Many investors may be just too busy with their day jobs to analyze securities and spot value in a turbulent market environment that has gotten more expensive in recent weeks. Undoubtedly, DIY investors should always ensure they put in their share of due diligence to tilt the risk/reward scenario in their favour.
However, there is certainly no shame in taking on a more passive approach with, say, ETFs (exchange-traded funds) or mutual funds. Indeed, with index funds and mutual funds, you’re either settling for market average returns or delegating research and analysis of stocks to a “professional” money manager.
Indeed, if you opt for professional management, my best advice to you would be to watch out for the fees! A lot of investment pros just can’t beat the market on a consistent basis, yet they can charge management expense ratios (MERs) in the ballpark of 2-3%. That’s an obscene fee, in my opinion, especially if you’re investing a considerable sum (let’s say $50,000 or more).
In this piece, we’ll look at two stocks that I believe that hands-off investors can buy and just hang on for years at a time without having to worry about stock charts, technical analysis, or massive shifts in the industry landscape. The following companies, I believe, possess wide economic moats. This means each firm stands to continue generating economic profits over the foreseeable future without giving up too much ground to potential rivals.
National Bank of Canada
National Bank of Canada (TSX:NA) is one of my favourite Canadian banks and one that doesn’t get as much attention as its larger peers. The bank has delivered a robust 62.6% in capital gains over the past five years. Meanwhile, National’s bigger brothers in the Big Six haven’t really been able to put up better results. Indeed, bigger is not always better when it comes to stocks. And when it comes to value in the Canadian financial scene, I believe National is the best horse to bet on for the next 10 years (or more).
Shares trade at 10.1 times trailing price to earnings (P/E), with a 4.46% dividend yield. A pretty stellar deal for a top performer that could continue its hot run relative to industry peers moving forward.
After outperforming in recent years, is the stock still one of the best banks for your buck? I think it is.
Fairfax Financial Holdings
Up next, we have Fairfax Financial Holdings (TSX:FFH), an insurer and investment holding firm run by the legendary money manager in Prem Watsa. The man is known as Canada’s Warren Buffett, and the recent run in the stock, I believe, proves Watsa remains one of the best investors on Earth. Over the past two years, shares have more than doubled, surging 116.7%. Smart investments and improving underwriting remain drivers that could keep powering the stock in 2024 and 2025.
My takeaway? Why pay your bank’s mutual fund manager a 3% MER when you can buy shares of FFH, a company run by arguably the best investor in the country? Personally, I’d rather put my money in Mr. Watsa as it steers FFH stock to even higher highs.
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.
