Why you Need to Consider Investing in more Private Nature Stocks
So far we seem to be able to sum up the year to date with the 3 t’s…Trump, trade-wars and tariffs. This is bringing uncertainty into the market and that is BRINGING BACK volatility. After smooth sailing in 2017 investors are being hit and re-introduced to volatility. Since most ‘retail’ investors focus on the short term results many have forgotten what ‘normal’
is…AND THIS IS NORMAL…not pleasant but closer to normal than the markets of 2016-2017.
This is one of the reason’s I have been suggesting/imploring/begging for investors/clients to look outside the normal asset classes (cash, bonds, equities) and participate in investments of a more private nature such as TREZ (short term commercial mortgages) and NATIONWIDE STORAGE (a real estate and business investment). Both offer reasonable returns with much less volatility and low correlation to bonds and equity BUT LESS LIQUID.
ALMOST EVERYONE CAN HAVE SOME EXPOSURE TO ONE OR BOTH OF THESE
The chart below gives the year to date returns for the major benchmarks
As you can see both equity markets and bond markets (due to rising interest rates) are down on a year to date basis and some equity markets are negative on a 12 month basis as well.
Some of our CORE ‘managed’ money positions have fared better year to date as the following chart shows.
Many income oriented equities (bond alternatives for some) have been hit hard over the last few months on the belief that interest rates are moving higher, which they probably will. However they may not move as much as suggested by the severe drop in price for many of these stocks. Demographics (the aging population) will probably put a damper on rising rates as it has done in other aging population countries such as Japan.
This creates an attractive entry or accumulation level for many stocks, some of which I have shown below.
Because of the drop in price these stocks are appropriate for growth portfolios as well as income oriented portfolios.
The benefits of owning companies such as the ones shown above are:
Dividends tend to increase
No tax on distribution (if income under $46,000)
Potential capital gain as well as income
AND NOW FOR SOMETHING COMPLETELY DIFFERENT
Many people/clients asked me over the last several months about buying companies in the cannabis industry. My answer was usually the same. ‘I have no idea what the next move will be for the stocks and it is just as likely to be lower…if you cannot buy more if the price moves significantly lower than don’t buy any now’ WELL IT IS LOWER!
For those not invested at all this may be a good entry point to start a position and for those invested at higher prices now may be the time to build on that position.
Remember…MODERATION IN OWNERSHIP AS WELL AS CONSUMPTION :)
Please contact Gayle or Erin to arrange a time to review your account and financial plan.
The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision
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‘historical analysis does not reflect future returns’