There is a large cohort of investors that loves gold, and a large cohort that dislikes gold; we are neither. Our opinion on the yellow metal and gold mining companies changes over time. This is evident in gold allocation in our fundamentally driven North American dividend-focused portfolio over the past five years, from less than 3% to over 9% and currently sitting at 7%.
Category: Blog Post
With the number of economic and public health uncertainties worldwide, it’s important to diversify away from systematic risks that materialize when you invest in a limited number of asset classes. Alternative investments are financial options that don’t fall into the conventional silos of stock, cash, or fixed income markets — they often provide market uncorrelated income and yield in times of uncertainty. This article is the first in a series from Echelon on non-traditional alternative investments for Canadian High Net Worth investors. Here, we cover investments in private equity, private debt, and real assets.
2020 will certainly go down as one for the history books. From record highs that suddenly slammed into a pandemic-induced recession triggering the fastest bear market in history, immediately followed by perhaps the quickest market recovery in history. The difference between money made (or protected) or money lost, often came down to which week during the turmoil an investor traded.
Looking back six months ago, we noted in our report that the setup for 2021 appeared ‘challenging’. Well, ‘challenging’ it was not.
With the severity of the pandemic, vaccinations in early days and valuations at exorbitant levels, one would estimate that was a fair
statement. An unbelievable run on equities so far this year has the markets defying everything from rising inflation to COVID-19
variants, with valuations in the nosebleed levels. No one can predict the future, but looking at chart 1, wouldn’t you agree that this
looks a little ‘too easy’? However, if equities were a worry six months ago, we would say the paranoia of a pullback continues to
Growth has been the dominant style for the U.S. equity market for pretty much all of the 2010s. Based on the S&P 500 style indices, growth beat value in every year from 2007-2020 with the exception of 2012 and 2016. That is dominance, and the cherry on top was a trouncing of growth over value in 2020 of +32.0% vs -1.4%. But in late 2020 the tide turned, and value started outperforming. All the stars were aligned for value including a sizeable valuation discount, the re-opening of the economy that would benefit value
due to the constituents being more economically sensitive, rising yields and rising inflation. And it looked like the great value rotation had started… until the last few weeks cast some doubt.
Nothing lasts forever – thankfully this includes pandemics. And while the path out likely remains a hilly road with ups and downs, people’s behaviour appears to be inching back towards normal. This is clearly good news. With each jab in the arm, we move a small step closer towards the new normal. This pandemic has obviously triggered a great number of advancements across medicine, logistics, manufacturing, etc. One of the advancements in the world of economics has been the rising use and availability of higher frequency data.
On June 24, 2021, Sun LTCI is closing to new sales as well as conversions from Sun Critical Illness Insurance. Those of us in the insurance understand why companies close products or reprice. Likely it is because the product is no longer profitable for the life insurance company. Why? Perhaps they are just having too many client’s going on claim. That is a very compelling reason to consider these products before they are gone. At the very least, you should complete the paperwork to undergo the underwriting process. You can make the final decision to purchase if/when you get an offer of insurance from Sun Life.
We do expect this inflation spike to fade as bottlenecks are resolved. However, how long is transitory? This elevated inflationary period could last longer than the bond market currently expects. Yields have remain flat, whistling past two high inflationary readings. What happens if we have a 3rd, 4th, 8th month of elevated inflation? We would bet yields will begin to rise in response.