainment. Jennifer Dowty reports (for subscribers).

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Aecon Group Inc. (ARE-T). Aecon Group Inc. didn’t work as a short-term takeover target. Perhaps the stock will look better as a long-term investment. The construction firm had seen its share price soar to a 10-year high of $20 in April, ahead of a proposed $1.5-billion takeover by the financing unit of China Communications Construction Co. Ltd. (CCCC), which is majority-owned by the Chinese government. But on Thursday, the shares tumbled to levels seen 4½ years ago, down 15.4 per cent for the day, after the Canadian government blocked the deal on Wednesday, citing national security. David Berman reports (for subscribers).

Watsa shuns China as Fairfax looks for investment in India, U.S.

The Rundown

Watsa shuns China as Fairfax looks for investment in India, U.S.

Prem Watsa, the billionaire head of Fairfax Financial Holdings Ltd., sees plenty of opportunities for investment in the U.S. and his native India. He’s less interested in the other Asian powerhouse. “In China, we are less invested,” Watsa said in an interview with BNN Bloomberg Television Friday. “We like democracy. We like business-friendly policies.” Watsa, who emigrated from India 46 years ago, is most excited about the opportunities being created there due to the policies implemented by Prime Minister Narendra Modi.

Top Links (for subscribers)

Economist predicts nasty Canadian recession in 2020

Others (for subscribers)

Friday’s analyst upgrades and downgrades

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

Friday’s small-cap stocks to watch

Others (for everyone)

Oil prices slump as OPEC and Russia consider output boost

Number Crunchers (for subscribers)

Nine U.S.-listed small-caps poised to outperform their large-cap rivals

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

Ian McGugan takes a look at rising U.S. interest rates and what that means to emerging markets and the rest of the world.

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

Click here share your view of our newsletter and give us your suggestions.

Want to subscribe? Click here to sign up or visit The Globe’s newsletter page and scroll down to the Globe Investor Newsletter.

Compiled by Gillian Livingston

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Investment

Feds investing $8.1M in Charlottetown Airport runway upgrades

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The federal government is investing $8.1 million for improvements to the Charlottetown Airport.

The project will focus on the airport's main runway and connecting taxiways, according to a government news release.

Major components of the work include grading and drainage improvements, replacement of stormwater collection infrastructure, and repaving.

The project is expected to create about 180 jobs during construction, the government said.

"Transportation systems are a vital part of the Prince Edward Island economy and the investment announced here today will foster long-term prosperity in all corners of the province," said Cardigan MP Lawrence MacAulay.

"These improvements at the Charlottetown Airport will give Islanders more transportation options while helping businesses get more products to market."

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Why Warren Buffett Takes His Investing Tips From a Baseball Legend

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2 min read


What do the stock market and baseball have in common? 

Entrepreneur Network partner Phil Town speaks about a famous quote from Ted Williams that Warren Buffett loves to quote, which involves not "swinging" at good "pitches." 

Williams always swung at the "fat pitches," which to him meant being choosy about which pitches to go for. Town distills this information as meaning even though a company is technically a good company, it may not be the right company for you.

Town notes that to successfully go after a "fat pitch," you must be willing to stand still with cash in your pocket. Simultaneously you should also be researching the companies you are intersted in. Research is integral to gaining a better understanding and thus be more educated to invest. And this sort of study is further aided by discipline and consistency.

Click play to hear more about baseball and investing.

Related: The One Thing Millennials Can Do to Live Life More Comfortably in the Future

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Opinions expressed by Entrepreneur contributors are their own.

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