Are you looking into investing during COVID-19 in Canada? Below are my notes from the 2020 Toronto Global Forum. You can learn about what experts from a hedge fund have to say. When is the right time to invest?
Will there be a stock market crash? How to start investing during COVID-19? Don’t make a mistake, there are massive opportunities out there. This is your opportunity.
A lot of people made money coming out of the 2008 financial crash. The 2021 economy crash is going to be even bigger.
Investment management is in a period of rapid change. The unprecedented global economic crisis generated by the coronavirus has deeply affected the international markets.
It has pushed investors beyond their traditional boundaries. How is the operating landscape changing for investors? How are they dealing with the consequences of the pandemic?
What are some of the main challenges the investment management industry is facing today? How is investors’ portfolios changing, and what positions are proving to be riskier than anticipated?
How can investors prepare for the challenges ahead and turn them into a competitive advantage?
2020 Toronto Global Forum Speakers
Below were the speakers for this talk on investing during COVID-19 in Canada. You can also see our pitch deck learn about what we are doing in the digital innovation space in China: ClearWay Law China
You can fill out the form on the side of this page to get more information. We have a more detailed pitch deck to send you.
Ian McKay, Chief Executive Officer, Invest in Canada
Luke Ellis, Chief Executive Officer, Man Group
Mohammed Alardhi, Executive Chairman, Investcorp
Neil Cunningham, President, and Chief Executive Officer, PSP Investments
Coronavirus Pandemic Stock Market Crash
Invest in Canada is an organization that promotes large scale investment projects across Canada. They have to look into changes in the investment market, such as the Coronavirus.
The way that we invest will likely never be the same. Global investment strategies are undergoing a dramatic change in 2020. Early statistics have shown that investment in Canada is down around 40% this year.
It’s also been predicted that investment will also be down 10% in 2021. It’s tough times for Canadian companies that need capital to survive or grow. Our company, ClearWay Law, is lucky that we have low expenses.
COVID-19 has exposed some weaknesses in the global supply chain and certain companies. Many retail companies have gone under. Just this week, Le Chateau, a Quebec company, went under.
In March 2020, Canada found out that it only produced 0.5% of the amount of personal protective equipment needed to protect Canada from a virus or other air-born air diseases.
Since then, many factories have been set up in Canada to create masks, soap, and hand sanitizers. It’s clear that globalization has taken a hard hit. Countries now want to be able to support themselves.
Which Industries Are Good Investments In Canada During COVID-19?
There is now an increase in investment in certain industries in Canada and indeed the world.
- Digital economy (online marketplaces, AI, and big data.) This is what industry our company, ClearWay Law. But more on that in the pitch deck at the beginning of the article.
- Life sciences (vaccines and eldercare.)
- Technology (the government wants to create cleantech solutions.)
Investing During Covid 19 Canada | Right Time To Invest?
Canada is set to take a leadership role on the global stage. With our political and economic stability and workplace talent, the future is bright for those that invest in Canadians.
Now investors need to do due dillance on companies over Skype. Clients and investors are going to have to rethink their investments.
Sometimes Canada feels like we are quite large. But most of the time Canada waits for opportunities that get passed down from other countries. We can’t do this anymore, we won’t get many good opportunities. Canadians need to be more open to risk and reward.
Some companies, like online marketplaces, are only successful at scale. You can’t just operate based on profits. You don’t become profitable until you own the market.
But then look at companies like Amazon or Alibaba, it can explode in profitability. There are very few large Canadian companies. That is why we are setting up our company in Shanghai, China.
Having a financial plan in Canada is important
Working from home is not a change in technology. We have had that technology for a long time. However, employers now know that they don’t need to have all their employees in the office to get things done.
Most of an employee’s work can be done from home. Employers must be more flexible. That should not change both SARS-2.
However, not everyone has a good work at home environment. During the summer of 202o, people could get outside and go for runs and go to the park.
However, now that the winter is approaching, there will likely be mental health problems in Canada. We are not travelling, we are not meeting new people, or going to conferences.
There is a timestamp for how long this work from the home plan can be productive for many people.
Companies must look after their people, their mental health, and develop a strong remote-based management style.
Some people don’t believe that people are less productive when they work from home. Anyone who is younger than 35 years old is comfortable being creative and operating online.
The new COVID-19 business models are being developed and have been said to be 10% more productive than office life. 10% might not seem high, but it’s massive.
Think about how many tasks employees are tasked with each week. If they receive 20 tasks, it means they are getting an extra two tasks done per week. That adds up!
Investing During Covid 19 Canada Info From A Hedge Fund Manager
Politicians have also become comfortable spending however much money as they feel like it. There has been no thinking about how it’s going to be paid back post-SARS-2.
There will be an end result to COVID-19, and it’s likely not going to be pretty. If an airline is not as productive as another, it should be let go. We can use the pandemic to find the most productive companies.
There is no magic money tree. All country and company debt must be paid off.
How are we going to close this cycle? How are we going to get away from spending crazy amounts of money? When and how are people going to improve their mental health? Are people going to go back to the office?
What percentage of people are not going to return to the office? You need to think about politics and which countries are going to do the best. ClearWay Law has voted on Canada and China for where we use our resources.
If one or both of the markets does well coming out of COVID-19, we will do very well financially.
There Are Lots Of Bankruptcies In Canada
In Canada, there have been a lot of people that have lost their jobs. There have also been a lot of bankruptcies. You don’t hear about all of them in the media, only the big ones. But if you call into the court hearings right now (on the phone hearings), the court is full of bankruptcy hearings.
COVID-19 has caused the reduction of globalization and increased the number of people working from home, and the pace of innovation.
Fixed income investments are no longer fulfilling its role in the investment world. With fixed income generating no returns, it’s not being used to balance against equity investment.
Investment groups are reducing their investments in bonds and increasing their investment in global market debts and innovative projects.
Luke Ellis said that he agrees that people need to look at government bonds as a trading opportunity. However, you don’t want to sit long and hope things work out.
Investing During Covid 19 Canada
Neil Cunningham, President, and Chief Executive Officer, PSP Investments has started moving his investments to places like Australia and China. 80% of PSP Investments are outside of Canada.
It manages the pension money for those in the Canadian military and the RCMP.
Over the next ten years, many investment returns will be based on investment in China. Will the Chinese government allow foreign investors to play in the second-largest economy? Or will China be the best rate of return for investors willing to take on risks?
Any Chinese company you invest in needs to understand Chinese politics. China wants you and companies to pick a side between the United States and China.
Both governments are saying that “either you are on our team, or you are our enemy.” The Chinese hoped that Trump would be a deal maker and cut a deal with them.
However, it turned out that Trump felt that China needed to be beaten, not a country to be negotiated with.
China is focused on self-sufficiently. Any company that helps with this will be welcomed. They want to be able to survive any trade sanctions or military actions against China.
They want to be able to survive anything that the USA or the west throws at them. Our company, ClearWay Law, is helping China innovate its legal market.
Author: Alistair Vigier