Japanese Lucky Coin Cat

Super rich individuals are private equity’s growing LP base

By Jessica Mathews, May 4, 2022

It’s been happening for over a decade. Rather than settle on endowments or pension funds, the biggest private equity firms are also looking to a new cohort—the world’s richest people—as a source of capital.

In 2018, a Blackstone Group executive famously predicted that retail investors would make up some 50% of the firm’s assets under management in five to 10 years. READ MORE >>

Skygauge Robotics drone

Innovative Drone Startup Lands In Hamilton

A company that specializes in developing drones for performing industrial inspections with greater safety is coming to the former Spectator Building that is now part of the McMaster Innovation Park.

Skygauge Robotics is a Hamilton-based drone startup developing drones for industrial work applications. Skygauge was co-founded in 2016 by CEO Nikita Iliushkin, Chief Designer and inventor Linar Ismagilov, and CTO Maksym Korol. The company’s vision is to create a workforce in the sky. READ MORE >>

Brantford industrial land

Panattoni buys 423 acres of Brantford industrial land for $290M

In a purchase that single-handedly surpasses many quarters of investment activity in the Hamilton region, Panattoni Development Co. Canada has acquired a 423-acre tract of Brantford industrial development land for $290 million.

The land is bisected by Oak Park Road and bordered on the north by Powerline Road and on the south by Highway 403. The vendor was James Dick Ltd., which acquired the land out of bankruptcy several years ago and shepherded it through the zoning process. READ MORE >>

Podcast: Is industrial real estate investment risky?

Podcast: Is industrial real estate investment risky?

Podcast: The Industrial Real Estate Show with Chad Griffiths

U.S.-based investor, broker and trainer Gary Wilson joins host Chad Griffiths to take a critical look at industrial real estate investing. Among their topics will be:

– why industrial real estate is risky;

– four main attributes of an industrial building; and

– characteristics of a successful industrial park. READ MORE >>

Dream Industrial REIT logo

Dream Industrial forms $1.5B Toronto, Golden Horseshoe JV

Dream Industrial Real Estate Investment Trust (DIR-UN-T) and Dream Unlimited Corp. (DRM-T) have formed a $1.5-billion develop-to-hold joint venture with a “leading global sovereign wealth fund” to buy development properties and build industrial facilities in the Greater Golden Horseshoe Area.

The strategy is to acquire $500 million worth of development sites and then build what the Dream partners call “high-quality, best-in-class industrial assets.” They will then continue to own the properties after stabilization. READ MORE >>

Luxury home in Hamilton, Ontario

April listings: Hamilton’s most and least expensive homes on the market

This month price tags varied from the low end of $399,000 to $3,999,999

A selection of luxury watches

Grow Your Wealth While Managing The Risks With Diversification

Every investment carries some amount of risk. Since markets can be volatile and unpredictable, diversifying your portfolio helps maximize returns over the long term as well as better protect yourself against unexpected market downturns.

This article will talk about what diversification is, its importance, and how you can diversify your investment portfolio. Moreover, we will also shed some light on the benefits of illiquidity and how real estate investments can help you enhance your returns.

Let’s get started!

Diversification: Why It’s Crucial for Your Portfolio?

Diversification is the most crucial step in risk management. It is the investment technique of holding unrelated investments across asset classes that react differently to social and economic events.

Diversification is a technique that is crucial for investors to reach their long-term goals as it enables them to hedge against unsystematic risk and build wealth over a period across different asset classes. Using diversification, an intelligent investor reduces the risk by planning carefully and allocating funds across various asset classes.

For instance, in a growing economy, stocks generally outperform bonds. However, when market conditions change, bonds hold their value, whereas stock prices tumble. Thus, if a smart investor diversifies their investment portfolio and holds both stocks and bonds, they can reduce their overall exposure to such change in market conditions and mitigate the risks of their portfolio taking a big hit.

Investment Portfolio Diversification: How to Achieve it?

An investor can diversify their portfolio by using the asset allocation strategy, which involves selecting a combination of investments based on the investors’ risk profile, financial goals, and time horizon.

Each asset class available to investors have different risk-reward ratios, and thus, each performs differently in varying market conditions. For instance, while stocks are more volatile and risky in comparison to bonds, they also offer the potential for higher returns.

Some of the standard asset allocation classes include the following:

  • Equities (Stocks and ETFs)
  • Fixed Income Bonds
  • Real Estate
  • Gold
  • Cryptocurrency
  • Collectables
  • Cash and cash equivalents

Diversified Portfolio Example

Source: Cary Stamp & Co.

While diversification is essential, it’s equally important not to over diversify. The best way for an investor to do so is to keep their portfolio at a manageable level that varies for each investor based on their financial goals and risk profiles. For instance, avoiding diversification for some investors could mean only holding six assets in different industries that they are confident about. Whereas, for others, it could mean avoiding investment in certain asset classes that they don’t understand, just for the sake of diversification.

The Benefits of Illiquidity

Liquidity refers to the ease with which an asset can be converted to cash and cash equivalents without losing market value. In general, it is seen that liquid assets such as stocks are more volatile in nature. Thus, to capture the benefits of illiquidity, long-term investors may prefer allocating funds towards illiquid assets.

Typically, illiquid assets have a low correlation to the broader stock market, and thus, they are less volatile in nature, and their value remains stable over a more extended period. As a result, such investments are considered low beta investments that are less risky but offer lower returns. As a result, such investments help minimize portfolio losses when the market sees a downturn.

How to Enhance Portfolio Diversification Using Real Estate

Real Estate Investment is the process of purchasing property to either rent it out or sell it to make a profit. As an asset class, real estate is mainly used for diversification purposes and has helped investors amass generational wealth.

Diversifying your portfolio by investing in real estate offers the following benefits:

  • Long-term stability – Real estate market is seen as one of the most stable financial markets. Thus, real estate investment is considered to be a less volatile and stable long-term investment opportunity.
  • Usability – Real estate is a tangible asset that investors can use for renting out or for personal use. For example, real estate bought for diversification purposes can be rented out and used to generate additional income.
  • Mitigating Risks – Real estate is an illiquid asset and thus, is not highly correlated to the stock market. Hence, many investors use real estate to hedge their risks against more volatile assets in their portfolios.
  • Tax Benefits –  Governments in many countries offer tax benefits on real estate investment to promote the sale of properties in the country and boost the economy.

Additionally, there are many different ways through which investors can invest in real estate. They are as follows:

  • Real Estate Investment Trusts (REITs) – REITs enable investors to invest in real estate even with small amounts of money. Shares of REIT stocks can be bought and sold in the market just like any other publicly listed company.
  • Crowdfunding Real Estate Platforms – These online platforms let investors take a more hands-on approach and invest in specific real estate development projects.
  • Investing in Rental Properties – Purchasing rental properties enables investors to add an alternative source of cash flow and earn some additional monthly income.

Important Questions to Ask About Your Portfolio Diversification

To diversify your portfolio successfully, an investor first needs to understand the fundamentals of diversification and ask the right questions to evaluate how these fundamentals apply to their specific portfolio.

Here are some critical questions about your portfolio diversification to evaluate your diversification strategy and make more informed choices.

  1. What is my risk tolerance? – This changes according to investment objectives and time horizon. Each asset class has different risks. Hence, investors must choose an asset class that is suitable to their risk tolerance.
  2. What is my risk-adjusted rate of return? – This question answers how well you are being compensated for the amount of risk you’re taking.
  3. How many asset classes should I invest in? – While diversifying your portfolio, it’s important to look for a wide range of asset classes.

Closing Thoughts

As an investor, to achieve your long-term financial goals, you need to balance your risk and reward. Diversification allows you to choose a mix of assets that reduce the risk of losses in the market. Thus, it’s essential to find the right balance between risk and return and select a mix of assets that can help you achieve your financial goals while limiting your exposure to unsystematic risks.

Number of film projects slated for Hamilton point to a banner 2022

By Daniel Nolan, Thu., April 21, 2022

It looks like it will be another banner year for filming in Hamilton.

The city’s film office says 44 productions registered to film in Hamilton during the first three months of this year.

It issued 150 permits, a slight increase versus the start of 2021.

“(We have) seen more scouting activity than usual in the first quarter, combined with the high volume of permits, indications are that we are on track for another busy year,” the film office said in a statement to The Spectator. READ MORE >>

McMaster Innovation Park

McMaster Innovation Park execs pitch residential towers to city in hopes of avoiding ‘dead zone’

  April 21, 2022

Executives with McMaster Innovation Park (MIP) are making a pitch to construct three residential towers on its research campus as part of its growth plan over the next decade.

A delegation suggested to city councillors at Wednesday’s general issues committee the structures would potentially bring life to what MIP’s vice-president of development characterizes as a “dead zone” after business hours.

“There’s no one here,” Frances Grabowski said.

“We can’t bring in the amenities that require the density for the evening for dinner, more than just for lunch. That’s that’s what we’re trying to do. The innovation park is very different and that’s what we’re trying to build here.” READ MORE >>

Innovation Park Hamilton

McMaster Innovation Park plans residential towers

‘We need people living here,’ vice-president of development tells Hamilton councillors

McMaster Innovation Park hopes to build three residential towers to help foster its west Hamilton research campus overlooking Highway 403.

“We need people living here, working here, playing here,” Frances Grabowski, vice-president of development for the Longwood Road South innovation park, told city councillors Wednesday.

The residential buildings would spur restaurants, cafés and other amenities that will breathe life into the campus, which is a “dead zone” after 5 p.m., Grabowski said.

McMaster Innovation Park (MIP) — which is home to businesses, labs and offices — is planning for 524 residential units in three buildings of 14, 22, and 26 storeys on the property, a city staff report notes. READ MORE >>

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