An absolutely riveting observation, and possibly a source of surprise to many of my blog followers, though not to me deals with how investors view real estate vs stocks and bonds.
It was revealed by financial journalist Ian McGugan,1 writing for The Globe and Mail (Report on Business, April 27, 2018) – in an article called Safer than houses that: ‘most of us make a major portfolio decision every month without fully realizing it. That decision comes when we pay our mortgages. By pouring so much money into real estate, we’re signalling that we believe an investment in brick and mortar is better than one in stocks and bonds.’
69% average price rise in 10 years
To paraphrase Mr. McGugan, during the past 10 years residential real estate prices in 11 leading Canadian cities have gained an average of 69%, according to the Teranet-National Bank National Composite House Price Index. That’s a 5.4% average annual gain in return for living in your home. Wow!. My faith in real estate as an investment has been vindicated!
The focus is mostly on ever-rising household debt, but behind the scenes, with less drama, corporate Canada has been piling up debt even faster. Non- nancial corporate debt has risen by an average annual rate of just under 9% since the beginning of the recovery—3%-pts faster than the growth seen in household debt. The corporate debt- to-GDP ratio currently stands at 70%—up from 50% in 2010.
Of course everything is fine and well— until it isn’t. So should we lose sleep over corporate debt? The fear of course is that higher interest rates will expose the vulnerability of highly indebted corporations, and will put at risk the current dividend growth trajectory—mainly in high-yield sectors such as utilities, that happen to see their debt load rising the fastest.
Believe it or not, experts in psychology, management, linguistics and more, have been turning their attention lately to the complexities of email management and the challenges of writing emails with maximum impact. It’s a huge subject.
The first thing to recognize is that email is a lean medium. It is not like face-to-face communication where we can use nonverbal cues to help convey what we mean. Ditto the phone, where tone of voice aids persuasiveness. None of this exists with email.