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Bitcoin, other cryptocurrencies a potential long-term investment, says Timmins financial advisor – CTV Toronto

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TIMMINS –

Cryptocurrencies are continuing to gain mainstream attention, and a financial advisor in Timmins told CTV some northerners have been asking whether to invest.

Jason Gervais said with thousands of digital coins available now, he believes crypto is the future, though he adds that it’s a high-risk market.

People are able to purchase the actual coins through various online marketplaces, but Gervais suggests beginners start with looking at federally-regulated ‘exchange traded funds’ (ETFs) on the Toronto Stock Exchange that track the prices of the two most popular coins — Bitcoin and Ethereum.

“It is high-risk, but if people want to start investing in cryptocurrencies, there’s two of them that are now available on an actual trading platform,” Gervais said.

Investing in crypto ETFs is a safer option, he said, since purchasing the actual coins can open less-experienced people up to online theft.

Gervais wouldn’t suggest the market for people with goals like retirement, but he believes people thinking in the long-term may find it rewarding.

Timmins resident Robert McColeman is fairly deep in the crypto market, having invested in several coins. He said with countries and banks now looking into digital currencies and the technology that powers them, it’s exciting to specify late about the future of crypto.

 

“Right now, all of us regular people are trying to guess which (coin) is going to be the winner or if it’s going to be involved in the future,” McColeman said.

The prices of cryptocurrencies can fluctuate quickly and drastically, making it an unreliable form of payment for goods and services, said Gervais, making it primarily an investment opportunity.

He would advise strongly against pouring your life savings into crypto, but Ryan Rheault claims he was able to quit his job thanks to investing in digital currency.

Rheault said he’s involved in a community of other crypto investors and offers advice to others looking to get started, saying it’s been a fulfilling journey for him.

“It’s been life-changing,” Rheault said. “It’s given me so many rewards and so many achievements in life that I never thought. Like I was working at Detour (Mine) for the longest time, I never thought I could get out of work.”

That said, the idea of cryptocurrencies is not for everyone and some northerners are content with leaving the emerging market alone.

That’s the case for Timmins resident Jason Mark, who said some of his friends invest in crypto, but he doesn’t feel the need to explore it.

“I just kind of stick with the cash that I can see, rather than this online stuff,” Mark said.

Investors like Taran Bassan said starting small and slow through online trading platforms like Wealthsimple and Robinhood can allow people to test the cryptocurrency waters and see if it’s for them.

That’s how she got her start, she said.

“I think I only put a hundred dollars in the first time around and just kind of played around with it,” Bassan said. “I think that’s how everybody should start off, just playing around with it.”

Gervais notes that he normally doesn’t recommend investing in cryptocurrency to his clients, mainly consisting of seniors.

But for people who have the time and are willing to spare the money, he advises that people only invest what they are willing to lose.

“(Crypto is) not going anywhere, I’m a believer in it, but it’s definitely volatile,” Gervais said.

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U.S. equity portfolio manager explains seven-step investment process – Wealth Professional

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The third step is identifying growth drivers. Sanders carries with him words from an old mentor – ‘always understand what drives top-line revenue’. For example, when Sanders first invested in Amazon back in 2003, when it was $17 a share, online penetration of retail sales in the U.S. was only 3%, but he believed that number was going to grow substantially over time. He met with Jeff Bezos who explained his competitive advantages – widest selection, lowest prices and convenience – completed his analysis and bought the stock. Sanders said: “That’s an example of a company that had a clear growth driver – penetration of its end market with offline retail going online.”

The fourth step is a financial statement analysis, getting into the nitty gritty of the balance sheets from a cash-flow perspective, while the fifth step is a management team assessment. Sanders is not interested in a company’s latest shiny product but instead wants to understand the key assumptions that go into his team’s investment process. ESG factors are also analysed at this stage, including how the board is made up and the compensation model.

Step six is critical and involves Sanders laying out four scenarios – best case, base case, bear, and worst, which are all five-year minimum discounted cash-flow models. The base case is what he thinks the stock is worth today, an estimate of cents on the dollar or intrinsic value. If Sanders believes a stock is worth $100 and it’s trading at $70, it’s 70 cents. He said: “We have this list of companies we’re following, and it’s ranked by cents on the dollar every morning. When stocks get to 70 cents, we recheck the analysis and we buy, and when stocks get up to 100 cents, we sell. That, in a nutshell, is our process.”

Every quarter these values are updated, in step seven, so it’s a moving target, underpinned by deep fundamental research that involves a 10-person team looking at one stock at a time before presenting it the team for debate.

While many investors focus on what is happening that quarter, Sanders told WP he thinks longer term, an approach illustrated by the crash of March 2020. He saw a health crisis, not an issue with the consumer, who ultimately drives the economy. Now in his third market cycle of managing money, the portfolio manager recognized that many elements were actually in good health, from millennials with no mortgages, a housing market at steady levels in the U.S. as it continued its recovery from the 2008 Global Financial Crisis, and a banking system that was doing well after 10 years of Federal Reserve stress tests.

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Surge Closes Investment into Contractor Connect – Business Wire

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DALLAS–(BUSINESS WIRE)–Surge Private Equity LLC (“Surge”) announces investment into its 10th platform, Contractor Connect LLC (“CC” or “Company”), a B2B networking lead-generation platform within the home improvement and remodeling space. The transaction closed with debt financing provided by Modern Bank and Assurance Mezzanine Fund with BakerHostetler acting as lead counsel.

Since its founding in 2014, CC has connected hundreds of thousands of homeowners to local contractors through its proprietary lead aggregator, screening, and live-transfer platform. The Company primarily specializes in various home remodeling verticals including bathrooms, windows, roofs, gutters, and sidings. Its recognized brand is highly regarded across the 25+ states it currently serves. Founder Joseph Powless will remain on as both an owner and partner of the Company.

“COVID has accelerated work from home hybrid and full-time trends. People are now spending more time at home, increasing the demand for home improvement,” said Surge Founding Partner Thomas Beauchamp. “This sustained macro demand for the industry paired with our plan to launch into new verticals such as HVAC and solar give us a clear pathway to sustaining the historical 25% annual growth rate.”

About Surge Private Equity

Surge Private Equity is a Dallas-based private equity firm that seeks majority investments in growing businesses with $2-7.5MM of EBITDA. Together with its lending partners, Surge provides entrepreneurs with liquidity and investors with higher yields and greater accessibility through lower investment minimums. Surge primarily invests in companies where the seller will remain in an ongoing capacity.

About Modern Bank

Modern Bank, N.A. is a privately owned, entrepreneurial bank that provides flexible, competitive, and reliable senior debt financing solutions to commercial companies. Its experienced bankers specialize in working with lower middle-market companies and owners to provide low-cost cash flow-based financing solutions.

About Assurance Mezzanine Fund

Assurance Mezzanine Fund is a private investment firm providing $3 to $20 million customized growth capital solutions to profitable, lower-middle-market companies nationwide. We look to invest our funds in established companies operated by experienced and proven management teams with a history of building enterprise value.

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Have a large amount of cash to invest? Here's how deploying it all at once compares with doing so over time – CNBC

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Valeriy_G | iStock | Getty Images

If you have a big wad of cash to invest, you may wonder whether you should put all of it to work immediately or spread out over time.

Regardless of what the markets are doing, you’re more likely to end up with a higher balance down the road by making a lump-sum investment instead of deploying the money at set intervals (known as dollar-cost averaging), a study from Northwestern Mutual Wealth Management shows.

That outperformance holds true regardless of the mix of stocks and bonds you invest in.

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“If you look at the probability that you’ll end up with a higher cumulative value, the study shows it’s overwhelmingly when you use a lump-sum investment [approach] versus dollar-cost averaging,” said Matt Stucky, senior portfolio manager of equities at Northwestern Mutual Wealth Management.

The study looked at rolling 10-year returns on $1 million starting in 1950, comparing results between an immediate lump-sum investment and dollar-cost averaging (which, in the study, assumes that $1 million is invested evenly over 12 months and then held for the remaining nine years).

Assuming a 100% stock portfolio, the return on lump-sum investing outperformed dollar-cost averaging 75% of the time, the study shows. For a portfolio composed of 60% stocks and 40% bonds, the outperformance rate was 80%. And a 100% fixed income portfolio outperformed dollar-cost averaging 90% of the time.

The average outperformance of lump-sum investing for the all-equity portfolio was 15.23%. For a 60-40 allocation, it was 10.68%, and for 100% fixed income, 4.3%.

Even when markets are hitting new highs, the data suggests that a better outcome down the road still means putting your money to work all at once, Stucky said. And, compared with investing the lump sum, choosing dollar-cost averaging instead can resemble market timing no matter how the markets are performing.

“There are a lot of other periods in history when the market has felt high,” Stucky said. “But market-timing is a very challenging strategy to implement successfully, whether by retail investors or professional investors.”

However, he said, dollar-cost averaging is not a bad strategy — generally speaking, 401(k) plan account holders are doing just that through their paycheck contributions throughout the year.

Additionally, before putting all your money in, say, stocks, all at once, you may want to be familiar with your risk tolerance. That’s basically a combination of how well you can sleep at night during periods of market volatility and how long until you need the money. Your portfolio construction — i.e., its mix of stocks and bonds — should reflect that risk tolerance, regardless of when you put your money to work.

“From our perspective, we’re looking at 10-year time horizons in the study … and market volatility during that time is going to be a constant, especially with a 100% equity portfolio,” Stucky said. “It’s better if we have expectations going into a strategy than afterwards discover our risk tolerance is very different.”

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