Is it too late to participate in the running of the bulls? In any type of economy, you can always be a bull. You just need to know where you should park your money, whether it is in the resource sector or in the always-exciting technology industry. While everyone is looking out for the next Facebook, you may be quietly accumulating double-digit gains by being conservative and noticing investment trends others do not.
Half the year might be over, but that is an eternity in Canadian and global financial markets. Here are seven Canadian investment trends to watch in 2019:
1. It’s All About the Cannabis
Cannabis remains one of the most popular investment trends in Canada. Why not? It is legal now in Canada, it is a hip and young sector, and there is plenty of money to be made. The difficulty, however, is trying to find the right stock to buy. Even after nearly a year of going legal, many companies have either flourished or gone down the drain.
That said, if you are able to find a great cannabis stock that provides tremendous and reliable value, then you should take advantage right away.
2. A Resurgence in Penny Stocks?
Recently, Zoom Video Communications (ZM), an enterprise videoconference software company, went public. But something happened on the way: Investors had mistakenly bought Zoom Technologies (ZOOM), a telecommunications company and over-the-counter penny stock. Traders mixed up ZOOM and ZM. While Zoom Video has done well, Zoom Technologies witnessed a 56,000% spike in only a month. If you invested just a $100, then you would have made a killing.
While financial experts say to avoid penny stocks because you’re throwing money down the drain, there is an investment trend opportunity if you study the market. Indeed, putting $100 on a penny stock is better than placing $100 on red or purchasing Lotto 6/49 tickets.
3. Gold Glitters
Gold has been soaring in recent weeks, topping $1,400 and enjoying multi-year highs. There are plenty of reasons why gold has been doing well, including central banks easing monetary policy, the U.S.-China trade war, geopolitical tensions, weak economic data, and a volatile stock market.
Gold bugs say that the yellow metal is still relatively cheap and now is a good time to buy before it lifts off into the stratosphere. But there are other ways to invest in gold without buying a one-ounce gold coin.
- Purchasing mining stocks.
- Investing in gold ETFs.
- Buying precious metal mutual funds.
- Acquiring currencies that maintain hefty gold reserves.
- Getting gold in different denominations – half-ounce, quarter-ounce, a nugget, etc.
Metals should not be 95 percent of your investment portfolio, but these investment trends indicate that it should be a great safe-haven asset to offset declines elsewhere.
4. Making GICs Great Again
Although interest rates are still at historic lows, they are steadily getting higher. The Bank of Canada (BOC)’s overnight rate is parked at 1.75 percent and a 25-basis-point hike may not happen for quite sometime but yields on savings are getting better than what they were just five years ago.
One great investment instrument is a guaranteed investment certificate, or GIC. A GIC is a Canadian investment that offers a guaranteed return over a fixed period of time – 30 days, three months, or three years. This used to be the go-to investment for millions of households years ago, but then when rates crashed, it wasn’t even worth it. GICs are now going through a renaissance.
With rates likely only going higher, it is a great alternative to savings accounts with low returns and a stock market that is fluctuating all day every day.
5. Fuming Over Natural Gas
Natural gas is the energy king right now. Thanks to hydraulic fracturing and the shale-oil revolution occurring in the United States, natural gas is taking over the planet as an affordable, reliable, and cleaner energy source. Countries around the world are investing billions into developing natural gas and buying the energy supply.
What does this mean for your portfolio? Well, many energy giants are putting a lot of money into natural gas development, aiming to capture a greater share of that market. Therefore, natural gas could become an integral part of energy markets moving forward, making it one of the most promising investment trends.
Consider this, Jerry Jones, the billionaire owner of the Dallas Cowboys, put $500 million in a deal that would see his company, Comstock Resources, have a heightened presence in natural gas.
6. Betting on Copper
The copper industry is expected to see a deficit in the coming years. Because not enough new mines are opening up, the current application for new mines are pending, and supplies of current mines are dwindling, the market will be short of copper inventories. Copper demand does remain relatively strong.
Overall, copper could become the top industrial metal for the next few years. It is up nearly two percent on the year and federal governments and central banks are stimulating economies to spur growth, including the construction sector, which does need a lot of copper.
Soon after President Donald Trump took office, copper prices surged to their best levels since the 1980s because he promised a multi-trillion-dollar infrastructure spending initiative. It has yet to come to fruition, but it is evidence that even the promise of infrastructure outlays can boost prices.
7. Bullish Over IPO Market
A recent study found that most of the companies that filed an initial public offering (IPO) were unprofitable in the months leading up to their debut. Yet, investors are still clamoring for the next big IPO, but they have been disappointed by some of the major stocks as of late: Uber, Lyft, Dropbox, Snapchat, and the list goes on.
But for every 10 disappointments, there is a diamond in the rough. In this case, that diamond is Beyond Meat, which has skyrocketed 15% since its debut on the New York Stock Exchange. Until the next recession strikes, the IPO market will still be the target for profit-hungry traders.
Are you hungry for a quick buck? Do you salivate for dividends? Have you spent sleepless nights thinking about value stocks? Whatever the case may be, you can achieve one or all three of these aims. It takes studying the market to achieve this and examining the investment trends of 2019 and beyond.