Written by Amy Legate-Wolfe at The Motley Fool Canada
The TSX today remains a stressful place for many investors. The volatility that continues to weigh on the minds of investors hasn’t gone away. And it’s leaving many out of the opportunities in the market.
If you’re one of these stressed investors, then there is an answer to your woes. Invest in safe exchange-traded funds (ETFs).
ETFs: Safety in volatility
In an interview with Jonathan Needham, vice president and director, and Lead of ETF Distribution at TD Asset Management, the director pointed out that ETFs have remained popular during volatile economic environments. This mainly comes down to the diversification provided by these ETFs, which provide strong, risk-adjusted returns for investors. This allows investors to continue receiving positive returns and reach long-term goals.
“Most importantly, with ETFs, investors can gain instant diversification to a portfolio of different securities,” Needham said. “And the power of buying a basket of securities versus betting on a single horse is certainly a lot smoother ride for that investor, especially during a volatile economic environment.”
That diversification certainly counts. But the reason it’s so successful is because there is a team of professionals managing how each ETF invests. Instead of managing a portfolio of equities, an ETF can provide you with the security of knowing that your money is being managed professionally.
This doesn’t mean you don’t have a choice in how you invest in an ETF. Instead, you can look at themes, asset classes, industries, geographic regions, and even highly specialized strategies that can align with an investor’s own beliefs. From there, investors can receive a basket of assets based on what they feel is important to their own personal financial growth. Moreover, it’s far less expensive than going with a broker.
“Compared to other investment funds, ETFs tend to have lower management fees and operating costs. Lower fees mean more of your savings are invested, which — with the benefits of compounding — can improve your return,” Needham said.
Make it easy
As mentioned, choosing an ETF doesn’t mean you have no choice. In fact, there are thousands of ETFs out there to choose from. Yet when it comes to finding the best one, perhaps go with the simplest.
One option to consider is investing in the S&P 500 through a high-yield, low-cost ETF. These types of ETFs are exactly what Warren Buffett, financial guru and billionaire, has long recommended to investors. Over time, returns on the S&P 500 have been enormous, and there are Canadian ETFs that can allow you to get in on that action.
One example is Vanguard S&P 500 Index ETF, with a 1.24% dividend yield and year-to-date returns of 16.25% as of writing. This provides you with the top companies on the S&P 500 today, along with passive income through dividends.
This easy solution is exactly what Needham points to, as ETFs continue to be a strong driver for investors looking for a low cost and easy access to the markets — all while counting on professional help rather than trusting your gut instincts.
“The ease of use is ETF’s biggest draw for consumers — investors can easily build a diverse and robust portfolio with a low cost of entry and transparent reports,” Needham said. “Adjustments, on the margin, depending on the market environment we are in or going into, can also help to improve outcomes for clients, not to mention the experience or better put, emotions or bad behaviours that investors can sometimes display during market volatility.”
The post Too Stressed to Invest? Experts Weigh In on Finding Safety in Volatility appeared first on The Motley Fool Canada.
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Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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