A portfolio manager’s job is to always flush out risks and factor them into the investment decision-making process, though year-end is naturally a time to look back and ahead.
Real eState
Storm only just beginning in the real estate investment market
Private real estate equity and debt markets
We think the storm is only just beginning in the real estate market and it could wreak havoc once this year’s rate hikes fully kick in and people wake up to the reality that we may not be going back to pre-2022 levels.
Technology stocks
One of the most interesting trades we’ve been following is the Nasdaq versus 20-plus-year Treasuries — via the Invesco QQQ Trust Series 1 and iShares 20 Plus Year Treasury Bond exchange-traded funds — as they’ve been moving in unison all year. Both are down approximately 29 per cent over the past 12 months.
For now, we’ve been avoiding both, but have only just begun dipping our toes in the longer-duration bond market.
EAFE emerging markets
We have a zero-weight exposure to emerging markets such as China, since we just don’t see the path to recovery given the continual starting and stopping of its economy because of COVID-19 lockdowns.
We also have minimal exposure to Europe, Australasia and the Middle East (EAFE) given their poor energy policy, more so in Europe, which has been taken advantage of by Russia, thereby putting significant pressure on their economies.
There are also the currency risks in these regions against the U.S. dollar, which continues to gain in value as the European Central Bank and Bank of Japan are unable to keep pace with the Fed.
We think resource-based markets such as Canada are the better alternative here due to their exposure to energy and materials. We also like the value segments of the U.S. market including health care, financials, energy and utilities.
Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc, operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning.
Real eState
Mortgage rule changes will help spark demand, but supply is ‘core’ issue: economist
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
The Canadian Press. All rights reserved.
Real eState
National housing market in ‘holding pattern’ as buyers patient for lower rates: CREA
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
Real eState
Two Quebec real estate brokers suspended for using fake bids to drive up prices
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
The Canadian Press. All rights reserved.
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