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.

Helping entrepreneurs thrive as pandemic-driven small business trends stay for the long haul

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Image RBC/iStock

By Don Ludlow, Vice President, Small Business, Strategy & Partnerships and Business Financial Services, RBC

(Sponsor content)

While the COVID-19 pandemic brought significant challenges and uncertainty to small businesses across Canada, it also became a catalyst for many new business practices.

In many ways, it also accelerated the need for small business owners to adapt to other trends and consumer expectations that were steadily on the rise over the last several years.

To help us better understand these trends, RBC recently conducted research to gauge the types of experiences and expectations Canadians have when interacting with small businesses in the coming year as we continue to navigate the ongoing pandemic and journey toward economic recovery.

The survey revealed three important trends that will continue to impact small businesses in the year ahead:

  1. First, we’ll see a growing demand for digital payment and engagement options, whether customers are connecting with small businesses in person or online.

While eCommerce and digital solutions were already on the rise pre-pandemic, they became pandemic necessities as businesses adapted to health and safety measures.

Now, more Canadians are expecting this to be the new way of doing business, with two-thirds (64%) of Canadians saying that partnering with digital platforms to make products and services more accessible will be important post-pandemic, especially among millennials (72%).

Meanwhile, four in five Canadians polled say that they would like to continue to shop online at small businesses, even after the economy is fully reopened, and 72% say that increased social media presence helped them become more aware of what small and local businesses had to offer.

  1. Small businesses that focus on prioritizing employee wellness and overall customer health & safety will be greatly valued by Canadians.

The majority of Canadian respondents in our poll said providing more wellness and mental health benefits and resources to employees will be important going forward (87%).

They also expect heightened hygiene standards to continue post-pandemic (99%) and would like businesses to continue offering flexible curbside pickup and delivery services (78%).

As a result, offering employee benefits, resources and safety protocols that meet these expectations will be critical differentiators for small businesses looking to attract and retain talent and customers.  

  1. We’ll continue to see a rise in socially and locally conscious consumers – especially among millennials and Gen Z.

Supporting small, local, and diversity-focused businesses is here to stay post-pandemic. According to our research, the majority of Canadians (77%) polled plan to spend more at small, local retail stores, restaurants and businesses to support their recovery than they did before the pandemic.

Many respondents also said they are actively seeking out and supporting 2SLGBTQ+* (52%) and BIPOC **(61%)-owned businesses, products and services. These numbers are greater among Millennials and Gen Z, indicating the next generation of consumers will increasingly purchase through a diversity-focused lens.

Being aware of these trends, and adapting business strategies and operational practices to address evolving consumer expectations will be important to the success of small business owners in the next year.

In light of these insights, we have three tips for entrepreneurs to consider as part of their 2022 playbook for success. Continue Reading…

Making investing better for every type of trader

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New QuestMobile app from Questrade

By Scarlett Swain, Director, Investment Products at Questrade

Special to the Financial Independence Hub

It’s no secret that over the past few years more and more people have started trading and investing. Maybe it’s more time on their hands, maybe they’re becoming more focused on their future and want their money to work harder for them. Regardless of the reason, at Questrade we’ve seen a real increase in the influx of new customers and have heard loud and clear from them that they need trading to be less complex. This is their money, their future, and they don’t want to make mistakes while they learn or want a busy platform full of things they don’t use.

On the other hand, we’ve also heard very experienced and active traders tell us, they want more. More order types, more tools, greater speed, and they want it all in the mobile app. So, we dove deep into customer feedback and conducted a ton of research, through all this emerged themes which created the crystal clear path we’re on today: we need a platform and mobile experience for customers that only want to do basic investing AND we need an even more sophisticated mobile experience for our advanced and option trading customers. One tool could not do it all, so we got to work on building three.

Two new platforms launched

Two of our three new platforms launched on September 27: the new Questrade Trading, a web-based platform specifically designed for those who just opened their first self-directed account and also for people who want to stick to the basics of investing, and its mobile companion, QuestMobile. Screen by screen, we worked to implement the features that gave investors the information they needed to make good decisions. Continue Reading…

5 Harvest ETFs have yields over 5%

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(Sponsor Content)

As interest rates have fallen, investors who have traditionally relied on bonds and bond-like investments for income have faced tough decisions. Finding safe and predictable income streams has been a challenge.

For many, this has meant turning to equities, particularly global brand leaders with strong businesses. While the share price of these companies rises and fall with the broader economy, they have strengths that allow them to continue to remain profitable in downturns while continuing to pay dividends.

A diversified portfolio of these large-capitalization multinationals helps to protect against economic risk and offers shelter and opportunity. The companies have strong cash flow and balance sheets, well-established businesses and a commitment to dividend growh. In downturns, their share prices tend to fall the least and recover first.

This strategy is at the heart of the Harvest ETFs philosophy. Harvest offers simple, transparent, competitively priced Exchange Traded Funds (ETFs) that own the most successful global businesses. Over time these companies generate steady growth and income. The Harvest way can be summarized as: Global leaders = high income + long term growth.

This thinking led Harvest to create a suite of ETFs that combine capital growth opportunity and monthly distributions with tax efficient current yields of between 5 and 8%.[i]

Harvest achieves this yield in two ways. It chooses global leaders, or the biggest and most dominant companies in their industry. The companies must have a history of profitability and weathering all economic cycles, plus a record of paying dividends that tend to rise over time.

Second, Harvest enriches the returns with a covered call strategy. Harvest is third largest option writing firm in Canada with seven of its 13 ETF’s having option writing strategies.

The covered call strategy adds to the basic dividend income safely by selling a portion of the potential rise in stock price in exchange for a fee. The fee limits the gain a bit, but it also acts as a cushion if share prices fall, because the fee is kept no matter what. Continue Reading…

Are you suffering from investing bias?

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Overview

Situation: Nobody is immune from the adverse ramifications of investing bias.
Symptom: Left unchecked, your bias can inflict long-lasting portfolio damage.
Solution:  Recognize your biased patterns and muster up willpower to change.
Summary:  Stop emotional attachments and adopt rational decision making.

“The art of being wise is the art of knowing what to overlook.”
— William James (1842 – 1910) American psychologist and philosopher.

Our investment behaviours are dramatically influenced by the bias we keep. Left unchecked, bias can inflict long-lasting portfolio damage, such as lower returns. The goal is to become aware of how bias affects the outcomes of investing behaviours. My challenge is extended to all investors.
Bias has many definitions, such as, “a preference or an inclination, especially one that inhibits impartial judgment.” Too many portfolios are devastated by various signs of biased investing. Resolve to unravel the consequences of biased investing to regain a portfolio with purpose.

Recognize and make adjustments to bias that is holding back your money management. Step out of your comfort zone and revisit your biased behaviours. All investors can resolve to make simple and sensible bias alterations. This process helps us become better investors.

Nobody is immune from the adverse implications of investing bias. Researchers point out that our brains are wired with many preset investment bias, professionals included. Thankfully, the wiring is easily changed. In addition, portfolio managers devote plenty of effort in minimizing the affects of bias found in client portfolios.

Delving into a few amusing behaviours of investing is a fascinating subject. My favourite is the impatience bias that grandmas and grandpas don’t have.

Change this wiring soon

I highlight a few important biases for you to recognize and change:

• Over-confidence bias: The most common investor bias by far is over-confidence. That is, believing that we are more savvy and wise about particular investment strategies than we actually are. Over-confidence often leads to quick decisions that we later regret. For example, investing too much money into one or two “surefire” stock selections.

• Confirmation bias: Investors have built-in desires to find facts, figures, data, trends, information, people and institutions that agree with their existing views. Then they ignore all the other people and data that contradict existing beliefs and positions. Does it sound close to home?

• Recency bias: Your next investment decision can be unduly influenced by the outcome of your last trade. You are more receptive to investing if you just realized a gain, versus if you realized a loss. Regardless of whether or not the investment climate is right for you.

• Impatience bias: Have you noticed that grandmas and grandpas seldom get mad or annoyed for very long with their grandchildren? In contrast, the children’s moms and dads may reach the hot point with the same children much sooner. This observation also applies to their investment portfolios. Those grandmas and grandpas have more patience with portfolio outcomes, versus their sons and daughters. Consequently, the moms and dads reach more emotional resolutions and/or fewer logical decisions than grandmas and grandpas. This is an easy one to correct. Continue Reading…

Gold still shines but watch China

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Financial advisors should ensure that gold comprises 20% of their clients’ portfolios to improve their return and lower volatility, Nick Barisheff, CEO of BMG Group Inc. in Markham told Wealth Professional.

“From an advisor’s point of view, that’s the easiest thing to do: just add some gold to your client’s portfolio – without getting into all the complexity of a currency or anything else,” he said. “It’s that simple. That’s as far as they need to go. Everything else gets very complicated.”

Barisheff was reacting to recent commentary that gold’s place in the investment world was being eclipsed by Bitcoin. He noted that for something to be an effective currency, it needs to store wealth as well as be a medium of exchange – and Bitcoin doesn’t accomplish that.

“You can’t conceive of doing a long-term bond with Bitcoin because the volatility in the fluctuation is so huge,” he said, “and then there’s really nothing backing it.”

While Bitcoin’s value is increasing, Barisheff attributed that to the hype surrounding it rather than any solid justification for it.

The Bank of International Settlements, which he noted sets the rules for all central and commercial banks, has authorized gold as a zero-risk monetary asset equal to U.S Treasuries.

“They didn’t say that about Bitcoin,” he added.

China and Russia increasing their holdings of Gold

The other thing that Barisheff said to watch for in the world of gold is the fact that the world’s central banks hold about 30,000 tonnes of gold – and the central banks of China and Russia, as well as other countries, are increasing their holdings. China has said it has 1,600 tonnes of gold, but he said some estimate that its sovereign wealth fund, which doesn’t have to report its gold holdings, may have 5,000 to 6,000 tonnes of gold.

“They will move it to the central bank when they feel they’ve bought enough gold,” he said. “Their officials have publicly stated that their objective is to have more gold than the U.S. and the U.S. has 8,000 tones, so China’s goal is to have 10,000 tonnes. So, they’re not going to announce that until they’ve finished buying the gold because, when they do, the price will go ballistic, and it’s in China’s best interest for the price to stay down for the time-being.”

Once that happens, he noted that there will be questions about where they got that gold. Continue Reading…