saw repeated as an adult in 2008. Which is why I can’t be like my
grandfather. I’ve been exposed to things he never saw - and I was
never exposed to what he saw.
When it came to investing, grandpa’s strategy was simple;
he’d have a pension for life and he invested in blue chip stock.
The stuff you bought and forgot. He bought stocks like GM, Nortel
and Bell that paid dividends and went up every year. If he were
alive today, what would he think of Bell divided, GM bankrupt and
Nortel gone? This was something that was considered impossible
in the 70’s. Greater interdependence and emerging economies
make North American and European behemoths increasingly
vulnerable to market change.
The EMD industry can provide conservative investors like
my grandpa with true diversity by providing investors with
alternative and private equity investments. The simple formula
of 60% equity with 40% bonds no longer works. The problem
today is there is no such thing as a blue chip stock. I would
argue the new formula is 80/20 meaning public / private mix.
This is a strategic advantage that we have as a private markets
industry. It’s an area where stock brokers and mutual fund reps
can’t be much help diversify a portfolio. At this time, traditional
investment in stock markets can be risky given the market cycle
and volatility we’ve seen over the past year. Given the potential
of inflation, bonds may be risky as well.
With better and more exciting private market offerings, the
opening of the OM Exemption in Ontario and the potential for
liquidity through the launching of the TMX Private Markets, I am
confident about the future of the EMD space. As retail investors
learn the secrets of institutional and accredited investment
strategies, there will be a flight of cash to invest in our industry.
We have momentum and fortune on our side. As an industry,
if we can continue to perfect our due diligence and KYP, I see a
great future for our industry.
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