Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

Q&A: Fundamentals favour healthcare sector

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By Paul MacDonald (Sponsor Content)

The healthcare sector has been in the spotlight as Big Pharma turns its financial and scientific resources towards a solution to the Covid-19 pandemic. Their efforts to develop a vaccine have put drug companies in a global spotlight and changed perceptions about them.

Beyond a pandemic vaccine, other positive forces are at work in the sector, during a challenging and unusual year. As lockdowns have eased, pent up demand for delayed treatments has been strong. Election year rhetoric south of the border has all but disappeared, making investors optimistic about the prospects for drug companies.

These trends have helped healthcare stocks rebound from their spring lows and the momentum should continue, says Paul MacDonald, Chief Investment Officer at Harvest Portfolios Group Inc. In a Q&A, Mr. MacDonald talked about healthcare’s long term energizers, the philosophy behind the Harvest Healthcare Leaders Income ETF (TSX:HHL) and how the ETF is benefitting from the trends.

Financial Independence Hub: Why have healthcare companies outperformed this year?

Paul MacDonald: Healthcare is what we call a superior good, which means we need it in good times and bad. That affords the sector some positive characteristics in recessions.

For example, between February 28 and April 30, 20201 broader markets were down, but healthcare was the best performing subsector in the midst of all that. The S&P 500 was down 1.12% between those dates, but healthcare was up 8.35% and has continued to advance higher since then. So it did what one would expect it to do.

What are the sector’s long-term energizers?

There are three. The first is aging populations in developed countries, which means an increasing demand for drugs and surgical procedures. This, in turn, is driving technological advances in medical devices, equipment and drugs. The third is that emerging markets are maturing, which means higher demand for basic services, including healthcare insurance.

These are ongoing and noncyclical forces.

How have attitudes changed?

We have seen Big Pharma commit a massive amount of resources towards a solution to Covid-19. That investment has the potential to change our lives for the better and has helped shift the overly negative sentiment towards them.

Coming into the year, things were different. Bernie Sanders’ proposal for a medicare for all cast a shadow over the sector. From a Canadian perspective universal healthcare makes sense, but attitudes in the U.S. are different. Their system is extraordinarily complex, with many vested interests and is resistant to radical change. Joe Biden is more of a centrist on healthcare policy so that eased concerns.

How else has the pandemic affected the sector?

Medical devices were hard hit as elective surgeries were cancelled, which has left a lot of pent up demand. If you think about it, as things recover what will you do first, buy a new TV or get your hips done? I would think hips would be top of the list. So the med techs are seeing activity pick up.

You also like managed care companies

Managed care is not something that we have in Canada. It’s effectively big U.S. insurance companies focused strictly on healthcare. These are massive companies. UnitedHealthcare Group, which is in our ETF, has a market cap of US $296 billion as at September 14, 2020. They manage insurance plans, have physicians and pharmacies they work with and offer employee health and wellness plans.

They also administer Medicare and something called Medicare Advantage, which allows you to upgrade your Medicare plan. The growth rate of their earnings per share is in the mid teens. At the same time you’ve got attractive 16 and 17 times for multiples.

So we really like the business. It has a great growth profile. Continue Reading…

3 ways to build your Finances with minimal sacrifice

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Image by Pixabay

Gary Bordeaux

Special to the Financial Independence Hub

Money is an ever important facet of living in human society. As they say, “money makes the world go ‘round,” but it often seems like your bank account is never full enough to meet all your needs, let alone desires. However, there are methods available to help the average person get ahead of the curve to improve their finances and otherwise build their dream lives. Here’s what you need to know.

Financing Luxuries

When thinking of financing, one tends to think of a house or a car. This service has been integral in providing the working class with things that are necessary but prohibitively expensive for quite some time. However, there are other scenarios in which financing expensive products can be the best way to balance smart financial decision making with living your best life. For example, you can finance swimming pools to get the summertime recreation and relief you desire without spending a fortune on it in the moment. By spreading that cost out over time, you can bring your vacation to you without breaking the bank. This principle can also apply to many high end electronics, such as iPads, and it can also apply selectively with general retail products via layaway programs. Using these methods, you can gain the advantages of living beyond your means without actually taking the risk of doing so.

Reducing Costs

One of the most important methods of saving money is by spending less. Some might argue that refusing to spend money on creature comforts and luxuries is the right choice, that is only partially true. While some luxuries can be eliminated, those that enrich your life are important to maintaining mental health. Instead of making meaningful sacrifices, costs can be cut by simply buying less expensive alternatives to costly staples. Name brand products often fill that role, but you can often get the same value at a lower price by choosing off brand products instead. Continue Reading…

6 Recession-proof Careers for 2020 graduates

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By Sia Hasan

Special to the Financial Independence Hub

It seems safe to assume that 2020 has been considerably different than what you expected when you first started your higher education. Back then, your future may have seemed assured. Though things are more uncertain now, do not give up hope. There are still opportunities available to you.

Even if there were not a pandemic, chances are good that you would not have been able to acquire your dream job immediately upon graduating anyway, due to your lack of experience. While the economic fallout of COVID-19 is troubling in many ways, this may be an opportunity for you to pursue a new career option that you might not have thought of before, one that offers you more stability or teaches skills that you can transfer to your chosen field. Here are some of the top recession-proof career options for newly minted graduates:

1.) Attorney

If your dream is to become a Phoenix criminal defense lawyer or attorney in another practice area, there is no need to give that up. Granted, your career path may have to take some detours as the bar exam has been rescheduled in some states. Nevertheless, there will always be a need for people with in-depth knowledge of the law to represent the interests of ordinary citizens.

2.) Teacher and Teacher’s Aide

Even before the pandemic, traditional classroom education was adapting to new technologies that allow for distance learning. Nevertheless, someone will always have to be there to provide instruction to students, whether in person or online. Distance and on-demand learning offer advantages such as flexible scheduling to teachers as well as students. Granted, if you wish to pursue a nontraditional career path in education, you must make sure that not only your teaching credentials but your technological literacy levels are in impeccable order.

3.) Health Care Professional

The medical field encompasses a broad range of professionals, not only doctors and nurses but physicians assistants, lab technicians, physical therapists, and many more. There are also health care professionals not involved directly in patient care, such as administrative support staff and medical records technicians. All have a vital role to play in providing adequate health care while protecting patient safety.

Health care professionals will still be in high demand even after the pandemic eventually subsides. There is always a need for patients to receive treatment for medical conditions. Even before COVID-19, health care professionals were aggressively sought after. Physicians and other professionals belonging to the baby boom generation are nearing retirement age, and more providers are needed to care for boomers as they become more vulnerable to age-related disease and disability.

4.) Actuary

You might be surprised that financial services are in greater demand during an economic downturn. However, when one’s financial situation is less stable, it becomes more important to keep careful tabs on it. Continue Reading…

Less Coffee demand in the world, while Office Workers stay home

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Kyle Glen Unsplash

By Emma Williams

Special to the Financial Independence Hub

Are you currently working from home? If so, have you noticed changes in your daily coffee consumption after your usual work schedule was placed on hold?

COVID-19 has changed many aspects of working individuals’ daily lives, including their coffee routines. Players in the coffee industry have been in survival mode as their creativity is needed more than ever to stay successful in today’s business landscape. Unfortunately, for those in the office coffee service industry, the pandemic is taking a significant toll, making it increasingly important to understand changes in consumer behavior.

The office coffee service industry is experiencing a 40 per cent revenue loss, which is the greatest setback in the industry’s history. The Freedonia Group, a market research organization, does not expect a recovery in the coffee service industry any time soon with the recent ongoing changes.

One example of a critical change is when the Centers for Disease Control and Prevention urged employers to close off shared spaces and invest in single-serve items for their workers as opposed to communal items, such as coffee pots.

Closing offices and pushing workers to instead be productive from home furthers the shift in coffee consumption in the face of COVID-19. More than 90 per cent of people who are working remotely end up drinking homemade brewed coffee. Instead of drinking coffee at the office, consumers are now ordering coffee subscriptions and purchasing online more than ever. By selecting different blends and customizing their coffee subscriptions, they are attempting to achieve the “away from home” quality of the coffee.

U.S. office workers’ coffee usage during the lockdown

These direct-to-consumer sales completed through coffee subscription, mail-order sales, and delivery is the best way for companies to tap into new areas of growth in the office coffee service industry. Regular instant coffee will no longer satisfy coffee drinkers as they work from home. Compared to the February to March period, subscription sales were up by 109 per cent during the March to April period. Also, in comparison to March 2019, packaged coffee sales in the U.S. in March 2020 were up by 70 per cent. With a focus on at-home consumption, the negative impact will not be as detrimental because of the limited elasticity of coffee demand.

Emre Gencer Unsplash

During the pandemic, subscriptions have become increasingly popular. Many companies are seeing five times more daily subscription sign-ups now versus pre-COVID-19. They are also noticing increases in subscribers who log back on to repurchase bags of coffee that they enjoyed. Subscription growth is on the rise and continues to deliver above-market growth. These increases can be explained by the convenience subscriptions bring to coffee drinkers. By investing in options that can be delivered directly to consumers’ homes, busy workers can continue their coffee drinking routine.

The quality and convenience of direct-to-consumer sales are not the only reasons subscriptions are appealing during the lockdown: safety precautions play a major role too. Going out in public spaces during a pandemic feels risky and uncomfortable for many people. When people do go out, they prefer to spend as little time out as possible. Continue Reading…

8 investment hacks to become the next self-made millionaire

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By Lachlan Malone

Special to the Financial Independence Hub

It is the desire of many people to be rich but unfortunately, not everyone would be able to achieve that except those who take conscious steps to do so.

For one to become a self-made millionaire, it will require making certain sacrifices and conscious efforts in order to realize it. Granted that one can become a millionaire through inheritance or by winning a lottery, but it’s unlikely the majority of people will have such opportunities. Here are 8 ways through which you can successfully become a millionaire.

Always invest in You

The importance of investing in oneself has become a popular cliché but it can’t be overemphasized because it’s crucial in helping one to achieve other vital needs. When you fail to invest in yourself adequately, you stand the risk of losing all other investments you made elsewhere.

There are many ways through which you can invest in yourself, as listed below:

  • Invest in your mind; people often forget to invest in their minds but that could prove costly in the long run. You can invest in your mind by reading constantly. Aside from helping you gain more knowledge, reading will equally sharpen your brain and help to guard against deterioration. Another way is through meditation, which will help you to relax and focus.
  • Invest in your body; this is as important as investing in your mind. Neglecting your body can have disastrous consequences. Ways through which you can invest in your body include exercise, regular checkup, adequate sleep, eating healthy foods, avoiding bad habits like smoking, alcoholism etc.

Make a monthly Budget Plan

Basically, making a budget plan entails creating a practical analysis on how you hope to make your expenses. This plan will enable you to proactively decipher if you have the capacity to carry out certain projects or not. Through your budget plan, you can easily prioritize areas to spend more or less as well as tasks to do at the moment or in the near future.

A budget plan will help you to manage your resources efficiently and effectively, and equally help you to make the right choices. A good budget plan can ultimately help you to accumulate wealth.

Check your achievements today

In a fast paced world like ours today, people tend to be in a perpetual race in trying to pay the bills, meet work obligations, complete a course/program, earn more money, climb the ranks etc.; all these activities can occupy their time so much that they hardly sit back to take stock.

It’s important to make periodic assessments of your aims and objectives as well as to take stock of all the things you’ve achieved so far. You need to cut yourself some slack on how far you’ve gone and the achievements you’ve made while self-motivating yourself to continue climbing the ladder of success.

Find a right Business

The type of business you do could potentially make or mar your chances of becoming rich. Fact is some businesses are more profitable than others. Similarly, some businesses are more risk prone than others, and some are more demanding than others. Continue Reading…