Back in November of 2020, we published a Matco Insights piece titled “The Inflation Debate and What it Means for Your Portfolio”. Within that publication, we primarily focused on the relationship between inflation and the labor market, as well as inflation and government spending. The conclusion was ultimately that inflation is more likely to be a persistent concern when the following two conditions are met: government debt is at lower levels and unemployment rates are much lower.
In the early stages of digesting Canada’s first Federal Budget in more than two years, we wanted to provide a flash update with the primary highlights. Canada’s 2021 Federal Budget outlines CAD$101 billion in new government spending over a three-year period to fuel the economic recovery while continuing to bridge the growth gap due to the COVID-19 pandemic.
The preferred share segment of the market has often attracted individual investors seeking yield. In recent years, this demand has been further reinforced by a low-interest rate environment, which has created challenges for investors looking to generate income within their portfolio.
When it comes to making an investment, there are several factors that will influence whether the outcome is successful. One of those factors, which is built directly into our investment process at Matco, is value.
The current U.S. election was one for the ages, with record voter turnout and an extended vote count period due to the increased number of mail-in ballots. Although it appears that Joe Biden will become the 46th President of the United States come January of 2021, some uncertainty remains.
There has always been a lot of debate as to whether ballooning government deficits will lead to significant levels of inflation. This debate also leaves investors wondering if they should be protecting their portfolio from the possibility of inflation.
In this edition of Matco Insights, we take a closer look at the upcoming Saudi Aramco IPO while exploring some worthwhile market implications and considerations. More specifically, how could this potentially historic milestone within the energy sector impact the markets and your portfolio.