Canadian investment funds and entertainment-focused firms have joined a global party in buying up rights to music catalogues that can generate royalty payments when songs are bought, streamed, performed or used in fitness classes.Ashley Landis/The Associated Press
Advisors’ role has evolved greatly from transactional stockbrokers and mutual fund or insurance sales representatives to holistic wealth managers during the past couple of decades. But while skills such as tax, insurance, estate or strategic philanthropic planning have become increasingly more important, investments are still a critical part of what advisors do.
Helping clients achieve their life goals, including reaching retirement with enough assets from which to produce income for the rest of their days, relies heavily on being an astute investment manager who stays on top of current trends and strategies.
Here are 10 articles on investing themes and strategies published in the past year that are worth another read:
Catherine Wood launched Ark Investment Management LLC almost seven years ago to capture the potential of a coming wave of technological change. Since then, the New York-based firm has grown from a US$15-million venture into one in which the flagship exchange-traded fund (ETF) manages about US$18-billion in assets. Ark is finding opportunities in the convergence of robotics, energy storage, artificial intelligence, and cloud-based data storage. The applications include DNA sequencing, electric vehicles, self-driving cars, e-commerce, blockchain technology, and even space exploration. “We will see more disruption in the next five to 10 years than we have in the history of the world,” Ms. Wood predicts.
Could the burgeoning psychedelics sector end up spawning a major stock rally that could dwarf the cannabis-driven market mayhem of the past decade? “From a market perspective, you could argue the blue-sky opportunity for psychedelics is far, far greater [than for cannabis],” according to Maruf Raza, a partner and national director of public companies at MNP LLP in Toronto. That’s because the nascent sector is largely organized around disrupting the global anti-depressant market, which is worth tens of billions of dollars annually to pharmaceutical giants.
The Rolling Stones, Fleetwood Mac, Madonna, Drake, Justin Bieber, and the Weeknd have topped music charts during different decades thanks to diehard fans. Now, their songs have struck a chord with yield-seeking investors, too. Welcome to the music-royalty gold rush. Canadian investment funds and entertainment-focused firms have joined a global party in buying up rights to music catalogues that can generate royalty payments when songs are bought, streamed, performed, or used in Peloton fitness classes.
Inflation has always been a threat to investment portfolios but the recent surge in prices of everything from food and gas to housing and wages has advisors fielding more questions from clients about how it will affect their retirement savings. Laura Barclay, vice-president and senior portfolio manager at TD Wealth Private Investment Counsel in Markham, Ont., says a rising inflation environment is a good time to review asset allocation, and, in particular, the level of fixed income in a portfolio compared to equities.
A window of opportunity has opened for Canadian investors to bank up U.S. dollars in their investment portfolios and get more buying power to expand their international holdings. The Canadian dollar is currently trading at around 78 cents to the U.S. dollar – a big increase from a year ago, when it dipped below 70 cents at the onset of the COVID-19 pandemic as global trade almost froze and resources prices cratered. “It’s always good to buy the U.S. dollar when Canada is strong relative to the U.S.,” says Paul Harris, partner and portfolio manager at Harris Douglas Asset Management Inc. in Toronto.
India has struggled mightily with the COVID-19 pandemic, which has overwhelmed its health care system and reduced its economy to a crawl this past spring. But the world’s largest democracy is rebounding gradually and should still turn in a 2021 growth rate that is among the best in the global economy. “The last time we saw such a large country with similar long-term growth potential was when China was growing at double digits,” says Christine Tan, assistant vice president, portfolio management, and emerging-markets specialist at SLGI Asset Management Inc. in Toronto, who foresees growth of 7 to 8 per cent in the current fiscal year.
Recent data analysis by The Globe and Mail reveals that just 4 per cent of companies on the S&P/TSX Composite Index have a female chief executive officer and more than half of the companies on the same index have no women top executives at all. Yet, a 2020 Responsible Investment Association investor opinion survey shows 73 per cent of participants want a portion of their portfolio to be invested in organizations that provide opportunities for the advancement of women and diverse groups.
What goes up, must come down – eventually. Most investors know that, but the question of “when” has money managers torn between taking cover or riding out the pandemic bull market that has the experts perplexed. While much of the equity market’s strength is being fuelled by rock-bottom borrowing rates as central banks maintain low interest rate policies to keep cheap money flowing, that strength doesn’t appear to be waning as pockets of inflation appear and central banks signal they will eventually need to raise rates.
The approval of five additional state cannabis ballot measures in the U.S. federal election in November 2020, combined with strengthening balance sheets among the largest U.S. cannabis companies and increasingly bipartisan political support for legalization, has created an ideal entry point for investors. In fact, despite ongoing federal prohibition and onerous tax policies, U.S. cannabis companies make for better investments than those in Canada, says Vivien Azer, managing director and senior cannabis research analyst at Cowen Inc. in New York. “We are more constructive on the opportunity in the U.S. relative to the adult-use market in Canada,” she says.
Canada’s new harmonized equity crowdfunding rules are opening up financing options for startups and giving average investors the chance to gain from the potentially explosive growth of the country’s emerging small companies. Previously, rules were different across the country making it a challenge for small companies to run a national crowdfunding campaign. “One of the things that we heard from market participants was that it would be a benefit to startup businesses that want to raise capital nationally to have a harmonized regime,” says John Hinze, director of corporate finance at the B.C. Securities Commission.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
