Connect with us

Investment

Investment tips for millennials: Bear markets are a gift for those with a long runway ahead

Published

on

I turned 65 this spring and for some strange reason, now find myself prone to pontificating. That includes pouring my hard-earned wisdom onto young business partners and unsuspecting nephews.

It’s hard to resist because today’s youth are taking an unprecedented interest in investing. It’s been a unique aspect of the COVID-19 cycle. Discount trading platforms are seeing a surge in account openings while trading in low-priced stocks has exploded.

Last week, I overheard a young guy tell his friend that he was spending a lot of time on investing. “I’ve focused in on the Nasdaq,” he said. My nephew, who’s never been particularly interested in investing, asked me whether it was time to buy Air Canada.

This is exciting for me because I’ve preached for years (even before reaching the appropriate age) that young investors should be bouncing off the ceiling when stocks are down. Bear markets are a gift for those who are accumulating assets and have a long runway ahead.

I wrote a column last summer on how to get started, although it seems mundane in the context of today’s high velocity market. Indeed, it’s inspired me to write chapter two — some tips for new investors who are now up and running.


In the short term, it’s a casino

Don’t read too much into day-to-day price changes. The market is a complex organism that’s influenced by a variety of factors and interconnections. Short-term moves are more often random than linked to specific announcements or news items. By the same token, don’t be too quick to claim brilliance if a stock goes up after you bought it. Your thesis may have been correct but getting the timing right was blind luck.


Intellectual integrity

Indeed, if you’re taking credit for a profitable trade, then also own the blow ups. Don’t inherit a trait from your parents’ generation — i.e. congratulating yourself on a great call when a stock goes up, but blaming the market when it slides. Make sure you’re honest with yourself.


Reading it on Twitter or Reddit doesn’t constitute an edge

We all like to think we have the inside track. A hot deal on a paddleboard or a scoop on a friend’s engagement. As an investor, however, assume that anything you get from a news feed is broadly known. If your view of a company or situation came from something you read on your phone, then it’s not unique.


The long game

There is one area, however, where you do have a structural edge. You have a longer timeframe and can be more patient than your grandfathers’ pension plan, your mother’s advisor, or a Wall Street hedge fund. If you find an asset that’s extremely undervalued, you can wait for it to play out. Warren Buffet once said: “The stock market is a device for transferring money from the impatient to the patient.”


Write it down

It’s a good discipline to write down three reasons why you own a stock. This is useful because if things don’t work out, you need to know whether your thesis was wrong, or you just overpaid. Understanding the difference will help you decide whether you should sell or buy more.


Pre-mortem

You should also jot down a list of factors that may cause the stock to go down. It’s valuable to understand why someone is selling you the stock. For every optimistic buyer, there’s a seller who either sees a pothole ahead or is rejoicing at how much someone is willing to pay for the stock.


Pay attention to gravity

Howard Marks of Oaktree Capital Management (another old guy) said: “No asset can be considered a good idea (or a bad idea) without reference to its price.”

In the near term, a company’s valuation has little predictive value, but over longer periods, it’s the closest thing investors have to gravity. Buying at or below a fair price will produce attractive returns. Paying too much will lead to poorer results.


Eyes wide open

It’s a great time to learn about investing. The past three months have been equivalent to a two-year MBA. The COVID-19 crisis is a unique moment in time, but the markets are doing what they always do. They are illogical, unpredictable and prone to exaggeration. That’s what makes investing so interesting and rewarding for those who are disciplined and patient.


Tom Bradley is


chair and chief investment officer


at Steadyhand Investment Funds, a company that offers individual investors low-fee investment funds and clear-cut advice. He can be reached at

tbradley@steadyhand.com

Edited by Harry Miller

harrymiller@canadanewsmedia.ca

Source: – TheChronicleHerald.ca

Source link

 

Continue Reading

Investment

ByteDance in talks with India's Reliance for investment in TikTok: TechCrunch – The Guardian

Published

on


(Reuters) – China’s ByteDance is in early talks with Reliance Industries Ltd for an investment in its video-based app TikTok’s business in India, TechCrunch reported https://techcrunch.com/2020/08/12/bytedance-in-talks-with-indias-reliance-for-investment-in-tiktok on Thursday, citing sources.

The two companies began conversations late last month and have not reached a deal yet, according to the report.

Reliance, ByteDance and TikTok did not immediately respond to Reuters requests for comment.

The Indian government in June banned 59 Chinese apps, including TikTok and WeChat, for threatening its “sovereignty and integrity” after border tensions with China.

Last week, U.S. President Donald Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok, escalating tensions between the two countries.

Microsoft Corp has been in talks to acquire the U.S. operations of the video-sharing app.

Social media platform Twitter Inc has also expressed interest in having a deal with TikTok, sources familiar with the matter told Reuters late last week.

(Reporting by Sabahatjahan Contractor in Bengaluru; Editing by Aditya Soni)

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Inovalis Real Estate Investment Trust Announces Financial Results for the Second Quarter of 2020 – Canada NewsWire

Published

on


/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/

TORONTO, Aug. 12, 2020 /CNW/ – Inovalis Real Estate Investment Trust (the “REIT”) (TSX: INO.UN) today reported financial results for the quarter ended June 30, 2020.

Inovalis REIT is in a stable and advantageous position following the COVID-19 crisis of Q2, 2020.  Stéphane Amine, President of the REIT, commented ” Our strong operating platform together with a $58 million cash position at quarter end leaves management well-placed to focus on opportunistic growth in the latter half of 2020. Tenants of the REIT in both France and Germany are paying their rent in a timely way despite the onset of disruptions to business caused by the pandemic crisis since the end of Q1.” 

HIGHLIGHTS 

Net Rental Income

For the portfolio of properties wholly owned by the REIT (“IP Portfolio”), net rental income for Q2 2020, adjusted for IFRIC 21[1], was CAD$6.68 million (EUR4.38 million), an increase over the CAD$5.86 million (EUR3.90 million) adjusted net rental income for the same period in 2019. The gain of CAD$0.82 million (EUR0.48 million) in adjusted net rental income is mainly due to the income contribution following the acquisition of the Trio property and acquisition of the Arcueil property, partially offset by the sale of Vanves and the departure of the main tenant in Courbevoie.
In Q2 2020, for the portfolio that includes the REIT’s proportionate share in joint ventures (“Total Portfolio”), net rental income of CAD$8.96 million (EUR5.88 million) adjusted for IFRIC 21 remained stable compared to the same period in the previous year (+CAD$0.06 million).

COVID-19 Related Business Update

Although the ongoing impact of the COVID-19 crisis is difficult to predict, the REIT remains in good financial standing and is currently well-positioned to withstand the economic impact of the pandemic. The REIT is thus reporting near-normal quarterly rent collection for Q2 2020 and will focus on providing support to tenants throughout the coming months as their employees re-enter the workplace. The REIT will continue to assess market conditions and adapt its strategy to address the economic, social and health care impact of the pandemic.

The REIT is confident in the strength of its portfolio, as indicated by its solid Q2 2020 results. However, the REIT’s second quarter results cannot be considered in isolation when formulating an outlook for the remainder of 2020. It is possible that downward pressure on rental revenue may occur in the short-term as a result of the COVID-19 pandemic and consequent economic disruption

Rent collection

Rent collection for the French assets is recorded on a quarterly basis and 92% of rent has been received for Q2 2020. This is generally in line with the speed and percentage of pre-COVID-19 rent collection levels with a few minor exceptions. As at July 31, 2020 the REIT has already received 77% of the Q3 rents on its French portfolio. Management expects to collect nearly 90% of the Q3 2020 rents in France by the end of September, the remaining 10% having been deferred after negotiation with tenants to Q4 2020. For the REIT’s German properties, where rents are collected on a monthly basis, 99% of rent was received in Q2 2020.  Following quarter-end, 97% of July rent and 98% of August rent has been collected for German assets to date.

Management is actively monitoring rent payment deferral requests to maintain consistent rent collection while supporting tenants’ needs.

Leasing Operations

About 3,000 sq.ft of incremental space was leased during Q2. Efforts continue to lease unoccupied space (154,770 sq.ft) in the portfolio. Management will selectively complete capex improvements on vacant areas to attract tenants and maximize rent.

Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”) 

In Q2 2020, the REIT reported Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO)” were $0.16 and $0.15 per unit respectively. Performance was affected by the decision to pause the 2020 investment strategy due to the economic impact of the COVID-19 pandemic. As of June 30th, the REIT has CAD$58 million of cash on its balance sheet, of which CAD$12.2 million is the excess profit accrued from the disposition of the Vanves asset in 2019 at a higher price than the fair market recorded until Q2 2019. Management estimates that the opportunity cost of reserving CAD$55 million in cash, previously allocated for investment in 2020, has negative quarterly effect the FFO in the range of CAD$0.03 to $0.04 per unit. The CAD$55 million has been held in Euros since December 2019 and has shown an unrealized foreign exchange gain of CAD$1.8 million (which represents an equivalent of approximately $2.6 per unit of FFO) over the six months of 2020, a gain that we have chosen to exclude from the FFO determination given the volatility of the Canadian dollar against the Euro, despite the REALPAC guidance on this particular matter.

Financing Activity

The weighted average interest rate across the portfolio is 2.06% and the debt ratio is 40.3% (34.9% net of cash), comfortably within the REITs mandated threshold of 60%. The interest-only bullet loan against the Duisburg property, held in joint venture, has been successfully extended for another 3 years at an interest rate of 1.44%, and we are now working on an additional capex line for this asset with the same lender.

This refinancing proves the REIT’s ability to fund operations and acquisitions on a less costly basis than traditional financing in Canada, taking advantage of historically low interest rates in Europe.

In France, banks and financial lessors have been encouraged by the French Government’s measures to ease the debt service conditions of their clients from the start of the pandemic and this has positively benefited the REIT, which has obtained deferrals on Sabliere, Courbevoie, Metropolitain and Delizy properties representing a CAD$1.6 million (EUR1.05 million) positive impact on the Q2 available cash. Deferral on the Arcueil lease liability is still under discussion while the quarterly payment of CAD$1.3 million (EUR0.86 million) due on April 1, 2020 has been suspended.

For the total year 2020, the positive impact on cash of senior debt deferrals represents CAD$4.3 million, including Arcueil pending agreement.

Rueil acquisition loan

The delivery of the Rueil property development project is well under way and our budgetary assumptions related to the valuation of the REIT’s profit participation component in the Rueil development loan have been confirmed. The property development is now in its final three months of completion and, subsequent to the quarter, on July 30, 2020, EUR12.4 million out of the initial EUR17.2 million loan has been returned to the REIT by the borrowing entity. Management forecasts that the 2020 fund inflows should be in line as per the initial loan plan. An additional gain of CAD$0.15 million in fair value was recognized in relation to the profit participation component of the loan for Q2 2020 in addition to the CAD$9.6 million accrued since the inception of the loan in December 2016.

Bad Homburg

Subsequent to the quarter, an agreement has been reached between management of the REIT and its JV co-owner of the Bad Homburg asset for the REIT to acquire full ownership of the asset by end of Q3 2020, for a total purchase price of EUR5,873 (CAD$8,957). The asset has been jointly held since 2015.

Stuttgart

Subsequent to the quarter, the REIT and its JV partner have taken steps to sell the Stuttgart asset which has been jointly held by the parties since 2017. A top-tier international broker has been engaged for the sale and a marketing plan is underway. The disposition of this asset will contribute to the REIT’s positioning for future opportunistic investments and further simplify its asset ownership structure.

Normal Course Issuer Bid

On April 20, 2020, the TSX approved the REIT’s Normal Course Issuer Bid (NCIB) which was undertaken in response to the extreme volatility that affected the trading price of the REIT in Q2. Management believes that the purchase by the REIT of a portion of its outstanding Units may be an appropriate use of available resources and in the best interests of the REIT and its unitholders. Between April 22 and June 30, 2020, the REIT bought back 510,500 Units at Unit prices ranging between $6.41 and $8.00 for a total $3.9 million buyback of Units. On June 29, 2020, the REIT entered into an automatic purchase plan with a broker to repurchase a daily limit of 20,890 units at a maximum price of $8.00 per unit, for the period of June 30 to August 14, 2020.  

Dividend Reinvestment Plan Suspension

Until further notice, in response to the market disruption caused by the COVID-19 pandemic, the REIT has suspended its DRIP effective May 15, 2020 to unitholders of record as at April 30, 2020.

ABOUT INOVALIS REAL ESTATE INVESTMENT TRUST

Inovalis Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning office properties primarily located in France and Germany but also opportunistically in other European countries where assets meet the REIT’s investment criteria.

______________________________

1 Net rental Income adjusted for IFRIC 21 is non-IFRS information. (Refer to the “Non-IFRS financial measures” section for further details.)

SOURCE Inovalis Real Estate Investment Trust

For further information: David Giraud, Chief Executive Officer, Inovalis Real Estate Investment Trust, Tel: +33 1 5643 3323, [email protected]; Khalil Hankach, Chief Financial Officer, Inovalis Real Estate Investment Trust, Tel:+33 1 5643 3313, [email protected]

Related Links

www.inovalis.com

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Goldman Sachs: The next big investment opportunity – Yahoo Canada Finance

Published

on



<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It may be time to hit pause on the red-hot big cap tech trade of 2020 fueled by names such as Zoom (ZM) and Advanced Micro Devices (AMD) and take a ride on some less exciting industrial and utilities stocks.” data-reactid=”16″>It may be time to hit pause on the red-hot big cap tech trade of 2020 fueled by names such as Zoom (ZM) and Advanced Micro Devices (AMD) and take a ride on some less exciting industrial and utilities stocks.

Well, perhaps movers of dirt and sellers of electricity are more exciting investments than one thinks if listening to the new pitch from strategists at Goldman Sachs. The investment bank lifted its outlook on the industrials and utilities sector on Wednesday, citing a host of reasons to get long in a space that had fallen out of favor amidst the COVID-19 pandemic.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Industrials should benefit from improving global economic growth and potential infrastructure spending while Utilities’ dividend yield relative to the level of interest rates is near a 25-year high,” writes Goldman’s Arjun Menon. Goldman is looking for 5.6% global GDP growth in 2021, which would be vastly improved from the 5% plunge expected this year.” data-reactid=”18″>“Industrials should benefit from improving global economic growth and potential infrastructure spending while Utilities’ dividend yield relative to the level of interest rates is near a 25-year high,” writes Goldman’s Arjun Menon. Goldman is looking for 5.6% global GDP growth in 2021, which would be vastly improved from the 5% plunge expected this year.

The Dow Transports have come on strong.
The Dow Transports have come on strong.

Menon adds, “Improving global economic growth and low interest rates should also be tailwinds to select cyclical and defensive pockets within the equity market. Within cyclicals, stocks that are most positively correlated with global economic growth should see their businesses normalize faster than companies that are more tied to the domestic economy. Among defensives, low interest rates mean total cash return yields will likely be a key determinant of performance through the remainder of this year.”

Goldman retained its overweight recommendation on information technology, citing attractive fundamentals. It continues to hold bearish views on health care, real estate, energy and materials.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Only until recently have more cyclical areas of the market begun to catch bids. So if anything, Goldman’s upgrade lends validity to a move in markets that hasn’t gotten a ton of attention. Prior to Wednesday’s session, the Dow Jones Transportation Average had risen for 10 straight sessions. The index has quietly outperformed the S&amp;P 500 and Nasdaq Composite this past month (see chart above), according to Yahoo Finance Premium data.” data-reactid=”32″>Only until recently have more cyclical areas of the market begun to catch bids. So if anything, Goldman’s upgrade lends validity to a move in markets that hasn’t gotten a ton of attention. Prior to Wednesday’s session, the Dow Jones Transportation Average had risen for 10 straight sessions. The index has quietly outperformed the S&P 500 and Nasdaq Composite this past month (see chart above), according to Yahoo Finance Premium data.

Not everyone on Wall Street is sold just yet on Goldman’s call.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“We want to see if it’s more sustainable. If you look at historical cycles, once the economy truly starts to recover it is all about getting cyclical — or the stocks that got beaten down the most during the decline. They tend to rally. Normally we would have seen it by now. Because it’s such a unique recession, we haven’t seen it yet. So eventually, yes, it will be the big trade probably over the next 12 to 18 months,” Ned Davis Research chief U.S. strategist Ed Clissold told Yahoo Finance’s The First Trade.” data-reactid=”34″>“We want to see if it’s more sustainable. If you look at historical cycles, once the economy truly starts to recover it is all about getting cyclical — or the stocks that got beaten down the most during the decline. They tend to rally. Normally we would have seen it by now. Because it’s such a unique recession, we haven’t seen it yet. So eventually, yes, it will be the big trade probably over the next 12 to 18 months,” Ned Davis Research chief U.S. strategist Ed Clissold told Yahoo Finance’s The First Trade.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.” data-reactid=”35″>Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”49″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending