Short-term versus long-term analysis

There have been a few themes discussed on these pages that might seem a bit repetitive, or even wrongheaded to some, so it’s nice to see when others in the investing world are saying some of the same things.

Specifically, Tom Bradley, president of Steadyhand Investment Funds, writes in the Financial Post about the need to minimize some of the hype surrounding things like U.S. President Donald Trump, and even Brexit. According to Bradley, they will have minimal impact on long-term investing, and the political shock they have brought to the world of investing should have already been discounted by now.

Avoid hyperventilating

Indeed, this is something discussed on these pages for some time now. People have hyperventilated about Trump ever since he announced his presidential run, and certainly since he won the presidency. This is not in any way an endorsement of Trump, but a reminder that the world, including the world of investing, is much bigger than he is, or any other president.

Instead, Bradley talks about two long-term factors that investors should start taking more seriously instead of watching too much cable news. The first is debt — and he’s talking about all debt; that being accumulated by households and governments. It’s growing, and getting out of hand.

Sustainable trends

The second long-term factor is the growing middle class — around the world. This is something that has been happening in China in recent decades, and is now also occurring in places such as India and other regions of Asia in particular.

What’s fascinating about Bradley’s analysis is that he says both factors — debt and the middle class — have contributed to world economic growth in recent years. However, he says the first, debt, is not sustainable, and there will be a reckoning, sooner or later. You can only keep borrowing money for so long. But, the second factor, the growing middle class, should serve as a counter-balance, since it will continue to happen for the foreseeable future.

ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.

Quick Contact