Podcast by Ron Hiebert
Making Money Minute with Ron Hiebert Tariffs Force Change There is a something sadly disturbing about human economic behaviour. It has been my observation that we never change when we see the light. We are only forced to change, when we feel the heat. Canadians have consistently ignored the consequences of running massive deficits, being to dependent on the US for trade, neglecting our defence responsibilities, having huge interprovincial trade barriers and exporting raw materials instead of finished products. There is a bright side to this tariff conflict. It is finally forcing us to deal with these issues.
Making Money Minute with Ron Hiebert Confusing Economic Indicators One of the reasons people are so confused about the current state of the markets, is that they are getting many differing signals as to what will happen next. Indicators tracking consumer and business confidence, are very negative in their outlook. Yet stock markets, typically dominated by professional investors, have been spiking to new highs. This makes it tough for investors, who are looking for clues on what to do. When opinions are so polarized, sometimes the best strategy, is to simply wait until the dust settles and you get more clarity.
Making Money Minute with Ron Hiebert The Political Right And The Environment We need to leave politics out of our environmental debates. The spin doctors would have you believe that only left leaning organizations can deliver environmental progress. The numbers prove the opposite. Texas, California, Iowa, Oklahoma, and Kansas were the top five states generating renewable energy. Four of them are Republican and one is Democrat. In Canada, Ontario is the leader in solar and wind generation and has a Conservative premier. Environmental leaders, come from both the left, and the right side of the political spectrum.
Making Money Minute with Ron Hiebert Affinity Crimes People let their guard down when dealing with others they know and trust. This is especially true if those people are associated with a charity based institution or faith. Criminals also know this, and often will infiltrate those groups for the sole purpose of networking with people they can maneuver themselves into a position to scam. These happen so regularly, that law enforcement even has a special name for them. They are called affinity crimes. So, if someone from a group you belong to, wants to do a monetary transaction with you - be especially careful.
Making Money Minute with Ron Hiebert Scammers & AI Artificial intelligence is going to revolutionize the way we work and live over the next 15 years. It is also going to give scammers, very sophisticated new tools to part you from your money. If AI is exposed to a voice recording for a minimum of 3 seconds, it can now imitate the way you talk. Soon, it will be able to animate your facial expressions as well. So, even if you recognize a voice on the phone, and the conversation centres around money, ask them a question only a real person who knows you, could answer. As scammers get more sophisticated, so must their victims.
Making Money Minute with Ron Hiebert Managed vs Free Trade Free trade allowed goods and money to flow globally with very few restrictions. The upside is that it brought a lot of prosperity and growth to countries that had big cost advantages in manufacturing. The downside, was that it also created losers with massive trade deficits. This imbalance has proved unsustainable. What will replace it, is a system of managed trade. Countries will have to negotiate what they will buy and sell to each other, to maintain more of a trade balance. Growth will likely be lower, but more sustainable.
Making Money Minute with Ron Hiebert Trump Forces Change I haven't been this positive about Canada's future in over a decade. As a nation, we are finally focussed on standing on our own two feet and becoming more than just a second tier branch plant, supplying goods and services to the US. This is no longer just a political talking point, but a deep change in our national resolve. The restructuring it will take to get there, isn't going to be quick or painless, but Canadian's have the toughness and resiliency needed to make it work.
Making Money Minute with Ron Hiebert Think Like A Sailor When markets get volatile, investors scramble after the fact to get more conservative. Unfortunately, by then, prices are down and the investor gets a financial haircut. When taking a boat on an extended sail, we don't just plan for nice weather. Before leaving port, we assess the worst weather we would encounter, and then strengthen or make appropriate changes to the vessel, so it could withstand them. The lesson here, is that investors need to make sure their portfolios are durable enough to weather tough markets, before, and not after they start experiencing them.
Making Money Minute with Ron Hiebert The Changing Defence Industry If you wanted to buy defence stocks, you would normally look for the ones that built really expensive equipment like planes, missiles, submarines or aircraft carriers. Then zero in, on those having the juiciest contracts with big spender governments. The Russian/Ukrainian War has changed the combat equation. Battles are now being fought using drones on land, sea and sky. They are directed by cameras and sophisticated electronics, from operators, often thousands of kilometres away. Drones are much cheaper to produce than traditional military hardware, and are made by different companies. Investment strategies need to adapt.
Making Money Minute with Ron Hiebert Oil Surplusses Unless we have a war or other major disruption to oil production, it looks like prices aren't headed higher anytime soon. Russia is in peace talks with Ukraine, and the US, is pursuing a nuclear weapons treaty with Iran. If one or both are successful, it will lead to sanctions being lifted, giving both of these large producing nations, access to global markets once again. OPEC alone, has 5.3 million barrels per day of spare production capacity, available to bring on stream. Currently the world is drowning in oil, and until that changes, prices will remain weak.
Making Money Minute with Ron Hiebert Where Nuclear is Growing Many investors are avoiding the nuclear sector, because they think cost overruns and construction delays make them uneconomic to build in the west. This outlook ignores what is going on in the rest of the world. China for example can build a nuclear reactor for 2.5 billion US, which is a quarter our cost. That country has 40 reactors in various stages of planning and construction, and another 72 proposed. Maybe nuclear construction is moving at a snails pace in the west, but that certainly doesn't reflect what is going on elsewhere.
Making Money Minute with Ron Hiebert Russia & Commodity Prices For the first time is over 3 years, we are beginning to see baby steps towards peace talks between Russia and the Ukraine. Investors should be paying attention. Russia's economy has been badly damaged by the war and trade embargoes that followed. As soon as peace comes and the sanctions are lifted, Russia will begin dumping stockpiles of things they haven't been able to sell for years, to gain much needed cash. Commodities like metals, grains and fossil fuels could come under pressure as a large increase in supply forces prices down.
Making Money Minute with Ron Hiebert Going Into The Trades Generation Z are the kids born between 1997 and 2012. That would make the oldest of them, 28 this year. A recent survey of this group, found that half thought a 4 year university degree was a waste of time and money. Historically, higher education was the key, to better job prospects and higher incomes. That is changing, because of artificial intelligence and offshore competition. Young people are starting to figure out that an education in the trades is where the action is. Lower education costs, less debt, and a job you are trained for when you graduate - what's not to like.
Making Money Minute with Ron Hiebert Vehicle Economics Many people are teetering on the fence deciding whether their next new vehicle purchase should be electric or internal combustion. We will set aside personal issues like access to chargers & environmental impact and focus on the economics. To determine the vehicle that will give you the most bang for your buck, requires taking into account five essential elements: the initial purchase price, annual insurance, borrowing costs, maintenance and operating expenses, and depreciation. Only by calculating these five items, do you get a clear picture of your total costs and thus your best economic option.
Making Money Minute with Ron Hiebert Fees and Performance When researching mutual funds, their turnover rate is one criteria that should be included on the list. This is the amount of buying and selling that takes place in a portfolio annually. Typically the higher the turnover the lower the returns. Over 15 years, almost a 1/3 of funds, that had a low turnover rate of 25% or less, were able to outperform the market. Among funds that turned over their portfolios twice a year, only 10% outperformed the market. The more you trade, the more it costs, and those fees have a dramatic impact on the bottom line.
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