We asked five members of our investment team what they had on their ‘nice’ list this holiday season. Here’s what they had to say.
Greg Taylor, CFA, Chief Investment Officer of Purpose Investments
If you could give the gift of investment advice this holiday season, what would you tell investors?
Invest for the long term and try not to time the market.
As 2020 has shown everyone, staying invested through the dark days is the key to preserving wealth. You can move asset classes around along the edges but sometimes ignoring the headlines and keeping a long-term focus is for the best.
What do investors need to know heading into 2021?
There is a phrase, ‘don’t fight the Fed,’ which simply means if central banks want markets higher, it usually happens.
One of the lasting impacts of the pandemic is that central banks globally were very proactive in cutting rates to zero immediately to support markets.
That, combined with massive amounts of fiscal stimulus, should push markets higher through 2021. There can always be volatility and dips, but with so much cash looking to earn a return, it’s very difficult to be bearish on the market.
How can investors take advantage of your gift-giving advice?
Following the flow of positive vaccine news, one area of the market that sold off the most was gold. This could prove to be a great long-term buying opportunity. With fiscal stimulus at record levels, we could see gold outperform other assets. The sell-off to end November may prove to have revealed the best Black Friday buys of the year.
Sandy Liang, CFA, MBA Lead Portfolio Manager of Purpose Credit Opportunities Fund
If you could give the gift of investment advice this holiday season, what would you tell investors?
Get over recency bias. Interest rates don’t go down forever. Stocks don’t go up forever. Risk management and insight is critical because what worked last year is never guaranteed to work this year.
What do investors need to know heading into 2021?
Life will return to normal. Vaccines are on the way. You’ll return to going on vacation, eating in restaurants and seeing friends and family.
How can investors take advantage of your gift-giving advice?
We think this is the best time in the business cycle for credit investing. There is clearly an economic recovery on the way and credit assets tend to outperform during this point in the business cycle.
Nawan Butt, CFA Portfolio Manager of Purpose Marijuana Opportunities Fund (MJJ)
If you could give the gift of investment advice this holiday season, what would you tell investors?
Christmas came early for cannabis this year, but lucky us, it's the gift that keeps on giving. Don't let the Canadian experience ruin your look at a fledgling industry south of the border. The second-mover advantage is real and the total addressable market is possibly 10x in the US. There is ample room for further upside, even if there is some short-term noise. The majority of Americans now favour the full legalization of cannabis.
What do investors need to know heading into 2021?
Democrats are intent on proliferating cannabis in the US and will try every turn to do so. Individual states continue to push their legalization mandates. And, new large investors continue to finance this trade. The tailwinds are mighty.
How can investors take advantage of your gift-giving advice?
Remove the correlation to the NASDAQ from your growth portfolios by introducing a sector of secular growth. US cannabis is here to grow. We're privileged as Canadians to comfortably partake in this.
Nicholas Mersch, CFA Investment Analyst for Purpose Global Innovators Fund (PINV)
If you could give the gift of investment advice this holiday season, what would you tell investors?
The new economy is a digital one. If a business does not consider itself a technology company - it has to buy a product from one, become one or suffer the consequences of getting left behind. Technology exposure belongs in every portfolio.
What do investors need to know heading into 2021?
A lower-for-longer interest rate environment is the developing consensus amongst nearly every economist. This is highly conducive for growth assets and there are no growthier assets than technology companies. Ten years of progress on the technological adoption curve have been truncated over the last ten months. We expect many of these changes to not only endure, but to accelerate into 2021 and beyond.
How can investors take advantage of your gift-giving advice?
Purpose Global Innovators (PINV) is the perfect stocking stuffer this holiday season. The Fund focuses on the concept of digital transformation. Our core holding is software, which is surrounded by the satellites of consumer, medtech, robotics, payments and cloud computing. These companies use AI, automation, platforms and network effects to create innovative solutions in a new-age economy - and we pick the winners. You don’t want to miss this!
Michael McNabb Analyst and Trader for Purpose Real Estate Income Fund (PHR)
If you could give the gift of investment advice this holiday season, what would you tell investors?
Real Estate Investment Trusts are an excellent way to diversify portfolios. Over the past 10 years, the S&P/TSX Capped REIT Index has outperformed the S&P/TSX Composite Total Return Index by over 40% (as of November 30, 2020). REITs make the perfect gift, as they provide an excellent source of growing income, capital appreciation and can act as a hedge against inflation.
What do investors need to know heading into 2021?
2020 was a wild ride and REITs were broadly ignored by the general investor as the short-term focus was on monthly rent collection and not long-term asset appreciation.
As we come out of the pandemic, we expect to see a rebound in the sector as borrowing costs continue to be at all-time lows and private equity and pension plans look to generate yield from other asset classes.
How can investors take advantage of your gift-giving advice?
Purpose Real Estate Income Fund (PHR) is an excellent way to get actively-managed exposure to the North American Real Estate sector. Active sub-sector allocation has been very beneficial through all cycles and PHR has outperformed.
All data sourced to Bloomberg unless otherwise noted.The content of this document is for informational purposes only, and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained on this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement or public offering of securities. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence. Information contained in this document is believed to be accurate and reliable, however, we cannot guarantee that it is complete or current at all times. The information provided is subject to change without notice and neither Purpose Investments Inc. nor is affiliates will be held liable for inaccuracies in the information presented.Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. The indicated rate of return is the historical annual compounded total return including changes in share/unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
