Investment
'Landmark investment:' Promised federal permanent transit fund would help expand Edmonton LRT, Iveson says – Edmonton Journal
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Promised permanent transit funding announced by the Prime Minister Justin Trudeau Wednesday would be used to help finance Edmonton’s planned LRT system expansion, Mayor Don Iveson said.
Although the amount of funding pegged for Edmonton hasn’t been determined, municipalities across the country will split $3 billion in pledged annual funding starting in 2026 through a new permanent transit fund, Trudeau said, announcing the effort as part of a larger $14.9-billion investment in public transit projects over the next eight years.
Iveson, also chairman of the Federation of Canadian Municipalities Big City Mayors’ Caucus, said the funding is “a landmark investment” in supporting COVID-19 recovery for cities across the country as transit projects will help create jobs, shorten commutes and help to reduce greenhouse gas emissions. With guaranteed annual funding into the future, Iveson said the city can start deciding timeframes and next steps for LRT expansion in all quadrants.
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“Permanent funding really makes firm timelines for the full buildout of the LRT system imaginable,” he said. “It will mean big projects can go ahead sooner, it will mean firm timelines for longer term, even larger mega projects in cities across the country, and it will also mean acceleration of some of our green fleet initiatives.”
One of the next LRT projects on the list for the city is building the Metro Line Northwest expansion, first north to Castle Downs and then to St. Albert. The funding announcement will allow the city to start moving forward on the first phase sooner and allow for firm timelines, Iveson said.
Another project that could benefit is the planned Capital Line South extension to Ellerslie Road. Preliminary design work on the project is complete and the city was awaiting funding to be able to move forward on construction.
The money is welcome news as municipalities continue to struggle with revenue shortfalls on transit as a result of the COVID-19 pandemic, Iveson said. The city is currently forecasting a budget shortfall of $152 million in 2021 — $63 million from transit revenue reductions alone as ridership isn’t anticipated to exceed 50 per cent of usual capacity until mass vaccination.
“We’re excited about an announcement that positions municipalities as central partners in Canada’s pandemic recovery,” he said. “Permanent transit funding offers cities long-term predictability to finally be able to deliver transformational system expansion and drive durable economic growth across our country.”
Edmonton currently receives about $130 million a year for transit from the federal government based on a ridership formula.
Investment
Private equity gears up for potential National Football League investments – Financial Times
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Investment
Investment Opportunities With Hot Inflation, Higher-for-Longer Interest Rates – Bloomberg
Like a bad houseguest, hotter-than-expected inflation continues to linger in the US.
Traders had hoped by now the Federal Reserve would be free to start cutting interest rates — boosting rate-sensitive stocks and unlocking a largely frozen real estate market. Instead, stubborn price growth has some on Wall Street rethinking whether the central bank will lower rates at all this year.
Investment
Want to Outperform 88% of Professional Fund Managers? Buy This 1 Investment and Hold It Forever. – The Motley Fool
You don’t have to be a stock market genius to outperform most pros.
You might not think it’s possible to outperform the average Wall Street professional with just a single investment. Fund managers are highly educated and steeped in market data. They get paid a lot of money to make smart investments.
But the truth is, most of them may not be worth the money. With the right steps, individual investors can outperform the majority of active large-cap mutual fund managers over the long run. You don’t need a doctorate or MBA, and you certainly don’t need to follow the everyday goings-on in the stock market. You just need to buy a single investment and hold it forever.
That’s because 88% of active large-cap fund managers have underperformed the S&P 500 index over the last 15 years thru Dec. 31, 2023, according to S&P Global’s most recent SPIVA (S&P Indices Versus Active) scorecard. So if you buy a simple S&P 500 index fund like the Vanguard S&P 500 ETF (VOO -0.23%), chances are that your investment will outperform the average active mutual fund in the long run.
Why is it so hard for fund managers to outperform the S&P 500?
It’s a good bet that the average fund manager is hardworking and well-trained. But there are at least two big factors working against active fund managers.
The first is that institutional investors make up roughly 80% of all trading in the U.S. stock market — far higher than it was years ago when retail investors dominated the market. That means a professional investor is mostly trading shares with another manager who is also very knowledgeable, making it much harder to gain an edge and outperform the benchmark index.
The more basic problem, though, is that fund managers don’t just need to outperform their benchmark index. They need to beat the index by a wide enough margin to justify the fees they charge. And that reduces the odds that any given large-cap fund manager will be able to outperform an S&P 500 index fund by a significant amount.
The SPIVA scorecard found that just 40% of large-cap fund managers outperformed the S&P 500 in 2023 once you factor in fees. So if the odds of outperforming fall to 40-60 for a single year, you can see how the odds of beating the index consistently over the long run could go way down.
What Warren Buffett recommends over any other single investment
Warren Buffett is one of the smartest investors around, and he can’t think of a single better investment than an S&P 500 index fund. He recommends it even above his own company, Berkshire Hathaway.
In his 2016 letter to shareholders, Buffett shared a rough calculation that the search for superior investment advice had cost investors, in aggregate, $100 billion over the previous decade relative to investing in a simple index fund.
Even Berkshire Hathaway holds two small positions in S&P 500 index funds. You’ll find shares of the Vanguard S&P 500 ETF and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) in Berkshire’s quarterly disclosures. Both are great options for index investors, offering low expense ratios and low tracking errors (a measure of how closely an ETF price follows the underlying index). There are plenty of other solid index funds you could buy, but either of the above is an excellent option as a starting point.
Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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