Wine investing in North America is hitting the mainstream.
Historically, the wine investment category has been perceived as only for the wealthy or wine experts.
Although traditional HNW [High Net Worth] investors have been investing in portfolios of fine wine for years, it is still a new asset class for some.
However, new specialist services are opening up the fine wine investment universe. Cult Wines, whose story began in London, England in 2007, recently expanded into North America with offices in Toronto and New York. Known as ‘The Americas,’ our task is to build the awareness of fine wine and accessibility to the asset class. In addition, Cult Wines recently introduced a new platform, new product structure and new technology to better serve our clients.
Our expension into The Americas is helped by fine wine’s strong track record of consistent returns and low volatility. Currently, the asset class is enjoying a sustained rally with year-to-date returns over 13.7% through the end of October, as measured by the Liv-ex 1000, an index of some of the most sought-after investment wines from around the world.
The U.S. is the world’s largest Wine market
The US, the world’s largest wine market, is a natural fit for wine investment. 49% of Americans drink wine and 431 million cases of wine were sold in 2020. The US has been making some investment grade wines for decades and to the end of October, the California 50 wine index is the third best performing wine region globally with a year-to-date return of 16.5%. Continue Reading…
While most business executives are and should be approaching Financial Independence, there is a little-known threat to their financial well-being: addiction/substance abuse.
In fact, according to the SAMHSA [Substance Abuse and Mental Health Services Administration], around 11.4% of management employees (example business executives and managers) are diagnosed with a Substance Use Disorder every year.
If the addiction is not managed in a timely fashion, abrupt dismissal could torpedo any long-term goals for financial freedom.
As an aspiring business executive or someone who is serious about their financial education, it’s good to be aware of addiction and its possible ramifications.
So in this post, we look at why business execs should take addictions seriously. We also discuss different treatment options available for business executives to overcome SUD.
Help is Available
Anyone can suffer from drug addiction, including those in white-collar, executive positions who juggle a lot of responsibilities. In fact, it could be more difficult for them as they may be tempted to avoid/delay treatment so their career or work doesn’t suffer due to the required time off.
That’s where executive addiction-related treatment centers come in. These treatment centers are equipped with high-end tools, services, and necessary amenities so that patients can maintain active personal and professional lives while also achieving sobriety.
Often the main highlight of these programs is the luxury setting and amenities given to the professionals and a distraction-free comfortable environment.
Addiction Treatments available for Business Executives
Medical Detox
Often the first phase of most recovery programs; medical detox aims at the cessation of drug usage. In the absence of medical aid, the patient may experience myriad unpleasant withdrawal symptoms.
Executive treatment facilities, such as detox centers in California, deploy safe and medical procedures to make the detox process as comfortable and less painful as possible.
Psychotherapy
Often the therapeutic phase of the program begins right after the detox is successfully over. Inpatient rehab centers in Los Angeles for example, use it in individual and group settings. Psychotherapy mainly aims to recognize the psychological reasons that are causing or triggering the drug usage.
After that, it teaches several relapse prevention mechanisms and coping techniques to deal with tough situations without resorting to drugs. Continue Reading…
The continued rise in stocks, real estate, and almost every other asset class on the planet can be attributed to three things: liquidity, liquidity, liquidity. According to legendary investor Marty Zweig:
“In the stock market, as with horse racing, money makes the mare go. Monetary conditions exert an enormous influence on stock prices. Indeed, the monetary climate – primarily the trend in interest rates and Federal Reserve policy – is the dominant factor in determining the stock market’s major direction.”
In today’s markets, you don’t have to look very hard to find strong evidence of Zweig’s theory, which explains why stock markets were making fresh highs during successive outbreaks of Covid-19 and spiking unemployment. It also explains why approximately two thirds of stock returns over the past decade are attributable to multiple expansion rather than earnings growth. It’s hard to envision things turning south when real interest rates remain highly negative, and money is so freely available.
Something is happening here but it ain’t exactly clear what
For the first time in decades, the inflation genie is threatening to escape from its bottle. The abundant global liquidity that has been the primary driver of markets is threatened by the potential need to combat inflationary pressures, which have been rearing their head after a several-decade slumber.
Despite some disconcerting inflation readings over the past several months, it is possible that this phenomenon turns out to be a Covid-induced disruption in supply chains that will prove temporary. If this scenario prevails, then rates will remain fairly low, as will the probability that stocks will crater. Conversely, it is entirely possible that the recent uptick in inflation marks the beginning of a longer-lasting trend, in which case rates could rise materially, thereby increasing the chances of a severe decline in risk assets.
There are certainly some signs that suggest that at least a portion of the recent surge in inflation may have staying power. Bridgewater, the world’s largest hedge fund, recently wrote a research report called “It’s Mostly a Demand Shock, Not a Supply Shock, and It’s Everywhere.” The authors contend global production is back to normal levels following last year’s Covid-related disruptions. On the other hand, they claim global demand has exploded. Bankim Chadha, Chief U.S. Equity & Global Strategist at Deutsche Bank Securities, summarized his recent discussions with company executives:
“Most companies noted that supply chain issues kept them from fulfilling the underlying demand, which was much stronger than they had expected. They didn’t plan their supply chains to have a sustained surge in volume for 18 months. Labor availability and cost pressures show no signs of abating any time soon, a development that is new and not welcome. Companies are however very confident in their ability to raise prices.”
Although rates have risen modestly over the past few months, they have yet to rise materially. Both central banks and market participants remain skeptical that inflation will become a serious concern, which has prevented rates from spiking and provided stocks with sufficient “cover” to remain buoyant. On a rolling 10-year basis, equities are beating bonds in the U.S. by the largest margin since 1964. As long as the money is coming the mare will keep running. Continue Reading…
Collateral and conventional mortgages may sound similar, but they’re actually two separate and distinct things. In this article we’ll look at the difference between the two.
What is a Conventional Mortgage?
A conventional mortgage is the mortgage type most Canadians are familiar with. When you make at least a 20% down payment on a property, you can take out a conventional mortgage. This differs from an insured mortgage, where you can put down as little as 5% on a home.
With a conventional mortgage, the lender will let you borrow up to 80% of the property’s value. The property value is the lesser of the purchase price or the appraised value. Usually the purchase price and appraised value are the same, but sometimes they differ.
If the home is appraised higher than the purchase price, that’s a good thing. That means that you’re getting a good deal on the home. However, if the home is appraised at less than the purchase price, you’ll need to make up the difference if you still want to put at least 20% down.
With conventional mortgages, you get to choose the length of the mortgage. The most popular lengths or amortization periods are 25 and 30 years. If you’re looking for the lowest mortgage rate, a 25 year amortization usually offers that. However, if you’re looking for lower mortgage payments, the 30 year amortization is the best option.
What is a Collateral Mortgage?
Not to be confused with a conventional mortgage, a collateral mortgage is a lot like a conventional mortgage, but with a key difference. Unlike a conventional mortgage, a collateral mortgage re-advances. This means that a mortgage lender is able to loan out more funds as the value of the property goes up, without needing to refinance your mortgage. Continue Reading…
The old joke is that opinions are like noses – everybody has one. The other thing everyone says about opinions is that we’re all entitled to them. If we’re speculating about how things that have never happened in the past might play out in the future, there’s also a bit of fun involved. Friends can rib each other about which among them is the better prognosticator. Adam Grant’s latest book, Think Again, encourages readers to rethink what is already known, which might just mean ‘what they believe.’
Grant says we should beware the “I’m-not-biased” bias: recognizing the flaws in other people’s thinking, but assuming you’re immune. He says the less biased you think you are, the less likely you are to catch yourself. To paraphrase: “If knowledge is power, then knowing what you don’t know is wisdom.” It might also be handy to keep a mirror handy and question your own beliefs more often.
The next Bear market
I’ve recently completed an exchange with a friend about one of the most common financial advisor narratives and how those might play out if there was to be a prolonged and severe bear market. To begin, although I personally think such an outcome is probable in the near term (which created a sense of urgency for the thought exercise), the important thing is to game out what we think and why we think it before the event happens. Other than reading my thoughts into the record for posterity, the timing is inconsequential. We may not have a large enough drawdown in the next 20 years, so we may not be able to test which hunches are closer to the mark during my career.
This exercise is especially interesting when we think of the lack of reliable counterfactuals. Basically, advisors say they do a good job of keeping people invested in bear markets and naturally want to take credit for doing so. The questions abound:
What would clients have done if they hadn’t worked with the advisor?
If the advice was consistent to hold and (say) 95% of clients held, is there culpability for the 5% who sold?
What if (say) 85% of the clients would have held if left to their own devices, anyway?
Combining the two hypothetical points above, the changed behaviour is felt for only 15% of clients, 10% who held when they would have otherwise sold; 5% who sold despite being advised to hold. Would that justify a narrative of ‘advisors adding value through behavioural coaching’?
If the drop is bigger and lasts longer, clients might behave differently, so what does this mean for advisor accountability? Taking or foregoing credit or blame regarding client conduct might change if one offered the same advice but got different outcomes as the situation dragged on.
Here’s a fun one: If an advisor gets credit for encouraging a client to hold through a 30% drop and then the market drops a further 30% and the advisor still encourages the client to hold, but the client sells, would it have been better for the advisor to have allowed the sell to have taken place sooner? If yes, is that advisor ‘worse’ for not allowing the client to sell sooner?
My concern in this exercise is a sort of first-derivative optimism bias. I have a view that advisors are optimistic in general. Continue Reading…
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By Atul Tiwari, CEO Cult Wines Americas
